9.9% Yield, 13% Off. This 100-Year-Old Fund Is Too Cheap
by Michael Foster, Investment Strategist
Let’s break down this cloud of pessimism hanging over the economy. As far as I can tell, it’s mainly coming from two sources:The bond market.The labor market.Concerns around both are overblown, and that’s been a plus for us at my CEF Insider service. It’s pushed out the discounts to net asset value (NAV) on these funds, setting up some nice buying opportunities over the last few months.
It’s increased the dividend yields on some of these funds, too. In some cases near double digits.
General American Investors (GAM), one of the more popular equity CEFs, tells the tale here. As I write this the fund’s market price trades at a 13.1% discount to its portfolio value (or its NAV, in other words). That’s cheaper than this 9.9%-yielder was just one year ago.
That doesn’t make any sense, both in terms of the composition of its portfolio (which we’ll talk more about in a moment) and the state of the US economy as a whole.
Which brings us back to our two “anchors” on investor sentiment. Let’s start with bonds.
Even though yields have spiked, defaults are low. According to recent numbers from Fitch, they’re at about 2.8% on a trailing-12-month basis, within the rating agency’s forecast of 2.5% to 3%. But the media, negative-biased as it is, focuses on weaker corporate borrowers, which naturally raises investor fears.
In short: While bond yields are up, credit stress isn’t. And corporate America’s results? They’re more than fine.
As we can see in the above chart from FactSet, S&P 500 revenue growth has surged over the last year. Moreover, jobless claims are falling, suggesting layoffs are not spiking. And so far at least, AI is not weighing on jobs.
This chart comes from a recent academic study by economists at UCLA, and it shows that unemployment among recent college graduates is really just moving in its usual up-and-down range, despite the advent of AI back in 2022. Another study, from Berkeley and LSE economists, shows that the use of AI in software engineering has not hit jobs in that sector. Moreover, it’s boosted programmers’ productivity.
In reality, all of this suggests that AI is more like spreadsheets, word processors, the smartphone and, going way back, the printing press: yet another technology that’s making people more productive.
An “Old” 9.9%-Paying Fund for a “New” World
This new world of both strong economic gains and economic pessimism is one where an investor can position themselves for quiet, solid gains. One channel for doing so is GAM, a nearly 100-year-old fund that has weathered some of history’s biggest crises.
The fund survived the pandemic, the 2008/2009 financial crisis, the dot-com bubble, and even older disasters, like the Great Depression.
GAM’s IPO was in 1927, so it’ll hit the century mark next year. And my use of the word “survived” sells it short: GAM has thrived, with a 16.2% annualized total return, based on its market price, over the last 10 years.
And yet, we have a 13.1% discount on the table here, which doesn’t make sense given the diversification of GAM’s portfolio, including high-value, high-performing companies like GE Vernova (GEV), Berkshire Hathaway (BRK.A), TJX Companies (TJX) and Republic Services (RSG).
GAM also holds a lot of major tech firms, such as Apple (AAPL), Alphabet (GOOG), semiconductor maker ASML Holding NV (ASML) and Amazon.com (AMZN).
That discount makes even less sense when we note that GAM yields 9.9%, based on its December payout. The fund also has a policy of paying out substantially all of its yearly net investment income and realized capital gains as dividends, mainly as a year-end distribution. That payout is made in the form of shares, though you can request cash.
GAM’s payout will vary depending on its NAV returns, but at 15.3% annualized over the last 10 years, a payout in the 9.9% range has been well supported.
The bottom line? GAM is a strong fund to consider for the market’s current moment, especially with the fund’s wide discount and strong history.
EV chargers, (more) industrial steam, electric motors, data-centre cooling tech, heat batteries — even modular buildings.A few are infrastructure. Others look suspiciously like venture capital investments that look odd in an infrastructure income trust. Together, my reconstruction values them at £80m. But how much becomes realisable cash?1. What’s left in the cupboard?There is approximately £80m of equity value outside SEIT’s five largest investments. Kyotherm’s April 2026 acquisition removed eleven other investments, including Capshare, Future Energy Solutions and Sparkfund, at a price 9% below their September 2025 carrying value.Encouraging — but not a price guarantee for what’s left.The issue isn’t whether these companies are interesting. It’s whether they can be sold, when, and to whom.
2. Zood — the electric elephant in the roomZood is the largest residual exposure. It owns UK charging infrastructure; The EV Network (EVN) is a separate development business in which SEIT has a minority interest. At the end of 2024 Zood had 29 sites and 127 ultra-fast chargers.SEIT’s March 2025 valuation was £43m, including £10.6m owed to Holdco. My reconstructed March 2026 equity value is approximately £31m — an estimate, not a separately disclosed asset valuation. With £18m of structural debt, that suggests £49m enterprise value, subject to reconciling the shareholder-loan treatment.That is 10.2× my FY27 EBITDA forecast of £4.8m, or 8.6× FY29’s £5.7m. Neither forecast is management guidance. A buyer will want actual utilisation, kilowatt-hours sold, site margins, maintenance capex and free cash flow.Connections and site rights have value and these are the 50 Zood and EVN locations.SEIT confirmed that Zood’s FY26 operating cash was retained in the business, not sent to Holdco. So Zood can be profitable without helping SEIT repay its RCF today.The working model assumes the following levels of Cash generation.These are Oak Bloke projections, not reported Zood forecasts.
3. Huntsman — a steam engineHuntsman Energy Centre supplies steam under a long-term industrial arrangement. Commercial operation began in June 2023 after delays. The March 2025 equity valuation was £13m, but water treatment, equipment defects and steam-compressor reliability caused problems. A buyer pays for dependable contracted steam, not a faulty boiler. Establish reliability before selling, if the cost of waiting is justified.
4. Citi Riverdale — small but usefulCiti Riverdale is more straightforward, if tiny. My reconstruction implies about £2m equity value from £3m enterprise value and £1m historical debt. Bundle it with similar assets rather than spend a fortune selling it alone.5. V.C. Tech Bets rather than infrastructureThe technology positions are different. Their value may be real, but a minority stake in a promising company is not the same as distributable cash:
5a
TurntideSEIT invested approximately £8m into Turntide Technologies in May 2022 and a further £3.1m in August 2023. That gives us about £11.1m of identifiable historical investment. Turntide develops efficient electric motor and electrification technology.There is encouraging evidence of continuing industrial development. In August 2026, Turntide announced selection for a £17m matched-funded UK manufacturing project involving axial-flux motors, subject to government approval.That’s relevant to its commercial prospects. However, a £17m project is not a £17m payment to SEIT, nor does it establish a valuation for SEIT’s equity interest.My conclusion: Turntide may have meaningful strategic value, but the wind-down creates a mismatch between the company’s potentially long commercial development timetable and SEIT’s requirement to realise cash.
5b. Iceotope — an interesting beneficiary of AIIceotope is a UK liquid-cooling technology company. SEIT’s initial commitment in June 2022 was approximately £3m. The investment thesis is easy enough to understand. Higher-density computing creates cooling problems, especially in AI infrastructure.And in May 2026 Iceotope announced a $26m Series B financing round led by Two Seas Capital and Barclays Climate Ventures, with participation from other investors. That provides fresh third-party evidence of interest in Iceotope’s technology.Without a valuation, terms and diluted ownership, I cannot translate $26m of company funding into an accurate valuation of SEIT’s stake. This is a particularly important distinction in venture investing. A company can become more valuable while an early investor’s ownership percentage is diluted.My conclusion: Iceotope offers attractive strategic upside and has fresh external financing validation.
5c. Rondo Energy — storing heat in bricks Rondo Energy develops industrial heat batteries. Its technology stores electrical energy as heat in inexpensive solid materials, enabling industrial users to receive high-temperature heat or steam. SEIT invested approximately £2.4m in June 2023.Rondo’s industrial applications make the business unusually relevant to SEIT’s broader investment philosophy. In January 2026, Rondo and Covestro announced the start of construction of a heat-battery installation at Covestro’s Brunsbüttel site in Germany, with commissioning planned for the end of 2026.This is a useful commercial milestone. However, a technology entering commercial deployment can still be many years away from generating substantial shareholder distributions.The investment may ultimately command a meaningful strategic valuation, but it is unlikely to solve SEIT’s immediate liquidity requirements.My conclusion: Rondo is precisely the type of asset I wouldn’t want management to dispose of cheaply simply because its present cash generation is negligible.Nevertheless, some realistic price must be attached to the time and uncertainty involved in exiting the stake.
5d. SOGA, Sustainable Living Innovations and BlocPowerThese are smaller positions, but deserve inclusion rather than simply disappearing into an anonymous residual number.SOGA is associated with commercial rooftop solar investment in Asia, including Vietnam. SEIT originally invested approximately £2m in April 2021.It may offer strategic or project value, but I don’t have sufficient evidence to forecast meaningful cash distributions.Sustainable Living Innovations (SLI) received an approximately £4m SEIT investment in October 2021. Its modular-building technology is interesting, but commercial viability and the residual value of SEIT’s equity matter more than the original investment narrative. There is also public US litigation involving SLI, including a November 2025 order relating to an unpaid settlement and entry of judgment.BlocPower is especially important from an accounting perspective. SEIT’s historical commitment was much larger than the approximately £0.2m I could identify as actually deployed by March 2023.For all three, I would expect opportunistic disposals or transfers, rather than significant near-term operating distributions.6. Reconstructing the historical investmentHere are the four modelled portfolio outcomes. All are net of asset-level debt, but before deducting SEIT’s Holdco RCF and central wind-down expenses.Detailed breakdown:These amounts also mix investment commitments, inferred historic costs and broader programme funding. They should not be mistaken for a precisely audited cash-investment ledger. Nevertheless, they provide a useful perspective.Against approximately £84m of identified historical deployment, the residual portfolio has a reconstructed current NAV of approximately £80m.These don’t look like a collection of assets whose carrying value can automatically be recovered in a hurry.7. Turning £80m of NAV into cashMy base case is that £80m turns into £69m by FY29 with Cash Received being modest over the next 3 years (£7.25m only). In fact I assume further money goes to the portfolio and supports the portfolio.The Cash Bridge Estime to FY29In a bull case SEIT recovers slightly more than NAV while a Severe Bear leaves much of the portfolio effectively worthless.These amounts are net of project debt.8. If we refocus on the actual question the £69.1m Base for the Odds and Sods could still be too generous. Zood’s site economics are insufficiently observable; Huntsman’s defects may persist; and minority investors can be diluted or forced to accept poor secondary-sale prices. Buyers knows SEIT is winding down.Nor does the Kyotherm disposal at 91% of NAV prove that this more awkward collection will achieve anything similar. Much of the £80m remains reconstructed rather than individually disclosed. A £32m Severe Bear is the reminder that accounting value and realised cash are different things.9. Conclusion — Calamitous? Or Calm down dear?£80m on the books. £69.1m in my Base Case. That’s 6.37p a share before Holdco costs. In my Base Case we are now at 40.8p per share capital returns.And two assets still to go.Zood dominates the valuation risk. Huntsman needs dependable operations. Turntide, Iceotope and Rondo have genuine commercial promise, but that is not the same as a cheque for SEIT shareholders.Sell what’s easy, wait only where time demonstrably adds value, and don’t let the tail hold up the rest of the wind-down. Cash received — and when — is the scorecard.
RegardsThe Oak Bloke.Disclaimers:This content is for educational and informational purposes only. It does not consider your personal circumstances and is not financial, investment, tax, legal, or professional advice. Nothing here is a recommendation, offer, or solicitation to buy, sell, or hold any investment. Investing involves risk, including the loss of capital. You are solely responsible for your own decisionsMicro cap and Nano cap holdings might have a higher risk and higher volatility than companies that are traditionally defined as “blue chip”PS: In my Severe Bear Case model the Detractors are still sneeringly happy. Just 13.2p recovered post DCF vs 33p can SEIT make 19.8p with just two Assets left?
Greencoat UK Wind plc (“UKW” or the “Company”), the leading listed renewable infrastructure fund, is today hosting a Capital Markets Event for institutional investors and analysts.
The event will set out how UKW will build on its established business model, bringing its scale and self-generated capital to a broader set of UK wind investment opportunities that deliver more durable long-term returns for shareholders.
The Company’s business model has generated £1.1bn for re-investment since IPO, with a similar amount of self-generated capital anticipated over the next five years. The Company will outline how it will apply this capital in a broader set of competing opportunities that will include selective investment in construction, life extension and repowering, while retaining operational assets at the core of its portfolio.
Lucinda Riches, Chairman of Greencoat UK Wind, said:
“UKW has built a high-quality portfolio of operating wind farms over more than a decade, delivering strong cash generation and a dividend that has grown in line or above inflation. Our scale, ability to fund investment from within and established expertise put us in a strong position to capitalise on the opportunities ahead.
“Our core investment proposition remains unchanged. What is evolving is how we deliver it. By broadening our investment toolkit, we can access a wider range of attractive opportunities within UK wind, extend the life of our portfolio and deliver a stronger, higher value portfolio for our shareholders, while maintaining our disciplined approach to capital allocation.”
Acquisition of remaining minority interest in a 96.4 MW wind portfolio
The Company today announces that it has acquired the remaining 20 per cent stake in a 96.4 MW portfolio of five operational windfarms in the UK from EDF Invest, taking its ownership to 100 per cent. Consideration for the transaction was circa £10.5m, funded from UKW net cash generation.
Consolidating ownership gives UKW full control of the operational life of these assets. Further, UKW will enter a joint development arrangement with EDF power solutions to progress the potential for repowering. The asset management, operations and maintenance arrangements with EDF power solutions remain in place.
At today’s event management will discuss the prospects for these assets, including the work underway to progress life extension and repowering.
The Directors of TwentyFour Income Fund Limited (“TFIF” or the “Company”), the FTSE 250-listed investment company that invests in less liquid higher-yielding UK, European, US and Australian asset-backed securities have declared a dividend in respect of the quarter ended 30 September 2026, payable as follows:
Ex Dividend Date 22 October 2026
Record Date 23 October 2026
Payment Date 6 November 2026
Dividend per Share 2.00 pence per Ordinary Share (Sterling)
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO THE UNITED STATES
Sequoia Economic Infrastructure Income Fund Limited (“SEQI” or the “Company”)
MONTHLY UPDATE & COMMENTARY – September 2026
The NAV per share for SEQI, the largest LSE listed infrastructure debt fund, decreased to 90.43 pence per share from the prior month’s NAV per share of 91.50 pence, representing a decrease of 1.07 pence per share.
pence per share
31 August NAV
91.50
Interest income, net of expenses
0.57
Asset valuations, net of FX movements
-1.64
Subscriptions / share buybacks
0.00
30 September NAV
90.43
Interest income, net of expenses, of 0.57 pence per share partially offset the 1.64 pence per share decline in asset valuations, net of FX movements, resulting in an overall NAV decrease of 1.07 pence per share.
Asset valuations, net of FX movements, declined by 1.64 pence per share during September, comprising:
· 1.05 pence per share, of which a decline of 0.95 pence per share was due to adjustments to Active Care Group (“ACG”), as outlined in the “Ongoing investment in ACG” section below.
· 0.27 pence per share from lower fixed-rate loan valuations, largely driven by the material rise in risk-free rates during September. These unrealised mark-to-market losses attributable to interest-rate movements are expected to unwind as investments approach repayment.
· 0.32 pence per share from other valuation and FX movements, mostly driven by unrealised FX losses on the hedging book.
As the portfolio is approximately 100% currency-hedged, no material net FX gains or losses are expected over time. However, differences in the valuation methodologies used for FX hedges and the underlying investments can give rise to short-term unrealised FX movements in the NAV. These fluctuations typically reverse over time.
Key Performance Highlights – September 2026
Dividend yield of 8.10%[1], based on the closing share price of 84.90 pence as at 30 September and the annual dividend target of 6.875 pence per share.
Weighted average portfolio yield-to-worst (“YTW”) was 9.61% as at 30 September, reflecting the portfolio’s strong income returns.
Portfolio pull-to-par[2] (which is incremental to NAV as loans mature over time) was 4.53 pence per share as at 30 September, increasing from 4.29 pence per share as at 31 August.
12-month (to 30 September) share price total return was 18.64%.
Performance Highlights
Cumulative Total Returns
1Y
3Y
5Y
NAV
3.87%
21.29%
25.15%
Share Price
18.64%
31.83%
18.25%
Market Summary – September 2026
·
Risk-free rates increased sharply across SEQI’s key investment regions during September. The US 5-year Treasury yield rose by 0.60% to 5.09%, the UK 5-year gilt yield by 0.35% points to 4.98%, and the German 5-year government bond yield by 0.30% points to 3.33%. These increases generally resulted in downward valuation movements for the portfolio’s fixed-rate investments, equivalent to 0.27 pence per share.
·
Elevated energy prices, particularly diesel, continued to exert inflationary pressure through higher transport, logistics and production costs. The Investment Adviser expects these pressures to persist while the Russia-Ukraine war and conflicts in the Middle East continue to disrupt refining capacity and energy supplies.
·
Eurozone headline inflation increased to 3.2% in August, UK CPI rose to 3.1%, and US headline inflation remained elevated at 3.4%. At their September meetings, each of the Federal Reserve and ECB increased interest rates by 0.25%, while the Bank of England maintained the rate at 3.75%.
·
In a higher interest-rate environment, SEQI benefits from its dynamic interest-rate positioning, with 55.5% of the portfolio invested in fixed-rate instruments as at 30 September.
·
Credit spreads remain tight relative to historical averages. Any resulting market dislocation or spread widening may create opportunities for SEQI to originate new loans at attractive risk-adjusted returns, supported by its disciplined credit approach and flexible investment strategy.
Portfolio Update – September 2026
Revolving Credit Facility and Cash Holdings
·
As at 30 September, SEQI had drawn £87.9 million under its £250 million revolving credit facility and held cash of £41.2 million, inclusive of interest income. Net undrawn investment commitments stood at £54.0 million.
New Investment Activity – September 2026
·
A senior secured loan of $60 million extended for Project Cloud, financing the acquisition of a portfolio of six operating power generation assets in New York State with a combined capacity of approximately 1.55 GW. Taking account of upfront fees and when converted into SEQI’s base currency, the yield to maturity (“YTM”) on this loan is 10.34%.
·
A drawdown of €4.4 million by Portuguese High-Speed Rail, a project company developing a high-speed railway line in Portugal connecting Porto to Aveiro, forming part of the wider Lisbon-Porto high-speed rail corridor. SEQI’s total commitment is €24.0 million. When converted into SEQI’s base currency, the YTM on this loan is approximately 9.44%.
·
A drawing of approximately £5.2 million by ACG Bidco Ltd under a senior loan facility. An update on the company’s exposure to the Active Care Group and exit strategy is covered in more detail below.
No investments repaid during September.
Ongoing investment in ACG
Active Care Group, or ACG, is the UK’s leading provider of complex care, with over 5,000 employees and supporting over 2,000 people each day. Services include neuro-rehabilitation, brain and spinal injury, learning disabilities and autism, and adult mental health, and are provided through a mixture of specialist hospitals, residential facilities and care in the home. The Company acquired the entire share capital of ACG in May 2024 following a restructuring of the business. Since then, the Company has provided funding to improve the quality of clinical care, as evidenced by materially better Care Quality Commission ratings across its estate.
The Company’s current exposure to ACG consists of various classes of senior loans, totalling 5.0% of NAV, that are held at the operating company level and are supported by underlying assets and cash flows from the business. In addition, SEQI has exposure to ACG through a Holdco loan, currently equal to 1.3% of NAV, which is held higher in the ACG group capital structure, the value of which is dependent upon the residual value of the ACG group business after its senior debt has been repaid. This economic substance of this tranche is, equivalent to the full equity interest in the business.
The exit strategy from ACG is continuing and consists of three phases:
1. A strategic refocus of the ACG business, which is already underway, from a predominantly public-sector funded revenue model to one with a significantly higher proportion of private-pay revenues, which are generally more profitable and typically more resilient to cost pressures. This business, under the Active Neuro brand, will focus on neuro rehabilitation, which is regarded as a fast-growing, under-served and high-margin sector of the UK healthcare market. This transition of the ACG business will involve both opening new facilities and repositioning existing ones. The Company will be providing financial support to ACG with funding for capex to bring new facilities into active service delivery, and funding for certain opex items which include costs associated with existing facilities that are being re-positioned. This additional future funding is estimated to be approximately 0.9% of current NAV of SEQI, which equates to approximately £12.5 million, and is expected to be largely provided to ACG over the next three months.
2. In parallel with the re-orientation of its business portfolio, ACG is in the process of a disposal programme involving divesting certain non-core and relatively low-growth business divisions. This asset optimisation process began with the successful disposal of Remeo, a specialist provider of inpatient ventilator weaning and respiratory rehabilitation care, to SOL Group earlier this year. Further disposals are expected over the coming 12 months. Proceeds from these disposals are expected to reduce group indebtedness and provide further funding for investment into growth opportunities within the Active Neuro division.
3. SEQI intends to fully exit from the business after the Active Neuro division has scaled up and the completion of the disposal programme. Additionally, it may be possible for ACG to raise third-party funding prior to that, which may result in a reduction in SEQI’s exposure to the business.
The Company is mindful of the execution risks associated with delivering the exit strategy outlined above, notably the successful disposal of non-core assets and the pivot to a business with a much higher exposure to the private sector. The current valuation of its investment in ACG reflects the present value of an estimate of the final exit value of the business, taking account of a range of outcomes of ACG’s strategy. The Company is closely monitoring and will continue to incorporate any changes in expected outcomes into the modelling used in SEQI’s published monthly valuations.
Asset valuations are independently reviewed every month by PricewaterhouseCoopers LLP (“PwC”).
Portfolio Composition
·
SEQI’s invested portfolio as at 30 September consisted of 49 private debt investments and two infrastructure bonds, diversified across 8 sectors and 25 sub-sectors.
·
Private debt investments which allow SEQI to capture illiquidity yield premiums, represented 94.3% of the total portfolio.
·
The weighted average loan life was 3.1 years.
·
SEQI’s portfolio remained geographically diversified, with 44.2% of investments located in the U.S., 22.6% in the U.K. and 33.2% in Europe.
Non-performing Loans – September 2026
·
SEQI continues to work towards maximising recovery from two non-performing loans in the portfolio (representing 1.4% of NAV[3]). There are no additional updates on non-performing loans during September.
Diversified Portfolio
Portfolio by Sector
Notes:
· Valuations are independently reviewed each month by PwC.
Share Buybacks – September 2026
·
SEQI did not repurchase any ordinary shares during September 2026.
·
SEQI first started buying back shares in July 2022 and since then to the end of September 2026, has spent £242.1 million buying back 300,905,720 ordinary shares.
·
The Board applies a dynamic approach to share buybacks which takes into account available portfolio liquidity, the relative trading discount to NAV per share and other relevant factors.
·
The share buyback programme will continue to remain in place and delivers a positive contribution to NAV per share.
Octopus Renewables Infrastructure Trust plc, the diversified renewables infrastructure company, today announces that it has signed a conditional agreement to acquire Barnsdale Solar Park (“Barnsdale”) from OnPath Energy, one of the UK’s leading onshore renewable energy developers.
Barnsdale is a 55 MWp solar project located in West Yorkshire and is currently under construction. Once operational, it is expected to generate clean electricity equivalent to the annual needs of approximately 19,000 homes. The project is being delivered by Goldbeck Solar, with whom ORIT has an existing relationship.
Barnsdale has been awarded a fixed price, CPI-linked government-backed Contract for Difference (“CfD”) running until 2041. The acquisition by the Company is conditional upon the site meeting the relevant requirements ahead of the CfD commencement deadline, which we expect to be satisfied in March 2027. The total acquisition price, including remaining construction costs, will amount to approximately £34.6 million.
The acquisition of Barnsdale is expected to contribute positively to ORIT’s 9-11% medium- to long-term total return target under the ORIT 2030 strategy. The Company continues to pursue further construction-stage investment opportunities alongside asset sales, as part of its capital recycling programme.
David Bird and Chris Gaydon, co-fund managers of ORIT, commented: “The ORIT 2030 strategy is focused on building long-term shareholder value through disciplined capital allocation. Barnsdale is a good example of this approach. The agreed terms are attractive and the project is expected to deliver a return consistent with the ORIT 2030 targets, while the purchase structure carefully manages the remaining construction and delivery risk.
“Once the acquisition completes, Barnsdale will add further scale to our UK solar portfolio and its contracted revenues are expected to contribute to dividend cover from FY 2027 onwards.
“We are pleased to be investing at this stage of the project, with construction progressing well and Goldbeck Solar, who built ORIT’s Breach solar farm, bringing its strong track record to bear on its delivery. The acquisition also establishes a new relationship with OnPath Energy that may lead to similar opportunities in the future.”
Phil Austin, Chair of ORIT, commented: “Barnsdale Solar Park offers an attractive risk-adjusted return, supported by fixed price, CPI-linked revenues that will increase the contracted proportion of the portfolio and provide long-term cash flow visibility.
“The acquisition reflects the selective and disciplined approach to capital allocation underpinning ORIT 2030 and demonstrates the type of selective investment opportunity we continue to pursue as part of our capital recycling programme.”
NCYF is set to become the only bond fund to be an AIC Dividend Hero.
Kepler Overview
CQS New City High Yield Fund (NCYF) delivers an exceptionally high yield, 8.9% at the time of writing, having grown its dividend for 19 consecutive years. One more year will qualify it for AIC Dividend Hero status.
Managers Darren Toner and Ian ‘Franco’ Francis invest in the smaller, more complex and less liquid issues in the high yield bond market to generate this income. NCYF uses the closed-ended structure to the full, taking advantage of its ability to handle illiquidity, gearing up the portfolio and managing a revenue reserve which supports payments in times of volatility. The appeal to income investors is obvious, and the trust has mostly traded on a premium for a number of years, regularly issuing shares to grow.
Current expectations are for interest rates to rise in the coming quarters in the key jurisdictions of the UK, US and EU, and this would play into the managers’ hands. Higher rates are likely to feed through into higher absolute yields on offer, and make it easier for the managers to reinvest maturing bonds into those paying higher coupons. The portfolio has a low duration, having a high yield and short average time to maturity, and so the impact on portfolio values should be small.
Darren and Franco continue to find plenty of opportunities in the market. They note any stress from volatility in energy markets, from higher rates and from the impact of AI should lead to differentiation in company performance and outlook and therefore opportunities for active investors.
Franco is set to retire next May, but has worked with Darren, head of the global high yield and financials teams at CQS, for 16 years and the specialist team of analysts remains in place, so there will be no change to the approach.
Analyst’s View
NCYF employs a relatively straightforward strategy to generate an exceptionally high yield. Darren, Franco and their team specialise in a naturally inefficient part of the market which is too small for most investors and which often lacks external credit ratings or analyst coverage. They can do this thanks to the closed-ended structure, which means they can own relatively illiquid securities and hold them to maturity. The ability to gear up structurally and set aside income in a revenue reserve are other key factors behind the trust’s success in growing the income year on year from such a high base.
Franco has managed the trust successfully for almost 20 years, but we are confident that there shouldn’t be any disruption from his retirement. Darren has led the team which generates the analysis and stock-picking ideas Franco has employed, and spoken daily with Franco for 16 years, implementing the team’s ideas in different mandates. The bedrock of the approach is devoting the resources to an inefficient part of the market many investors don’t cover, with an experienced analyst team.
We think NCYF is an outstanding option for investors who want a high yield and have a long-term time horizon. Capital growth is unlikely to be a significant part of the investment case given the income-first mandate and could be negative for periods, while the premium rating increases the importance of having a longer-term time horizon.
Bull
Exceptional income offering, both yield and dividend growth
Highly experienced and specialist managers working poorly-covered niches
Healthy revenue reserves
Bear
Significant premium could deliver losses to newer shareholders if it deflates
Issue and issuer specific risks have to be borne in mind with a concentrated and illiquid portfolio
Continued growth would hamper ability to invest in the same way, albeit this is not likely for some years
The third quarter of 2026 delivered another sharp change in market leadership, continuing a pattern that has defined the year so far. After finishing dead last in the second quarter, Energy surged 16.5% in Q3 and easily led every major sector. At the other end of the rankings, Utilities fell 12.4%, despite the strong long-term demand story tied to electricity consumption, grid investment, and data-center development.
The S&P 500 itself gained just 2.0% for the quarter, but that modest headline return concealed an unusually wide dispersion beneath the surface. Nearly 29 percentage points separated the best- and worst-performing sectors, which meant that simply knowing the direction of the broader market told investors very little about what was happening underneath it. Sector selection mattered enormously.
Energy Takes the Lead
Energy was the clear standout, gaining 16.5% and reversing much of the weakness from the prior quarter. In Q2, the sector had fallen 12.7% and finished last, but I noted at the time that the decline would likely not last. Energy is inherently cyclical, and sentiment can shift very quickly when crude prices, geopolitical risk, or expectations for supply change.
That is exactly what happened in Q3. Crude prices became increasingly volatile as geopolitical tensions tightened global supply expectations, while refining margins strengthened as diesel markets remained constrained. Those conditions improved the outlook for both producers and refiners, and investors responded by moving aggressively back into the sector.
Health Care finished a distant second with a 6.6% gain, which was a solid showing in a quarter when several economically sensitive sectors struggled. Communication Services gained 3.9%, while Technology advanced 2.9%. Technology’s performance was especially notable because it followed an extraordinary 43.5% gain in Q2, suggesting that enthusiasm for artificial intelligence, semiconductors, and data-center-related growth remained intact even as the pace of gains slowed considerably.
Higher Rates Changed the Equation
The other major force shaping Q3 was the interest-rate environment. Rising inflation concerns, higher energy prices, and renewed pressure in the bond market pushed yields higher and changed the relative appeal of many rate-sensitive sectors. That helps explain why so much of the weakness was concentrated in areas of the market where financing costs and dividend yields matter most.
Financials were essentially flat, while Consumer Staples lost 2.3% and Materials fell 3.8%. Real Estate declined 6.3%, reflecting the familiar pressure that higher borrowing costs place on property values, refinancing, and investor demand for income-oriented assets. Consumer Discretionary fell 7.0%, as higher energy costs and tighter financial conditions created a more difficult backdrop for household spending.
Industrials dropped 9.6%, which was a striking reversal after the sector gained 14.8% in Q2. The longer-term themes behind the sector remain intact, including infrastructure investment, defense spending, reshoring, electrification, and the physical buildout associated with artificial intelligence. But Q3 was a reminder that even strong secular trends can be overwhelmed temporarily when valuations, financing conditions, and investor expectations shift.
Utilities Take the Biggest Hit
Utilities were the worst-performing sector, falling 12.4%, and at first glance that may seem surprising. Electricity demand remains strong, data-center development continues to require enormous amounts of power, and utilities are investing heavily in generation, transmission, and grid modernization. None of those long-term drivers disappeared during the quarter.
The problem is that utilities are also among the most capital-intensive businesses in the market. They routinely borrow large amounts of money to finance new generating capacity, transmission lines, and other infrastructure, so higher interest rates can raise financing costs at the same time that rising Treasury yields make utility dividends less attractive by comparison. That combination can create a powerful short-term headwind even when the underlying business outlook remains favorable.
This distinction is important for investors. Falling utility share prices do not necessarily mean that electricity demand has weakened or that the long-term investment thesis has deteriorated. In many cases, the market is simply demanding a higher return because competing yields have risen, which can eventually create opportunities for income investors willing to be selective.
That selectivity is important because not all utilities are equally exposed. Companies with heavy debt burdens, aggressive capital programs, or difficult regulatory environments can come under much greater pressure than those with stronger balance sheets, constructive regulators, and more predictable earnings growth.
Another Quarter, Another Rotation
The most striking feature of 2026 has been how quickly sector leadership has changed from one quarter to the next. Energy led in Q1, collapsed to last place in Q2, and then returned to first place in Q3. Technology went from lagging early in the year to a 43.5% gain in Q2 before settling back to a much more modest 2.9% advance in Q3. Utilities have experienced their own swings as investors alternate between focusing on long-term electricity-demand growth and worrying about interest rates.
That kind of rotation is a useful reminder that sector performance rarely moves in a straight line. The strongest sector in one quarter can easily become the weakest in the next, particularly when the underlying drivers are commodities, interest rates, or rapidly changing investor expectations.
Looking ahead, oil prices and geopolitical developments will remain crucial for Energy. The sector has benefited from stronger commodity prices and tighter product markets, but those conditions can reverse quickly if supply disruptions ease or demand weakens. Interest rates will be especially important for Utilities and Real Estate, since any meaningful decline in bond yields could quickly improve their relative appeal after a difficult quarter.
The AI investment cycle also remains important, but increasingly it should be viewed as more than just a Technology story. Data centers require electricity, transmission equipment, cooling systems, construction, and other physical infrastructure, which means the longer-term effects extend well beyond software and semiconductors. Quarterly market performance will continue to fluctuate, but the underlying buildout is still reshaping capital spending across multiple sectors.
Q3 ultimately reinforced one of the clearest lessons of 2026: market leadership can change very quickly. Energy went from worst to first in a single quarter, while Utilities moved in the opposite direction. For investors, that is another argument against chasing whichever sector just posted the strongest return, because some of the better opportunities often emerge when a sound long-term story temporarily falls out of favor.
Hammerson PLC dividend payment date Invesco Bond Income Plus Ltd ex-dividend date Montanaro UK Smaller Cos Investment Trust PLC ex-dividend date Primary Health Properties PLC ex-dividend date
This “stealth” stock-picking strategy unleashed the power of dividends for 71%, 111%, even 148% returns — in ALL markets.
These could be the next 5 winners …
Dear Reader,
Few folks know it, but there’s a simple, underappreciated way that a company’s dividend payout can tell you exactly when the share price is about to gap higher.
In one case, this indicator flashed green and the company’s share price ran up an incredible 130% in five years, generating a tight 148% total return!
In another, this signal marked a 92% total return in less than four years. And its proven predictive power even works in volatile markets like today’s.
In fact, it works BEST in unpredictable times like these.
When you see what this strategy is, I guarantee you’ll be nodding along, wondering how you didn’t consider it earlier.
(I’ll show you exactly how we’ll work together to put ourselves in position for surging dividends that help drive price gains, and hedge volatility, a little further on.)
What I’m about to reveal is especially important now, with markets whipsawing and macro uncertainty running high.
This is a perfect — but time-sensitive! — opportunity to use this strategy to protect our wealth now, and grow it as conditions normalize.
And right now we’re aiming straight at 5 overlooked dividend stockspoised to DOUBLE in 5 years or less, while their dividend payouts TRIPLE.
Read on and I’ll show you exactly how.
Enter the “Dividend Magnet”
My Dividend Magnet strategy consists of 3 “pillars.”
If a stock shows all three of these telltale signs, it’s time to BUY … then ride along as the company’s dividend grows, pulling its share price higher as it does.
And today I’m going to show you, step by step, exactly how the Dividend Magnet delivered that stout 148% return I mentioned a second ago.
Then we’ll discuss those 5 stocks my research indicates are set to soar far ahead of the market in the coming years.
Personally, I think triple-digit gains are squarely on the table with these 5 hidden gems.
But conservative sort that I am, I’m forecasting steady 15%+ annualized returns for the long haul.
That’s enough to double our investment every five years and triple our income stream, too. We’ll happily take that deal! Especially with the low volatility these 5 stocks offer.
Before we go further, though, I should take a moment to tell you a bit more about myself.
My name is Brett Owens and I’m writing to you today from sunny Sacramento, where I’ve lived with my wife and kids since my early days as the founder of a number of tech startups.
But my real passion is dividend investing. You may have seen me on CNBC, Yahoo Finance or NASDAQ, where I’ve been called on to share my methodology for collecting consistent, predictable and reliable retirement income.
My readers and I don’t go anywhere near profitless techs, penny stocks or other gambles you can’t tell your spouse about.
Safety is my No. 1 priority. Always has been. Always will be.
You see, I take a strategically contrarian approach to the markets.
And for the past several years, I’ve helped thousands of readers fund their retirement thanks to what I call “Hidden Yield stocks.”
Take a look at some of the big returns my premium members have seen:
Archer Daniels Midland (ADM): Up 71% in 18 Months (and Counting)
Concentrix (CNXC) Skyrocketed 111.8% in Just 1 Year!
American Electric Power (AEP) “Popped” 27% in Just 8 Months
Of course we both know investing in the stock market does come with some risk, so while we’d like every stock to go up, some recommendations do decline from time to time.
Now, in 2026, there are still plenty of oversold dividends on the board for us, despite the bull market of the last few years. In fact, I expect our next round of picks to do even better than the ones I just showed you.
My Dividend Magnet system continues to be our North Star. I want you to join us.
Whatever your investing goal, this strategy — and the 5 dividend growers I’ll tell you about in a moment — MUST be at the heart of your investment plan.
As you might guess by this point, the humble dividend is the key to our Dividend Magnet approach — but not in the way most folks think.
How Dividends Drove a 75,802% Gain
Dividends really are the “Rodney Dangerfields” of the investing world — they get no respect!
But they should, because growing dividends are the key to thriving through any market.
And if you roll your dividends back into your portfolio, the power of compounding takes over and delivers the sort of growth that tech fanboys (and girls) can only dream of.
Here’s the proof, from our friends at Hartford Funds.
Hartford looked at the years between 1960 and the end of 2025, which included everything: the inflation of the ’70s, economic crashes in 2001 and 2008, the pandemic and, of course, the latest inflation wave.
Here’s what they found: if you’d put $10,000 in the S&P 500 in 1960, you would have had $1,143,013 at the end of the period, based solely on price gains.
That’s not bad: an 11,330% increase.
It shows you why most folks only think about share prices when they invest. After all, with a gain like that, it’s tough to get excited about a dividend that dribbles a few cents your way every quarter.
But here’s the thing: when you reinvest your dividends, the magic of compounding kicks in. The difference is shocking: your $10,000 would have grown to $7,580,231, or more than$6.4 million more than you’d have booked on price gains alone!
That’s a 75,802% profit.
It’s a crystal clear example of how critical dividends are. And you can grab stronger profits if you buy stocks whose dividends aren’t just growing but accelerating.
Which is exactly what we’re going to do in the first step of my 3-part Dividend Magnet strategy …
Step 1: Buy an “Accelerating Dividend”
(for Growth, Income and High Yields)
Even though inflation is sticky now, and rates are still relatively high, in the long run, my forecast is for lower rates.
Why? Today’s inflation largely stems from higher oil spurred by the Iran situation, which will end at some point. (Neither country can afford it to continue.)
In fact, had the conflict not occurred, we’d almost certainly be talking about rate cuts today.
This situation echos 2018, when rates were elevated but Fed chair Jay Powell was edging toward rate cuts.
Lower rates, of course, are great for utility stocks — “bond proxies” that tend to rise as rates fall. So in November of that year, we picked up cell-tower landlord American Tower (AMT), a REIT whose “tenants” include AT&T (T) and Verizon (VZ).
We liked AMT because it’s a classic “tollbooth” play.
The company charges its clients for using its tower network, then hands that cash to investors as a steadily rising dividend. Buying AMT is a much better move than trying to pick winners among the big telcos.
You can see that in AMT’s performance as rates fell during our holding period: It crushed Verizon, America’s biggest telecom provider.
Even better, unlike pretty much any other stock, AMT had been raising its payout every quarter, to the tune of 65% during our holding period!
That rising payout acted like a “Dividend Magnet,” pulling up the share price in lockstep and delivering the 57% total return you see above.
That’s the “Dividend Magnet” in action — I’ve seen it work its magic on share prices time and time again. Like the stunning 148% it drove in our next stock, a chipmaker founded way back in 1930.
TXN’s “Accelerating” Dividend Powered
Us to a 148% Return
Texas Instruments (TXN) is far from the stodgy calculator peddler it was 30 years ago. Today, its analog chips power everything from appliances to industrial sensors and, yes, AI data centers.
Management is known for making shareholders’ interests a priority, and it doles out that cash to them on the regular. Those payouts, in turn, have powered the stock’s Dividend Magnet.
TXN’s dividend soared 120% over the 5 years we held it, helping us bag that 148% total return I mentioned earlier.
It was all thanks to the Dividend Magnet, which you can see pulling up TXN’s share price:
TXN’s Dividend Magnet Fires Up
130% dividend hikes. 120% price gains!
Add those payouts and gains together and you get that stellar 148% total return.
The two “dividends up, share price up” patterns I just showed you were no coincidence.
In fact, this predictable setup can not only tell us when to buy, but when to sell, too …
Consider utility American Electric Power (AEP), which I recommended in February 2024. My readers only held this one for a short time, for the best of reasons: It took off! By the time we sold in October, we were sitting on a sweet 27% total return.
But the reason why we bought AEP in the first place was its powerful Dividend Magnet.
In the preceding decade, its payout had shot up 76%, and its share price had tracked it higher point for point.
Though by February 2024, a gap had opened up. That was our “in”!
AEP’s Payout Pulled Its Share Price Higher, Until a “Payout Gap” Gave Us Our Shot
We pounced. And by October, the share price had closed the gap.
This was important because when a share price catches up to a dividend, and moves past it, it’s a key sell signal.
Share Price Catches the Payout, and We Take Profits
Once the 10-year gap between the price and dividend “reconnected,” we took our quick 27% gain off the table. And rolled it into the NEXT dividend grower!
This is hands-down the most exhilarating part of investing in Dividend Magnet plays like these: When investors (finally) catch wind of them, the stock can pop virtually overnight!
Do all of our calls work out like these? Of course not. I wouldn’t insult your intelligence and say they do. Investing in the stock market involves some risk, even with top-quality large-cap names like these, and you can lose money.
But I think you can see where I’m going here: we buy accelerating dividends, ride them higher and collect bigger payouts and price gains over time. This gives us a huge built-in advantage over investors who rely on traditional measures like earnings per share (EPS) growth, P/E ratios or whatever.
Now that we’ve seen how the Dividend Magnet can tell us to buy (and sell), let’s boost our payout-powered gains with a (wrongfully!) disrespected share-price driver: share buybacks.
Step 2: Toss in a Buyback “Afterburner”
Buybacks get a bad rap, but they shouldn’t, because when done right (i.e., when a stock is cheap), they can light a fire under share prices.
They work by cutting the number of shares outstanding, which boosts EPS and, in turn, share prices. They also boost our dividends because they reduce the number of shares on which a company has to pay out.
And when you combine a solid buyback program with an accelerating dividend, you get something very special indeed!
To see what I mean, let’s loop back to Texas Instruments. The company backstopped its Dividend Magnet with a steady buyback program during our holding period.
That took nearly 7% of its shares off the market:
TXN’s Buybacks Give Its Stock an Extra Kick
As you can see, the company’s Dividend Magnet is humming along beautifully, pulling the share price up as it goes.
Meantime, the buybacks kicked in an extra boost, pushing the shares ahead of TXN’s dividend growth!
Step 3: Use This Powerful Indicator for
Extra Dividend (and Share Price) Safety
Finally, we’re going to safeguard our gains and dividends by purchasing stocks with low beta ratings.
Low what?
Don’t get too hung up on the jargon here.
Beta is a measure of volatility that you’ve probably seen on your favorite stock screener. A stock with a beta of 1 moves at roughly the same speed as the market (up or down). Betas below 1 are less volatile; those above 1 are more volatile.
For example, consider pharma giant AbbVie (ABBV), whose sturdy business results in a steady stock price.
ABBV has a 5-year beta of 0.3, which means it’s 70% less volatile than the S&P 500.
In other words, on days when the S&P 500 is down 3%, this stock should be down less than 1%.
That’s the theory.
In reality, it’s even better.
AbbVie is one of a tiny group of equities that actually gained through the 2022 mess, and by no small amount, either:
ABBV Soared in the 2022 Market Mayhem
Plus, this stock has a potent Dividend Magnet!
Check out how the share price (in purple below) has tracked the payout (in orange) over the last decade, during which we’ve seen rate hikes, rate cuts, a global pandemic, surging inflation and, yes, trade wars.
ABBV’s Dividend Magnet Drives Steady GAINS
Despite COVID, Inflation, Market Volatility and More
We’re not recommending ABBV today, because the share price has leapt ahead of dividend growth, as you can see on the right side of the chart above. This shows that ABBV is currently overvalued.
Taken together, this gives us a clear picture of how a rising dividend, buybacks and a low beta rating give this one downside protection, making it a true “recession-proof” dividend.
My name is Brett Owens and I’m writing to you today from sunny Sacramento, where I’ve lived with my wife and kids since my early days as the founder of a number of tech startups.
