VWRP

LWDB

Brunner

Alliance Witan

Merchants Trust

City of London

Remember a dividend re-investment plan loves falling markets because as you re-invest your dividends, you get more shares for your hard earned and as prices fall yields rise.

Now most financial advisers, advice to concentrate on the dog and maybe use the 4% rule for income and ignore the tail.

From the article below.

The Capital Required at Three Yield Levels

If you need $80,000 per year in investment income, the capital required depends entirely on the yield you can sustainably generate.

• Conservative tier (3% to 4% yield): Roughly $2,286,000. This range covers dividend growth stocks and broad equity funds. You are barely clearing risk-free government bonds while accepting equity volatility. The upside: dividend growth compounds over time, and principal is most likely to appreciate.
• Moderate tier (5% to 7% yield): Roughly $1,333,000. This range includes midstream MLPs, preferred shares, high-dividend equities, and select consumer staples names. Income is meaningful, but dividend growth tends to slow.
• Aggressive tier (10% to 14% yield): Roughly $667,000. This range covers leveraged covered call funds, certain mortgage REITs, and distressed credit vehicles. Principal erosion is common, distributions get cut in stress cycles, and the portfolio may shrink even while paying income.

The 8% tier requires exactly $1,000,000 to generate $80,000 annually. That is a number many retirement savers can reach. The real question is whether the holdings at that yield are durable.

If your plan is to have a TR portfolio of 1 million and you are on plan, read no further. If you expect to have a modest retirement pot, read on.

The SNOWBALL majors on re-investing the dividends to earn more dividends. The capital cannot be spent as it would reduce you dividend income, unless there is an unplanned family disaster. The best thing about compound income is it takes a few years to accelerate, so if your investment pot is modest that’s a plus, especially if you can add when possible.

The income for the SNOWBALL will meet the 2033 target and for the year 2027 it will try to match the target but the fcast is for income of 13k meeting the 2032 fcast.

That will be a yield of 13% on seed capital but now that compound interest really starts to accelerate the yield will be 26% before the next ten year period ends.

5 Cheap Dividends Up to 11%: Bargain Buys or Damaged Goods?

Brett Owens, Chief Investment Strategist
Updated: November 6, 2026

Whenever I see a stock, a dividend payer, that looks attractive but is a dog, OC’s voice jumps in my head: “Hey, it’s cheap for a reason!”

Let’s look at five overlooked payers yielding 5.6%-11% at prices any penny-pincher would love.

Take Comcast (CMCSA, 5.6% dividend yield), for example.

It owns NBC, Telemundo, Peacock, Sky Sports and theme parks around the world, plus a connectivity business (largely Xfinity) that sells broadband, wireless and cable TV.

It’s an extremely well-known consumer name, but it hasn’t warranted our attention until recently. A multiyear funk has sent CMCSA shares to a thin forward price-to-earnings (P/E) ratio of just under 7.

It also sent Comcast’s yield above 5% for the first time earlier this year, and it remains there today.

Comcast has been taking shots from all sides. It has struggled to retain broadband subscribers amid competitors peddling cheap high-speed fiber and 5G home internet; accelerating cord-cutting, which has hit both its pay-TV and advertising businesses; and decelerating Universal theme-park growth.

The company is answering with a massive unloading spree. It already spun off its cable channels into Versant Media Group (VSNT) and sold its Sky Deutschland operations earlier this year. It plans to spin off the NBCUniversal and broader Sky business in 2027. And Comcast is laying off workers as part of a broader restructuring that CMCSA warned would result in a roughly $1 billion charge in Q4.

CMCSA has raised its quarterly payout at least once a year since 2008 … until this year. All four dividends have been announced, and they’re all the same amount as last year’s final distribution.

But the dividend isn’t necessarily in trouble. For one, it only accounts for a little less than 40% of this year’s projected earnings. And also, while the company has suspended stock buybacks for the time being, management has said it’s still committed to the dividend.

The real question is whether there will be enough growth potential left once Comcast is done shedding assets.

High oil prices have translated into few discounts across the energy sector, but Northern Oil & Gas (NOG, 7.9% dividend yield) is trading below 6 times earnings estimates, all while paying us a high-single-digit yield.

Northern Oil deals in oil and natural gas across the Williston, Uinta, Permian, Appalachian and Duvernay formations. But while it’s technically an exploration-and-production (E&P) firm, it’s not an operator. Instead, it holds interests in thousands of wells, then partners with other E&P operators to work them.

That makes NOG less of a growth play on oil, and more a cash-flow play.

Northern Oil & Gas started paying us 3 cents per share quarterly in 2021, then dramatically ramped up the distribution, hiking every quarter for a few years before slowing to semiannually, then eventually stopping its raises altogether.

But NOG still pays one of the highest yields we can find among non-infrastructure energy stocks, and cash is no issue. Not only is coverage still plenty safe at a little more than 40% of this year’s earnings estimates, but NOG also authorized a $150 million increase to its buyback program in July.

This is ultimately a play on oil prices and little else, but it can still deliver some pop from depressed prices. NOG shares have put up a total return of almost 25% since my July article, and improving estimates have it trading at roughly the same valuation as before.

I’ve been warning about Flowers Foods (FLO, 7.1% dividend yield) for a long time. In May, the bread baker finally hacked its dividend nearly in half, to 12.5 cents per quarter.

It’s a critical reset—and given that Flowers still yields more than 7% even after the hack, it’s worth revisiting this consumer staples play to see whether the worst is over.

Flowers is a carbohydrate king, selling bread (Wonder, Sunbeam, Nature’s Own, Dave’s Killer Bread, among others) and snacks (Tastykake, Mrs. Freshley’s and more).

FLO has struggled mightily with high input costs and a generational shift away from sugary and otherwise unhealthy snacks. While revenues have actually climbed every year since 2022, profits have plunged by about 60% in that time—and the bottom-line hemorrhaging is expected to continue through the rest of this year and next. Flowers has lost three-quarters of its value since late 2022, and the stock now trades at a dirt-cheap 9.2 times earnings estimates.

Flowers’ answer to its issues is a pivot toward “better-for-you” brands. It bought Simple Mills (trail bars, baking mixes, crackers and healthier snacks) for $795 million last year. In August, the company reportedly was seeking a buyer for Tastykake. Unloading that brand, combined with the shearing of its dividend, would give FLO more deal ammunition and give it some room to cut into its debt.

But while Flowers is on better financial ground, the core business continues to teeter. Higher prices have softened demand for its premium Dave’s Killer Bread, and the relaunch of the Nature’s Own brand hasn’t done anything to shore up sales. FLO might look toward M&A for a spark, but any real recovery will almost certainly require improvement in the bread basket.

The Federal Reserve’s interest-rate turnabout sent real estate investment trusts (REITs) into freefall for a few weeks. The sector is finally getting up off the mat, but several are still trading on the cheap.

Douglas Emmett (DEI, 7.1% dividend yield) is a niche office-and-apartment operator whose geographical footprint is limited to Los Angeles and Honolulu. That’s it. All 18.2 million square feet of office space, as well as 4,410 apartments (plus another thousand or so in development), are contained within a pair of cities. That’s a critical lack of diversification.

Those two property types are imbalanced, too. Office tenants account for almost 80% of rent, which is largely why Douglas Emmett was among the worst REITs both during the COVID bear market and following it—and why DEI had to slice its dividend by nearly a third in 2022.

But DEI still has a few noteworthy qualities. It’s pretty well-rounded by industry—legal, financial services, real estate, health, entertainment and more—with no segment making up more than 20% of the tenant mix. Its tenants are also small and mostly local; 96% of its office leases are under 20,000 square feet. Local laws obstruct the building of new office towers near most of their locations. And the company’s leases bake in 3%-5% annual rent increase.

And it’s cheap, too. Right now, DEI trades at less than 7 times expectations for next year’s funds from operations (FFO). Throw in a yield just over 7% that’s extremely well covered at only around half of FFO estimates, and there’s a lot to like about Douglas Emmett in a favorable environment.

We’re just not in that environment yet. California has suffered from a corporate drain to other states, and one of Los Angeles’ bread-and-butter industries—entertainment—has suffered significant headwinds of late, too. That’s reflected in a poor occupancy of around 77%, which is 11 points less than the office-REIT industry average.

Commercial REIT Global Net Lease (GNL, 11.0% dividend yield) has crashed this fall. Earlier this summer, it traded at an 8% yield. Now it’s at 11%.

Global Net Lease’s name refers to its net-lease contracts, which are “net” of taxes, insurance and maintenance costs. GNL collects the rent; nothing more. And the lion’s share of those contracts (87%) have rent increases built in.

Its portfolio of nearly 800 properties covers 40 million square feet. Industrial and distribution real estate makes up almost half of straight-line rents, with the rest split almost evenly between office and retail. GNL is also more geographically diversified than most REITs, with three-quarters of straight-line rents coming from the U.S. and Canada, and the remainder from Europe.

Global Net Lease is moving that mix further away from offices, most notably with the $535 million, all-stock acquisition of Modiv Industrial announced in May.

This is a REIT that has been improving just about every aspect of its business over the past couple years, including shedding some debt, upping occupancy and percentage of investment-grade tenants, reducing expenses and getting rid of suboptimal properties. But it’s still dogged by extremely high leverage and some looming refinancings that look even worse in the wake of the Fed’s recent rate hike.

That puts the dividend in serious question. Even after raising full-year AFFO guidance to 82-85 cents, GNL pays out roughly 90% of it—not great considering a still-heavy debt load and higher debt expenses on the horizon.

My Retirement Income Plan for 2027

Our dividend targets for 2027 should be capable of generating so much annual income that, by the time we retire, we’ll never have to sell a single share.

But that won’t happen by owning stocks with a history of cutting bait on their dividends every time they face a financial hurdle.

Fortunately, that’s not a concern for the investments in my “No Withdrawal” portfolio.

The “No Withdrawal” portfolio solves the retirement-savings shortfall that literally millions of Americans face today.

Before COVID, I remember the talking heads on CNBC and Fox Business telling us we needed to have at least $1 million saved if we wanted to retire comfortably. When inflation kicked into high gear, that number did, too—it became $1.25 million, then $1.5 million. This year, I’ve seen numerous headlines asking whether $2 million is enough to retire!

But here on planet Earth, the average 55- to 64-year-old has just more than $500,000 socked away!

What will that half-million get you?

• If you invest that $500,000 in a traditional 60/40 portfolio, you’ll earn $26,900 a year. That’s just above the poverty line.
• If you invest that $500,000 in my 8% “No Withdrawal” Retirement Portfolio, you’ll earn an annual income of 8%, 9% or even 10%+. That means you could bank $40,000 to $50,000 (and potentially more) each year!

An 8% yield sits in a sweet spot: high enough to generate real income on a realistic capital base, low enough that underlying holdings can run legitimate businesses without financial engineering propping up every distribution. The question is whether you…

By Drew Wood

Published April 20, 2026

An 8% yield sits in a sweet spot: high enough to generate real income on a realistic capital base, low enough that underlying holdings can run legitimate businesses without financial engineering propping up every distribution. The question is whether you can build a portfolio at that yield without distributions getting cut and principal eroding.

The short answer is yes, but the portfolio looks different from typical income-focused content. The portfolio centers on midstream pipelines, a battle-tested business development company, and a consumer staples company that has raised its dividend for more than five decades.

The Capital Required at Three Yield Levels

If you need $80,000 per year in investment income, the capital required depends entirely on the yield you can sustainably generate.

• Conservative tier (3% to 4% yield): Roughly $2,286,000. This range covers dividend growth stocks and broad equity funds. You are barely clearing risk-free government bonds while accepting equity volatility. The upside: dividend growth compounds over time, and principal is most likely to appreciate.
• Moderate tier (5% to 7% yield): Roughly $1,333,000. This range includes midstream MLPs, preferred shares, high-dividend equities, and select consumer staples names. Income is meaningful, but dividend growth tends to slow.
• Aggressive tier (10% to 14% yield): Roughly $667,000. This range covers leveraged covered call funds, certain mortgage REITs, and distressed credit vehicles. Principal erosion is common, distributions get cut in stress cycles, and the portfolio may shrink even while paying income.

The 8% tier requires exactly $1,000,000 to generate $80,000 annually. That is a number many retirement savers can reach. The real question is whether the holdings at that yield are durable.

What an 8% Portfolio Actually Holds

Ares Capital Corporation (NASDAQ:ARCC | ARCC Price Prediction) is the largest publicly traded business development company in the U.S. It lends primarily to middle-market companies, with 80% of its $29.48 billion portfolio in first lien senior secured loans. First lien lenders get paid before everyone else in a default. The non-accrual rate sits at 1.8%, meaning less than 2% of loans are not generating interest payments. The current yield runs near 10.6%, and the quarterly dividend has held at $0.48 per share through the most recent quarter. Core EPS of $0.50 covers that distribution. Ares Capital is the most institutionally credible name in its category, with 12 analyst buy or strong buy ratings and zero sells.

Energy Transfer LP (NYSE:ET) operates one of the largest midstream pipeline networks in North America. The fee-based model means cash flow does not move much with commodity prices. The annualized distribution of $1.34 per unit represents a 3%+ increase year over year. At a recent price near $19, the yield runs close to 6.9%. The company guides for $17.45 to $17.85 billion in adjusted EBITDA for 2026, which provides substantial coverage for the distribution.

Western Midstream Partners LP (NYSE:WES) offers a sharper yield within the same midstream category. The current quarterly distribution of $0.91 per unit annualizes to $3.64, and the company has guided a planned Q1 2026 increase to $0.93 per unit. The yield runs near 8.8%. Distributable cash flow guidance for 2026 of $1.85 to $2.05 billion implies solid coverage at the current distribution level.

Altria Group (NYSE:MO) is the tobacco name income investors have debated for decades. Altria has raised its dividend 60 times in 56 years, with a 3.9% increase in 2025. The current quarterly payout of $1.06 per share annualizes to $4.24. At a recent share price near $67, the yield runs near 6.2%. Altria targets mid-single digit annual dividend per share growth through 2028, which means the income stream is designed to expand.

Why the Middle Tier Often Wins Over Time

Chasing the highest current yield frequently produces the worst long-term income. A 12% yield with no distribution growth delivers the same nominal dollars in year ten as in year one. Inflation erodes its purchasing power. A 6% yield that grows 5% annually doubles the income stream in roughly 14 years, and the underlying asset likely appreciates alongside it.

Altria’s dividend history illustrates this. The quarterly payout has grown from $0.48 in early 2000 to $1.06 today. An investor who bought in 2000 and held is collecting a yield-on-cost that dwarfs anything available from a static high-yield instrument purchased at the same time.

The 8% tier blends names with genuine distribution growth (Altria, Energy Transfer) alongside a higher-current-yield anchor (Ares Capital, Western Midstream). The portfolio collects cash flows from fee-based infrastructure, secured lending, and a consumer staples business with pricing power.

Three Things Worth Doing Before Building This Portfolio

1. Calculate your actual annual spending, not your salary. Most people need to replace 70% to 80% of pre-retirement income. If your actual spending is $65,000 rather than $80,000, the capital required at 8% drops to around $812,000.
2. Model the tax treatment of each holding separately. MLPs like Energy Transfer and Western Midstream generate K-1 forms and often return capital distributions that defer taxes. Ares Capital income is typically taxed as ordinary income. Altria dividends qualify for the lower qualified dividend rate. The after-tax yield profile differs meaningfully from the gross yield.
3. Compare the 10-year total return of an 8% portfolio against a 12% high-yield alternative. The 10-year price performance of Ares Capital is up roughly 210% on a price basis alone, before distributions. A leveraged covered call fund paying 12% with flat or declining NAV would show a very different picture.

Here’s how I’m aiming for a £4,106 passive income from a boring FTSE 100 dividend stock

Story by Ken Hall

07 Nov

• Dividend Potential: Lloyds offers a 4.18% dividend yield, with dividends per share projected to rise 42% by 2028, potentially turning a £30,000 investment into £102,483 over 30 years with reinvested dividends.
• Strong Financials: Q3 2026 results show £6.6bn pre-tax profits, 17.9% return on tangible equity, and a solid CET1 ratio of 13.3%, supporting dividends and share buybacks.
• Undervalued Opportunity: Analysts forecast EPS of 13.7p by 2028, implying a potential 15% upside from the current share price, making Lloyds attractive for long-term income and growth investors.

Here’s how I’m aiming for a £4,106 passive income from a boring FTSE 100 dividend stock

I’m a big believer that passive income is the secret to financial freedom. Building a diversified portfolio of high-quality income stocks can generate a steady second income and make your money work harder for you.

Clearly, the starting point has to be finding companies with a high dividend yield. Growing profits and strong, consistent cash generation are also great attributes to look for.

Of course, buying an undervalued stock would be a bonus to help to boost long-term returns.

What am I watching today?

Lloyds (LSE: LLOY) is one boring FTSE 100 stock that I like at the moment. The company’s Q3 2026 results released on 29 October showed a 42% increase in statutory pre-tax profits to £6.6bn for the first nine months of the year, while return on tangible equity jumped to an impressive 17.9%.

The bank generated £11.1bn in underlying net interest income, up 10% year on year at a healthy margin of 3.21%. Management remains on track to deliver its full-year targets, including net interest income exceeding £14.9bn and a cost-to-income ratio below 50%.

Meanwhile, its Common Equity Tier 1 (CET1) capital ratio stood at 13.3% at the end of September, providing a solid capital buffer and supporting shareholder returns through dividends and share buybacks.

What about the dividend income?

Of course, Lloyds isn’t without risks. A prolonged economic downturn could trigger rising loan defaults, while falling interest rates could squeeze lending margins and weigh on profitability. Nonetheless, analysts remain optimistic with consensus estimates forecasting earnings per share (EPS) tipped to climb from 9.9p in 2026 to 13.7p by 2028.

Meanwhile, dividends per share are forecast to rise 42%, from 4.31p to 6.12p over the same period. With a projected earnings payout ratio of around 45% in 2028, those distributions appear well supported by profits.

So what could a further £30,000 investment deliver? At today’s (6 November) 4.18% dividend yield, I’d initially receive £1,254 annually. Based on the current 95.9p share price and analysts’ dividend forecasts, that could increase to around £1,914 by 2028, even without reinvesting a penny.

Looking further ahead, reinvesting dividends at an average 4.18% annual yield over 30 years could grow a further £30,000 investment today to around £102,483. That’s £72,483 in accumulated dividend returns, excluding any share price appreciation.

The enlarged investment could then generate around £4,284 in annual passive income, assuming the same yield.

Of course, neither earnings growth nor dividends are guaranteed. But I think Lloyds’ improving profitability and potential for growing shareholder distributions make it an attractive long-term income candidate.

Is Lloyds undervalued?

I also think Lloyds’ shares look attractively priced against their future earnings potential. Using analysts’ forecasts of 13.7p in earnings per share by 2028, I’ve calculated a potential fair value based on a price-to-earnings (P/E) ratio of 10 — broadly in line with Lloyds’ average valuation over the past three years.

That implies a future share price of 137p. Discounting this back to today’s money at an annual rate of 10% gives me a fair value of around 113p. Against the current 95.9p share price, this suggests the stock could be around 15% undervalued.

Of course, this depends on the bank meeting analysts’ earnings forecasts and maintaining its valuation multiple. A weaker UK economy or rising loan defaults could derail those expectations, as could changes to bank profit taxes.

Still, with a dividend yield of 4.18% alongside potential capital gains, I think Lloyds is just one stock worth considering for long-term income and growth investors.

When Congress Changes Hands, Will Dividend Investors Have the Advantage? Political changes in Washington can have a major impact on the stock market. When a new political party gains control of Congress, investors often begin wondering what comes next.   •Will taxes increase? •Will regulations change? •Which industries could benefit, and which ones might struggle? These questions can create uncertainty, especially for investors who own companies heavily dependent on government policies or favorable economic conditions. But there’s another way to approach this uncertainty: dividend investing. One of the biggest advantages of owning quality dividend-paying companies is that their long-term success doesn’t necessarily depend on which political party controls Washington. Think about it. Elections happen every few years. Tax policies change, regulations evolve, and government priorities shift.  But established businesses still need to serve customers, generate cash flow and remain profitable. Companies with durable business models, manageable debt and a history of increasing their dividends may be better positioned to navigate these changing environments. That’s an important distinction compared to investing primarily for growth. Growth investors often depend heavily on expectations for future earnings and stock price appreciation. If a new Congress introduces policies that hurt a particular industry, or uncertainty causes investors to reassess future growth, those stocks could experience significant volatility. Dividend investors can face those same market declines, but they have another potential source of return: cash distributions from the companies they own. Even if stock prices struggle while investors wait for the political and economic picture to become clearer, quality dividend payers may continue rewarding shareholders. There’s also an advantage when uncertainty creates buying opportunities. If a financially sound dividend-paying company experiences a temporary decline because of political concerns, investors who believe in its long-term business prospects may be able to purchase shares at more attractive prices.  If the dividend remains intact and continues growing, those purchases could contribute to a larger income stream over time. Of course, dividend stocks aren’t immune to political changes. Certain industries can be heavily affected by taxes, regulations and government spending. Dividends can also be reduced or eliminated, which makes financial strength and business quality especially important. The point isn’t to predict which political party will produce the best stock market returns. It’s to build a portfolio that doesn’t require Washington to get everything right. Political control will change. Economic policies will change. Market leadership will change, too. But owning quality companies that consistently generate cash and increase their dividends can provide a foundation for building wealth through all of it. — Nate Tucci P.S. KEY is another example of the core ideas behind the Dividends Forever Portfolio: owning quality companies with established dividend payouts, the potential for future income growth and the opportunity to build long-term wealth through both dividends and capital appreciation.

Renewable energy infrastructure trusts provide attractive income and defensive potential.

David Brenchley

Updated 09 Oct 2026

Disclaimer

Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by Greencoat UK Wind (UKW). The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

In the classic novel Don Quixote by Miguel de Cervantes, the eponymous hero mistakes a row of spinning windmills for fierce giants, riding at them on his horse with a lance and trying to fight them. It’s where we get the idiom ‘tilting at windmills’, in this case meaning attempting to fight imaginary enemies.

Today, we see a similarly misguided mission being undertaken by climate change sceptics: railing against not only wind farms but other forms of renewable energy, too. Despite their objections, renewables are undoubtedly going to be an important part of the UK’s energy mixture for decades to come, in our view.

We agree, of course, that declaring all-out war on fossil fuels is unhelpful, as other dirtier kinds of energy and technologies are undoubtedly going to be needed to smooth out the transition to a low-carbon economy.

Yet, the stigmatising of renewables is equally unhelpful. Sure, the UK has plenty of untapped oil and gas potential, but so does it have lots of wind and, somewhat surprisingly in recent years, sun. The cost of renewable energy generation has also come down significantly over the years, meaning it is the cheapest form of energy generation in some locations.

The sceptics have mistaken wind turbines, solar farms and the like for the enemy, but the truth is they will all need to be used in the future. In our view, this should mean that there is a strong case long term case for the investment returns from renewable energy infrastructure investment trusts.

Why invest in renewables infrastructure?

As advances in technology and regulatory changes have helped to usher in an era of green energy usage over the past decade or so, we’ve seen a steady increase in interest in renewable energy investment.

We think that this is only going to continue and there are a number of reasons why investors should consider allocating to renewables.

Inelastic demand

Renewable infrastructure is ultimately about selling energy, demand for which is less sensitive to changes in price or the state of the wider economy.

In other words, the price of energy can rise substantially without a commensurate drop off in demand. Similarly, even if there is an economic downturn, demand for energy is unlikely to subside dramatically.

In the last few years, the demand for electricity has been boosted by two big structural themes that we think will continue to run for many years. Firstly, fossil fuel-powered cars are seeing significant competition from electric vehicles. Secondly, the rise of AI and data centres, together a huge source of energy demand, has seen huge demands placed on grids worldwide.

This structural increase in demand means that renewables can arguably provide defensiveness to an investor’s portfolio. Although the price of energy can fluctuate, the end investor can say with a level of certainty that demand for that energy is not going to subside substantially.

Strong and stable cash generation

Renewable assets tend to be highly cash generative. Although, as noted, the price of energy is hard to predict and can fluctuate, the point remains that there are comparatively low levels of volatility in renewable infrastructure’s cash flows.

Not only is a proportion of revenues typically made up of inflation-linked subsidies, but managers of trusts can sell forward electricity production to reduce volatility.

Beyond the fact that this can make the sector more attractive to income investors, for the actual direct investor in the infrastructure, it often means that the leverage used to finance transactions can be acquired at more attractive rates than in other sectors.

Long-term investment

Renewable energy infrastructure assets typically have long economic lives. They are usually capital intensive to set up, but once that is done, there are typically low operating costs, especially compared to hydrocarbons.

Again, this provides a degree of certainty to investors. They know that a given infrastructure asset has a certain useful life, over which time it can generate a fairly predictable amount of energy. This makes forecasting cash flows simpler than it would be compared to other asset classes.

Inflation-linked cash flows

Energy is a significant component that feeds into the inflation calculation. Rising prices boost the revenues of producers, and although this can eventually be counteracted by falling demand, demand is relatively inelastic. As such there is a natural inflation-hedging element to an investment in energy producers.

Additionally, many renewable energy providers have contracts that contain direct inflation linkage. This means that if inflation does rise, a proportion of renewable energy infrastructure operators’ cashflows increase in line with it. On the other hand, some renewable energy trusts fix the prices they receive for the energy they produce, so these revenues won’t rise along with wholesale energy prices.

The result is that the income renewable energy infrastructure assets produce can be resilient in the face of inflation. A bit of research into each renewable energy infrastructure trust is necessary to understand its individual circumstances.

Low correlation with other asset classes

Renewables energy infrastructure performance has historically had a low correlation with traditional assets. In fact, over the 10 years to 30/09/2026, the average renewable energy infrastructure trust had the joint-third lowest correlation of any sector to the Vanguard FTSE All-World UCITS ETF, in share price total return terms, according to the data provider FE fundinfo.

That is partly due to the stability of the cashflows, which such investments produce. Another factor is that capital valuations are appraisal-based, like private equity. This can ‘smooth’ out returns.

The result is that renewable energy infrastructure assets might offer diversification benefits to investors.

How difficult is it to invest in renewable energy infrastructure?

Investing in renewable energy infrastructure directly is effectively off limits for individual investors and wealth managers.

Fundamentally, this is due to cost. As a private investor or wealth manager, such investors simply don’t have the huge sums – potentially hundreds of millions of pounds – needed to make a direct investment in institutional quality infrastructure assets.

Even if this were possible, then this is a specialist asset class, which requires time and expertise to manage what is more akin to a company than a ‘normal’ fund management business, investing in traditional equity or bond portfolios.

It’s for this reason that investors tend to either invest in the shares of renewable energy companies that provide a level of indirect exposure to the sector or in different types of funds that invest in the sector directly.

Why invest in renewable energy infrastructure with investment trusts?

Investment trusts offer an easy and affordable way for investors to access the diversification benefits that investing in renewable energy infrastructure brings.

The ability to use gearing is important for renewables trusts and many of them utilise this structurally; as is the ability to hold back up to 15% of the income they receive in any one year to help smooth dividend payments if there is any unexpected drop-off in income.

The investment trusts housed within the renewable energy infrastructure sector are diverse beasts. Some offer exposure to specific technologies – wind or solar, say – while others invest across the whole gamut; some focus solely on one country or region – like the UK, US or Europe – while others invest globally.

These trusts are structured as investment companies that are listed on the London Stock Exchange, meaning it’s easy for investors small and large to buy their shares. The permanent capital structure of closed-ended funds provides liquid exposure to an inherently illiquid asset class.

In addition, all these trusts can currently be bought at a discount to the underlying value of their net assets, providing a potentially attractive entry point.

Case study: Greencoat UK Wind (UKW)

Launched: 2013

Manager: Schroders Greencoat

Ongoing charges: 0.83% (as of 31/12/2025)

Investment policy: The Company’s aim is to provide investors with an annual dividend that increases with CPI inflation while preserving the capital value of its investment portfolio in the long term on a real basis through reinvestment of excess cash flow. The substantial majority of the investment portfolio will be operating UK wind farms. The Company intends to maintain a balanced exposure to power prices. Aggregate Group Debt will not exceed 40% of GAV at drawdown.

Benchmark Index: UKW does not measure performance against a given benchmark.

Greencoat UK Wind (UKW) invests in a portfolio of wind farms operating around the UK, both onshore and offshore. The revenue that it generates helps it to provide shareholders with an annual dividend that increases with consumer price inflation annually.

UKW also aims to preserve the capital value of its investment portfolio in the long run, on a real basis. It does this through reinvestment of excess cash flow.

UKW was the trailblazer of the renewable energy infrastructure sector and remains the largest and most liquid fund in its peer group. Its net asset value (NAV) is almost £3bn and its gross asset value (GAV) is just under £5bn.

UKW is managed by Matt Ridley and Stephen Packwood at Schroders Greencoat, both of whom have more than two decades of experience in the renewables sector.

From its IPO in 2013 to 30/06/2026, UKW delivered an annualised NAV total return of 8.6% and an annualised share price total return of 6.3%.

1) What is the investment trust’s goal?

UKW’s goal is to provide investors with an annual dividend that increases with CPI inflation while preserving the capital value of its investment portfolio, which consists of a portfolio of operating UK wind farms.

2) Are investment decisions driven by a particular investment style?

UKW’s success has, in large part, been down to the simplicity of its investment proposition. The trust focuses very specifically on the higher financial returns provided by wind farms relative to other renewable assets.

Traditionally, UKW has maintained around 50% of its lifetime revenues as fixed per unit of energy produced and around 50% variable, on an NPV basis. The fixed revenues are either from subsidies, in the form of Renewable Obligation Certificates or contracts for difference, short-term hedges or via direct sales to corporates.

The variable revenues are through selling electricity to the grid, with most of UKW’s power sold at prevailing day-ahead prices under route to market Power Purchase Agreements (PPAs), typically with large utilities. This means that when the price spikes, like it has this year as a result of the ongoing US-Iran war, UKW should make more money.

3) How many wind farms does the investment trust typically hold?

UKW’s portfolio currently consists of 49 wind farms, of which around 57% by value is onshore and 43% is offshore. All its wind farms are located in the UK and Northern Ireland and the portfolio currently has a weighted average expected remaining life of 9.5 years (as at 31/03/2026).

Offshore wind projects tend to be bigger in terms of unit size, which means that they are over-represented in UKW’s top 10 investments.

4) What is the investment trust’s dividend policy?

UKW aims to provide shareholders with an annual dividend that increases with CPI inflation. In fact, UKW is the only one of its peers to have an explicit link between its dividend and inflation. Hence, the historic dividend serves as one important yardstick of whether the trust has achieved its aims.

UKW has increased its dividend each year from an annualised 6p per share at IPO in 2013 to 10.35p paid last year and a dividend target for 2026 of 10.7p. This is equivalent to a yield of c. 9.6% at the share price at the time of writing on 07/10/2026.

UKW has exhibited strong dividend cover historically, having averaged 1.7x since launch. Dividend cover for the first half of 2026 was 1.9x and the trust believes that over the next five years it will achieve an average dividend cover of 1.8x.

5) What are the investment trust’s ongoing charges?

The stated ongoing charges figure was 0.83% on 31/12/2025. UKW was the first of the renewable peer group to move its fees to be 100% based off the lower of market capitalisation or NAV, ensuring even greater alignment with shareholders. Given its scale and market-leading fee basis, UKW has the lowest OCF in the sector.

The management fee structure comprises 1% on market capitalisation (MC), with a further 0.2% paid in equity (new shares issued at NAV or bought in the market and awarded at NAV) for MC below £500m. The fee declines to 0.9% (and an equity fee of 0.1%) on MC over £500m, 0.8% (no equity fee) over £1bn of MC, and 0.7% over £3bn.

6) Does the investment trust have performance fees?

No, there are no performance or acquisition fees.

7) Does the investment trust use gearing and if so is it structural or opportunity-led?

UKW has consistently employed structural gearing over its life, essentially benefitting from the relatively low cost of borrowings compared to the returns it is able to invest in wind farms at.

The board has a self-imposed medium-term maximum target of 40% of GAV, or 65% of NAV. As at 31/03/2026, group aggregate debt was £2.1bn, which is 41.7% of GAV, or c. 70% of NAV. While this means UKW is currently above its internal gearing limit, this has no impact on the operations of the trust and UKW still has the ability to use excess cash generation to fund growth or repay debt over time to bring borrowings below the 40% threshold.

All data as at 30/06/2026 unless specified otherwise.

A further step in growth plans
The acquisitions include two direct transactions with Sainsbury’s: seven
convenience stores for £19m (6.2% NIY) on new 15-year inflation-linked leases,
and a £47m distribution centre in Darlington (8.0% NIY), leased to Sainsbury’s
and sublet to Argos. SUPR is acquiring a 50% interest (£23.5m) in the warehouse
through its Blue Owl joint venture (JV). The lease has 10 years remaining, and
SUPR will receive a 0.6% management fee on its JV partner’s share. Other
investments comprise a £14.2m Waitrose-anchored scheme in Woking, a £5m
Sainsbury’s store in Essex, a £1.1m Tesco store in Surrey and a Lidl pre-let
development contribution of up to £2.5m. The expired Waitrose lease offers scope for renewal.
The £60m issue follows July’s £100m raise, deployed with borrowing into £222m of acquisitions within six weeks. The 73.2m new shares (5.4% of existing capital)
were allocated through institutional and South African placings and a UK
RetailBook offer. SUPR says allocations respected pre-emption principles where
possible.
The issue proceeds will substantially fund the targetted acquisitions, requiring only modest additional borrowing.

We estimate a pro-forma loan-to-value (LTV) of less = than 45% (43.9% at June 2026), with net debt/EBITDA of 7–8x. Although above the normal upper LTV target of 40%, management considers this appropriate at the current stage of the property cycle. A £445m refinancing in July reduced the average cost of debt to 4.4%, predominantly fixed or hedged, and extended average maturity to 3.8 years.

The latest acquisitions are another step towards SUPR’s ambition to at least double its portfolio to £4bn or more supported by an actionable acquisition pipeline exceeding £500m highlighted at the September FY26 results.