Story by Alan Oscroft

The Motley Fool

I’ve been doing a bit of research on the habits of successful passive income investors, and I came across a bit of a surprise.

They all seem to name dividend stocks as a major part of their investment portfolios — though that’s not the surprising part. No, what I hadn’t expected was to find a large number of them recommending real estate.

Yes, real estate has been profitable for a number of people. But I had a very shaky venture into it. And it has a fair few drawbacks for individual investors.

Not really passive

One is that many of us won’t have the capital to go for, say, rental properties. It’s not the kind of thing we can get started with just a few hundred pounds, like we can with a Stocks and Shares ISA.

It’s not entirely passive either. Finding tenants, collecting rent consistently, and maintenance all take time and effort. And the latter can sometimes prove very costly if you’re unlucky.

But there’s a way we can get into real estate without facing those major hurdles. And that’s to consider buying real estate investment trusts (REITs). They’re investment companies that put their money into various kinds of properties, and they do all the management. All we have to do is buy shares in them, just as we do with shares in general.

Healthy property

I like Primary Health Properties (LSE: PHP), which invests in GP surgeries, pharmacies, dental clinics. Importantly, they’re mostly rented to the NHS on long-term leases.

Having the UK government as its main customer provides some stability and predictability. But it hasn’t made the trust immune to weak property values in recent times. Over the past five years, the PHP share price has fallen 35%.

Higher interest rates are a burden, especially with debt on the books. At the end of the first half this year, net debt reached £1,367m, up from £1,323m in December 2024. There doesn’t seem to be any liquidity problem, but it could keep the shares down for longer.

Big dividends

On the bright side, a lower share price means a bigger dividend yield. Right now, we’re looking at a forecast 7.9%. And analysts are forecasting rises between now and 2027. We could have long-term capital appreciation too — especially when interest rates fall.

Is Primary Health one to consider for long-term passive income? Even in the current tough real estate market, I think it has to be, especially while the share price is low.

There are plenty of other REITs to choose from, addressing different sectors of the property market.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

Millionaire style

Quite a few millionaire investors also invest for deferred income. That is, they aim for total returns — capital and dividends — and plan to convert it to income later.

So how do we emulate the millionaire approach to passive income? If we focus mainly on dividend shares, include a REIT or two in our portfolio, and look for long-term growth opportunities too — we could get pretty close. And we don’t have to be millionaires to start.

AI Stocks Are So 2025. This Snubbed 8.1% Dividend Is the Next Big Play

Michael Foster, Investment Strategist
Updated: June 1, 2026

The stock market is roaring, and according to the media, it’s all because of AI.

But is that really true?

Because if it is, there must be other corners of the market, beyond tech, that are being overlooked. And that’s where we contrarians want to go hunting for high, steady (and cheap!) dividends.

Let’s break this question down, starting from a 50,000-foot view, then zeroing in on an ignored 8.1%-yielding fund with strong upside as investors come to realize its true value.

Source: State Street Investment Management

This table is a great starting point—a kind of roadmap to where the cheapest stocks in the S&P 500 might be hiding out.

It’s simply a table of ETFs for every S&P 500 sector, and it shows us that, yes, tech is a big factor behind this year’s 10% gain (as of this writing) in the overall index.

Since the start of the year, tech has gained an eye-watering 29.4% as of this writing, pretty well all on AI strength.

But that’s not the only reason for the market’s gain. Energy, for example, edges it out, up 28.6% on the oil shortfall caused by the Iran conflict. Materials, industrials and even real estate have also beaten the market’s return.

What I really want to draw your attention to in the chart above is the flat performance of consumer-discretionary stocks.

On its face, you can understand why this is the case: Inflation is high. Hiring is sluggish. Wage growth is waning (to the point it slipped behind the CPI in April). Consumer sentiment? In the tank.

And yet, there’s plenty of evidence that consumers, while grumpy, are still spending. Consider home renos, which, according to the chart below from Apollo Global Management, have surged to account for a quarter of all private-construction spending.

Source: Apollo Global Management

Today’s level even tops the pandemic reno boom, when we were all building home offices and redecorating, thinking we may never go outside again!

It also clearly shows the strength of the American consumer. Compare it to the surge in 2010, for example. Back then, interest rates on home-refinance loans were low. Today, they’re high. Inflation was 2% then. It’s 3% now—after only gradually moving down from its sickening 9% peak in 2022.

But none of that has put off consumers from spending on one of the biggest-ticket items there is for most people. This, in other words, is a textbook contrarian opportunity: a powerful force (consumer spending, in this case) mainstream investors are downplaying.

Here’s how we’re going to go after it.

Forget ETFs—This 8.1%-Paying CEF Is the Best Play on Resilient Consumers

The first place most people would look in a case like this is an ETF like the State Street Consumer Discretionary Select Sector SPDR ETF (XLY). But we’re dividend investors, and XLY’s sad 0.75% yield just won’t cut it for us.

Instead, we’re looking to this 8.1%-yielding closed-end fund (CEF) called the Eaton Vance Tax-Managed Buy-Write Opportunities Fund (ETV). As we’ll see, it’s nicely positioned to profit from the strong US consumer, including one holding that’s tied directly into the home-reno boom.

Let’s start with the fund’s performance:

ETV Crushes Consumer Stocks

As you can see in purple above, ETV has beaten XLY—the consumer-discretionary ETF, in orange—on a total NAV return basis over the last five years.

(By “total NAV return” I mean the performance of the fund’s portfolio, including dividends collected, as opposed to its market price. The difference between the two creates the big discount ETV currently sports, which we’ll talk about shortly.)

And while the fund’s 150 holdings are weighted toward tech, at 39% of the portfolio, that’s a bit deceiving because its top tech holdings are mainly consumer-focused, including Apple (AAPL), Amazon.com (AMZN) and Tesla (TSLA).

And there are plenty of other consumer favorites further down ETV’s holdings list, including Chipotle Mexican Grill (CMG), Best Buy (BBY), Carvana (CVNA), Hershey (HSY), Nike (NKE), Darden Restaurants (DRI), Yum! Brands (YUM), Marriott International (MAR) and Home Depot (HD).

All of these companies are benefiting from Americans’ continued strong spending, with Home Depot directly profiting from surging home renos. That, in turn, is supporting ETV’s 8.1% dividend, which rolls out monthly.

That income also comes from the fund’s covered-call strategy, which provides some downside protection while bringing in cash, since it collects fees on all the options it sells, regardless of how the underlying trades turn out.

One would think a dividend as high as this one, backed by an undervalued basket of blue chips and a proven covered-call strategy, would be high on investors’ buy lists.

Instead, ETV’s 8% discount to NAV is at one of the widest levels I’ve seen in years. That markdown has also bottomed out recently, suggesting investors are finally starting to take notice of this smartly run CEF.

ETV’s Discount Hits Bottom—Then Bounces 

With this momentum, ETV will likely get more bids, boosting its market price and shrinking the discount further. In fact, that’s already starting to happen, as ETV’s total return (based on market price this time) has outrun XLY this year.

ETV’s Narrowing Discount Pushes It Past the Benchmark

Before we wrap, let’s shift back to the dividend: To most investors, ETV’s 8.1% payout seems high, but it’s actually lower than the 8.8% average for all CEFs tracked by my CEF Insider service. So there’s nothing particularly unusual here.

ETV had a stable dividend for years until the 2022 crash, which forced management to reduce it. But another cut is unlikely given the economy’s strength. But even if that were to happen, it would likely only reduce ETV’s 8% yield to something like 7.2%. That’s still a monster payout.

With its high income and still-wide discount, ETV is clearly a better way to profit from America’s underappreciated consumer spending than XLY. And it’s just one of many CEFs that crushes index funds—whether you measure by dividend yield, past performance or both.

One counter intuitive aspect of energy cost rises that I wanted to flag, is just how badly UK listed Renewables Energy Infrastructure Funds (REIFs) have performed since Putin invaded Ukraine. Below is a chart showing that even the best performing funds, such as HICL and Greencoat UK Wind are down by over -25% since Feb 2022. Solar panel funds like Bluefield Solar Income Fund (BSIF) and Foresight Solar Fund (FSFL) have fared worse, down by almost -40%. Next Energy Solar Fund (NESF) and battery funds like Gore Street Energy Storage (GSF) are down by around -55%. Hydrogen One (HGEN) fell -95% as hydrogen infrastructure is capitally intensive and the returns are uncertain (sound familiar?). The shares were delisted last month.

Since Donald Trump began hostilities against Iran, performance has improved for Greencoat Renewables (GRP) +17% and Octopus Renewables Infrastructure (ORIT) +13%, but these are still down -30% to -40% over the longer term horizon in the chart above.

This can serve as a reminder that investing is not about predicting the future. If you had had perfect foresight that Putin would invade Ukraine, and the Labour governments would be keen to encourage investment in renewables as a source of energy independence, then the REIFs might have seemed like an obvious way to play this theme. The reality was that their business models suffered more from rising interest rates than they gained from rising energy costs.

Posted on 27th May 2026 | By Bruce Packard

Don’t you love markets, you make a market comment as above and then a bid arrives and the whole world of Renewables suddenly appear more appealing.

The SNOWBALL currently has £12,351 invested in XSTR cash fund. The fund is a rainy day fund but currently only pays income of 4% pa.

The fund is to buy a couple of coveted Trusts, if the market falls. If the market hasn’t fallen by the end of this year, the cash will have to be re-invested into the SNOWBALL as the extra income will be needed for next years target.

All future income will be re-invested into the SNOWBALL or a new position will be opened.

Current cash to invest £388

Thu 4th June 2026

Edinburgh Investment Trust (The) PLC EDIN Q4 24/7/26 8.40p 4.0
Foresight Environmental Infrastructure Ltd FGEN Advance 26/6/26 1.99p 9.4
Great Portland Estates PLC GPE Q4 10/7/26 5.30p 2.6
Law Debenture Corp (The) PLC LWDB Advance 3/7/26 8.88p 2.9
Londonmetric Property PLC LMP Q4 9/7/26 3.30p 6.6
STS Global Income & Growth Trust PLC STS Q4 3/7/26 2.15p 3.7
Utilico Emerging Markets Trust PLC UEM Advance 26/6/26 2.42p 3.3
VH Global Energy Infrastructure PLC ENRG Advance 14/7/26 1.45p 7.8

I’ve bought for the SNOWBALL 14,159 shares in AIRE for 10k.

The current yield is 8.1%

Alternative Income REIT PLC on Monday said it is not in a position to “form a view on the merits or otherwise” of a takeover proposal from shareholder Glenstone REIT PLC.

On Friday, Glenstone, which owns around 24% of Alternative Income REIT, said it was considering an all-cash takeover of the commercial property investor.

On Monday, Alternative Income REIT confirmed it has received a non-binding proposal and said: “The independent directors, who engaged with Glenstone and its advisers prior to its announcement, note that the possible offer does not include any offer price or range of prices, nor the terms and conditions on which any possible offer might be made.”

As a result, the firm said the proposal “does not include terms capable of detailed evaluation” and said it is not able to “form a view on the merits or otherwise”.

– Alternative Income REIT PLC on Monday said it is not in a position to “form a view on the merits or otherwise” of a takeover proposal from shareholder Glenstone REIT PLC.

On Friday, Glenstone, which owns around 24% of Alternative Income REIT, said it was considering an all-cash takeover of the commercial property investor.

On Monday, Alternative Income REIT confirmed it has received a non-binding proposal and said: “The independent directors, who engaged with Glenstone and its advisers prior to its announcement, note that the possible offer does not include any offer price or range of prices, nor the terms and conditions on which any possible offer might be made.”

As a result, the firm said the proposal “does not include terms capable of detailed evaluation” and said it is not able to “form a view on the merits or otherwise”.

Alternative Income noted that this is not the first time Glenstone has sized up a bid.

 Alternative Income REIT PLC on Monday said it is not in a position to “form a view on the merits or otherwise” of a takeover proposal from shareholder Glenstone REIT PLC.

On Friday, Glenstone, which owns around 24% of Alternative Income REIT, said it was considering an all-cash takeover of the commercial property investor.

On Monday, Alternative Income REIT confirmed it has received a non-binding proposal and said: “The independent directors, who engaged with Glenstone and its advisers prior to its announcement, note that the possible offer does not include any offer price or range of prices, nor the terms and conditions on which any possible offer might be made.”

As a result, the firm said the proposal “does not include terms capable of detailed evaluation” and said it is not able to “form a view on the merits or otherwise”.

Alternative Income noted that this is not the first time Glenstone has sized up a bid.

In November, it made an indicative cash proposal at 66.5 pence per share, around GBP53.5 million in total, “without evidence of funding”. That tilt was at an 11% discount to its closing share price of 75p a day earlier.

Shares in Alternative Income REIT were down 2.3% at 70.22p on Monday morning, for a market capitalisation of around GBP56.5 million.

The firm added: “Whilst the independent directors recognise that the company’s market capitalisation is at the smaller end of the REIT market, the independent directors remain confident in the company’s portfolio and its prospects.”

Alternative Income REIT said its independent directors believe it is now for Glenstone to put forward a proposal, including details of the price being offered, alongside any conditions, so the proposal can be evaluated

18/05/26

10/01/26

A good day for the Watch List shares, they don’t come along very often so enjoy the day when it happens.

BSIF leaves the Watch List.

I’ve sold BSIF after the bid from DRAX for a tiny profit.

BSIF has earned £1,898 in dividends, which have been re-invested in the SNOWBALL, which has earned more income.

I’ve bought for the SNOWBALL 11,971 shares in SUPR and 8430 shares in RECI

Cash for re-investment £10,338.00

BSIF has agreed a bid from DRAX. The SNOWBALL will sell the shares for a profit of around £400, including earned dividends of £1,898.00, which as they were re-invested earned income for the SNOWBALL.

First why a dividend re-investment plan ?

The SNOWBALL’s current plan is to earn income of around 1k a month for re-investment. The current year’s income is ahead of plan, so we look forward to consolidating next year’s income.

I am going to buy today 10k of Supermarket Reit, SUPR yielding 7.3% and

10k of Real Estate Credit RECI, yielding 10.3%.

That should earn income for the SNOWBALL of £1,760.00 next year and £880 this year.