You may have missed your window on this infrastructure trust’s share price.

As the discount narrows to a fairer price, the potential upside has dwindled

Markuz Jaffe

Questor is The Telegraph’s stock-picking column, helping you decode the markets and offering insights on where to invest.

Investors after stable, inflation-linked returns backed by high quality counterparties could do worse than infrastructure. Sub-sectors of the asset class span social infrastructure, such as hospitals and schools, and more economically sensitive investments, such as power generation and transport.

More recently, the significant expansion in digital infrastructure, including data centres, towers and fibre, has captured headlines, driven by the explosion in data consumption globally.

One such access point is Pantheon Infrastructure (PINT), launched in late 2021 with the aim of offering a globally diversified portfolio of high-quality infrastructure assets, co-investing alongside leading private equity houses via individual deals selected by PINT’s manager. Since launch, the company has committed over £500m of investor capital across 13 investments.

PINT’s investment manager, Pantheon, has over 40 years of private markets investing experience, a global investment team and $71bn in discretionary assets under management across real assets, private equity and private credit, as at end-September 2024. This includes $23bn across over 230 private infrastructure investments, of which $4.5bn is invested across 56 private infrastructure co-investments – a significant resource benefitting PINT, despite the trust’s own modest size.

The portfolio is well diversified by sector, with almost half in digital infrastructure, a third in power and utilities and a quarter spread across renewables and energy efficiency, and transport and logistics.

It invests across Europe, North America and the UK, and enjoys a blend of revenue profiles – with the vast majority contracted, supported by almost a fifth in GDP-linked and regulated incomes. To further spread risk, the company makes use of an active currency hedging programme to help reduce portfolio valuation fluctuations due to FX movements.

PINT’s top investments by value highlight this diversification: Calpine, a principally gas-fired US independent power producer; Fudura, a Dutch provider of electricity infrastructure; Primafrio, a European temperature-controlled transportation and logistics firm; National Broadband Ireland, a network developer and operator for the nation; and National Gas, owner and operator of the UK’s sole gas transmission network.

Of these holdings, the most immediately attractive is Calpine, which is set to be bought by Constellation Energy Corporation (CEG). The deal, expected to complete later this year, will grant PINT a mix of CEG shares and cash, split 75pc and 25pc, respectively. While this has introduced some volatility into PINT’s portfolio valuation – the share price of CEG has ranged from a peak of around $350 to a low of $170 in 2025 alone – it also represents PINT’s first disposal, and a potentially significant exit from one of its top performing investments to date.

PINT targets a net asset value (Nav) total return of 8-10pc per annum, and declared dividends of 4.2p for FY24. Although dividend cover was relatively low for the year (0.7x), the manager expects this to improve as portfolio distributions continue to increase.

PINT’s method of accessing these deals via co-investing is a differentiator from peers and provides investors with a fee-efficient exposure to a basket of quality companies that stand to benefit from secular trends of digitisation, decarbonisation and deglobalisation. PINT itself charges a modest 1pc per annum management fee on the first £750m of net assets, with no performance or transaction fees. Additionally, the portfolio’s weighted average discount rate of 13.6pc as at end-December 2024 highlights the high level of return that the underlying businesses are expected to achieve based on their valuation modelling.

The company has a conservative balance sheet, with no debt drawn at the trust level. PINT’s £115m revolving credit facility provides liquidity but was undrawn at yearend and, combined with £24m in cash against outstanding investment commitments of £19m, marks a robust position for this strategy.

PINT’s board has been proactive in addressing the discount at which the shares trade relative to the published Nav, having allocated £18m to share buybacks, which have been used intermittently. The board has also recognised feedback from shareholders to recycle proceeds from realisations into new investment opportunities.

Since we last tipped PINT, the trust has benefited from a further share price recovery to trade at around 99p, representing a 16pc discount to published net asset value (or 18pc discount after accounting for estimated Calpine disposal uplift).

This has been supported by a strong period of fundamental performance across the portfolio, the potential for a material exit to complete and improving dividend cover from a maturing portfolio. However, we note that this re-rating has brought PINT’s discount to a level we see as fairly valued, limiting near-term upside potential.

Questor says: hold
Ticker: PINT
Share price: 99.4p

CT UK High Income Trust outperforms and hikes dividends again

• QuotedData
• Matthew Read

CT UK High Income Trust (CHI) has published its audited results for the year ended 31 March 2025, delivering another year of outperformance and a twelfth consecutive annual increase in distributions to shareholders. Over the financial year, the trust’s NAV total return was +13.5%, comfortably ahead of the FTSE All-Share Index’s +10.5% return. Share price total returns were even stronger, at +25.0% for ordinary shares and +24.0% for B shares, as market demand narrowed the discounts on both share classes.

No continuation vote required

Over the three-year performance measurement period (1 April 2022 to 31 March 2025), the trust delivered an NAV total return of +26.6%, outperforming the benchmark return of +23.3%. As this exceeded the board’s performance threshold, no continuation vote will be required at the 2025 AGM.

Income and dividends

The trust continues to focus on delivering a high and growing income. Total distributions rose by 3.0% to 5.79p per share, equating to a yield of 5.8% on the ordinary shares and 6.0% on the B shares at the year-end. A strong uplift in earnings (up 19.7%) enabled a transfer of £635,000 to the revenue reserve, which now stands at £2.9m – equivalent to 60% of the current annual dividend.

Portfolio activity and gearing

Manager David Moss highlighted successful stock selection as the main driver of outperformance, with strong contributions from NatWest, Rolls-Royce, Shell, and a re-rating in Hargreaves Lansdown following a private equity takeover. The trust also added holdings such as HSBC, Taylor Wimpey, and Breedon Group, while reducing exposure to Vistry and CRH.

Although structurally geared, leverage was tactically reduced in early 2025 amid growing macro volatility – particularly around the re-election of Donald Trump and his tariff agenda. As of year-end, £15m of the trust’s revolving credit facility had been drawn, with £9.5m held in cash.

Share issuance and discount management

Reflecting improved sentiment, the trust’s odinary shares ended the year at a 2.1% discount to NAV, while B shares traded at a 4.1% discount. The trust was one of the few in the sector to issue new shares, with 1m ordinary shares resold from treasury at a premium to NAV. Conversely, 250,000 B shares were bought back into treasury at a discount.

Outlook

Chairman Andrew Watkins struck a cautious but ultimately optimistic tone, noting ongoing challenges from high interest rates, UK fiscal policy, and geopolitical tensions. Nevertheless, he expressed confidence in the portfolio’s positioning and praised Moss’s ongoing stewardship. The manager remains focused on identifying undervalued UK equities with strong dividend-paying capacity, noting the potential for further income and capital growth in a still-overlooked domestic market.

[QD comment MR: This is a decent set of results from CT UK High Income Trust. While it has outperformed during the last financial year, these results confirm its outperformance over three years, which has allowed it to dispense with a continuation vote this year.

The NAV total return of 13.5% over the year looks solid given the uncertain macro backdrop and, with the UK equity market still trading at historically wide discounts to global peers, it, and its peers that are focused on UK equities, should be well-placed to benefit from any reappraisal of UK valuations. The ongoing bid activity in UK equities adds weight to the argument that investors who are avoiding the UK could miss out. In the meantime, twelve consecutive years of dividend increases, along with the rebuilding of the revenue reserve, provide some comfort to income-seeking investors amid a still-uncertain economic outlook.]

8th April 2025 11:32

by Sam Benstead from interactive investor

Central bank interest rate rises mean that investors can finally get a good return on their cash.

In the UK, the Bank of England base rate is now 4.5%. Interest rates peaked at 5.25% but are beginning to fall as inflation has dropped back near the central bank 2% target. Some economists think that UK interest rates could end 2025 at around 4%, but a lot will depend on inflation figures. 

Investors have a number of options. While they could buy UK government bonds (gilts), which yield between 4% and 5%, they could also stray into the corporate bond market, where yields are even higher. However, bond prices can be very volatile, and investors could be hit with capital losses even if the income is stable.

Savings accounts are another option, but yields tend to lag bond market equivalents. Moreover, unless the account is inside a cash ISA, where returns are lower, savers may have to pay tax on their returns.

Basic-rate taxpayers (up to £50,270 annual income) get a £1,000 tax-free savings allowance, while higher-rate taxpayers (up to £125,140 annual income) get £500 and additional rate taxpayers (earning more than £125,140) get nothing. Any savings interest above the thresholds is taxed at income tax rates.

Money market funds could fit the bill

Money market funds are a viable in-between option, offering the income similar to gilts maturing soon, but without the complexity, while also mitigating the risk of bond price fluctuations. They can be held inside ISAs and SIPPs.

They own a diversified basket of safe bonds that are due to mature soon, normally within just a couple of months, meaning that investors can earn an income on their cash with minimal risk. They can also put money into bank deposit accounts and take advantage of other “money market” instruments offered by financial institutions. 

On our platform, assets in money market funds have risen 1,100% (a 12-fold increase) in the past two years.  

Fund industry trade body the Investment Association (IA) categorises money market funds into two buckets: short-term and standard-term funds.

Short-term funds are lower risk. Fund managers try to ensure the highest possible level of safety by keeping very short duration bonds and high-quality bonds in the portfolio.

Standard money market funds generally deliver slightly higher returns by owning bonds that have slightly longer maturity dates. There are also less stringent liquidity requirements. 

Fund	Ongoing charges figure (%)	Yield (%)	Fund size (£million)
Royal London Short Term Money Market	0.1	4.53	7,489
L&G Cash Trust	0.15	4.5	3,251
Fidelity Cash	0.15	4.54	1,937
BlackRock Cash	0.2	4.54	973
Vanguard Sterling Short Term Money Market	0.12	4.93	1,400

Source: FE Analytics/ latest data published as of 8 April  2025. Past performance is not a guide to future performance.

Fund	Ongoing charges figure (%)	Yield (%)	Fund size (£million)
Premier Miton UK Money Market	0.26	4.4	330
Invesco Money (UK) No Trail	0.15	4.38	116
abrdn Sterling Money Market	0.15	4.7	835

Source: FE Analytics/ latest data published as of 8 April  2025. Past performance is not a guide to future performance.

Investors usually have a choice between an accumulation (acc) or income (inc) version of a fund, which determines whether income is automatically reinvested or paid out as cash. 

Dzmitry Lipski, head of funds research at interactive investor, says: “Royal London Short Term Money Market stands out most to us in the sector. It has an excellent long-term track record, low drawdowns and is competitively priced with a yearly ongoing charge of 0.10%.

“The fund seeks to maximise income by investing in high-quality, short-dated cash instruments. The managers place particular emphasis on the security of the counterparties it lends to, while ensuring daily liquidity.”

The interest paid by money market funds will fluctuate with bond market yields, which are closely linked to central bank interest rates. This means it will rise when yields rise, but fall when yields fall. As interest rates are expected to keep dropping this year and next, yields on money markets are also likely to drop. 

 Advantages of a money market fund

• Very low risk, with the portfolio likely to at least hold its value and also pay out a modest income
• Diversified, meaning investors are not exposed to a single bond failing and can withdraw their money easily
• Can be held in a tax-friendly wrapper, such as an ISA or SIPP.

Disadvantages of a money market fund

• Investments may fall in value, unlike savings accounts
• Not suitable for growing savings over the long term as inflation will eat into returns
• Sensitive to interest rate fluctuations, with lower rates leading to lower yields. Yields rise when interest rates rise
• The Bank of England warns that in times of market panic and a rush to cash, there may be liquidity issues in money market funds.

These 2 dividend stocks have yields above 10%! Could they deliver £2k of annual passive income?

Mark Hartley considers the potential benefits — and risks — of two high-yielding solar energy dividend stocks as part of a passive income portfolio.

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Mark Hartley

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.Read More

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services.

An extra £2,000 of tax-free passive income could make a nice addition to anybody’s year-end budget. That’s the beauty of investing via a Stocks and Shares ISA — no capital gains tax is levied on returns and we can add up £20k to the ISA annually.

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. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

But to secure £2k of annual income from a £20k ISA pot, an investor needs to achieve average returns of 10% per year. That’s a hard ask, considering the FTSE 100 has returned less than 7% on average since its creation. That said, the S&P 500 and the MSCI World index have returned approximately 10% a year.

Investing in one of these index trackers could deliver 10% gains a year — but shares would eventually need to be sold to enjoy the profits. A better way may be to invest in high-yielding dividend stocks. The dividends received could be reinvested to grow the pot, or withdrawn as income — without having to reduce any holdings. That’s true passive income!

I’ve identified two FTSE 250 solar energy investment trusts to consider that have a 10-year history of uninterrupted dividend growth. Not only that, their yields are currently above 10%.

But as ever, there are some concerns to consider. Let’s take a look.

Foresight Solar Fund

Foresight Solar Fund (LSE: FSFL) operates approximately 61 solar and battery storage assets with a combined capacity of around 1.1 gigawatts (GW). They’re primarily located in the UK, with some international exposure. It can allocate up to 10% of its gross asset value (GAV) to standalone energy storage systems, helping enhance grid stability.

In the past 12 months, its yield has fluctuated between 8% and 12%, with dividends increasing at a rate of 3% a year since 2015. This illustrates a strong dividend policy and dedication to shareholder returns.

However, past performance is no indication of future results, and high yields increase the risk of dividend cuts. Additionally, the fund is sensitive to fluctuations in electricity prices and interest rate changes, both of which could impact its revenue. 

Next Energy Solar Fund

Next Energy Solar Fund (LSE: NESF) is another investment trust specialising in utility-scale solar energy and energy storage assets. It owns 101 operational solar and energy storage assets worth £1bn, with a combined installed capacity of 934 megawatts (MW). The fund can invest up to 30% of its GAV in OECD countries outside the UK, adding to revenue diversification.

Its yield has ranged between 9.8% and 13.8% in the past 12 months, with dividends growing at a rate of 4.8% since 2015.

Like Foresight, changing electricity prices or interest rates could affect revenues — although long-term contracts and subsidies help to mitigate this risk. It also has quite a high debt gearing of 47.2%, which, while still within an acceptable range, could be risky if it increases.

Things to think about

While these yields are impressive, there’s no guarantee they would remain above 10%. The best approach would be to consider diversifying these stocks in a portfolio with a high-growth MSCI or S&P 500 index fund. This would make it more stable and less sensitive to interest rate changes.

Overall, it’s unlikely to achieve a consistent average return of 10% every year. A stable portfolio returning 7% to 8% is more realistic, which, if built up over time, could soon reach a level that pays £2k in annual dividends. And adding more to an ISA each year should mean that the income amount rises each year too.

Young mixed-race couple sat on the beach looking out over the sea© Provided by The Motley Fool

Passive income ideas come in all shapes and sizes. One I use myself, along with millions of other people, is buying shares I hope will pay me dividends in future.

As an approach, I reckon this has both pros and cons. Here are eight.

Pro: it’s genuinely passive

What I see as a massive pro is that as a passive income idea it really is passive.

I bought shares in BP — and now earn regular dividends from the oil major without ever lifting a finger.

Con: it takes capital…

Buying shares requires money, even though the amount can be little.

That can be seen as a con compared to some passive income ideas that require no capital. But I think the catch there, for me at least, is that an idea that requires zero financial capital is likely to require some human capital such as labour and/or time.

Pro: …it doesn’t take much capital

When I said above the amount can be little I meant it!

If you have enough to buy a coffee each day, you already have enough to start building up in a share-dealing account or Stocks and Shares ISA to earn passive income.

Pro and con: the income’s not guaranteed

Dividends are never guaranteed, even if a company has paid them before.

That can be a con, as when Shell shareholders in 2020 saw the dividend cut for the first time since the Second World War.

But it can also be a pro.

Con: it can take effort to find great shares

What sort of share could be a good choice for future passive income streams?

It can take some effort to find out. After all, a company can axe its juicy dividend suddenly (as Direct Line did a couple of years ago).

But taking time to dig into a share can also reveal a potential bargain that looks set to generate a lot of future income.

I bought Diageo shares because I know the alcoholic drinks market is huge and the firm’s brands, such as Johnnie Walker, give it pricing power that can translate into chunky free cash flows and dividends.

Pro and con: share prices matter too, not just dividends

Still, while I am upbeat about the demand outlook, there is a risk that fewer drinkers in younger generations will mean Diageo’s sales shrink.

That helps explain why the FTSE 100 firm’s share price has fallen 26% in five years.

But it points to the fact that, when buying shares for dividends, it is important to remember that they can later lose value.

On the other hand, an increasing share price could ultimately mean (if sold) extra passive income on top of any dividends.

The post pros and cons of buying shares as a passive income idea appeared first on The Motley Fool UK.

SDCL Efficiency Income Trust plc
(“SEIT” or the “Company”)

Change of Name and website address

The Company announces that, effective from 21 May 2025, it has changed its name to SDCL Efficiency Income Trust plc. Dealings under the new name will commence at 8.00 am (BST) on 29 May 2025. The Company’s stock market ticker, ISIN, LEI and SEDOL numbers will remain unchanged.

The Company also announces that its corporate website address will change to http://www.seitplc.com on 29 May 2025.

The Company confirms its investment strategy and portfolio of assets remain unchanged.

The name change is in response to new fund naming guidelines from the European Securities and Markets Authority (“ESMA”).

Shareholders are unaffected by the change and existing share certificates will remain valid and should be retained. Any new share certificates issued will bear the name SDCL Efficiency Income Trust plc.

Tony Roper, Chair of SEIT, said:

“SEIT is proud to be both an Article 9 Fund and a recipient of the London Stock Exchange’s Green Economy Mark. To continue to be able to market into the EU, SEIT needs to comply with ESMA, and this name change achieves that. Since its IPO in 2018, the Company’s investment strategy has focused on building a large and diversified portfolio of assets that deliver efficient energy solutions to end users. These solutions directly support the energy transition by virtue of reducing the amount of energy that is wasted globally.

FORESIGHT ENVIRONMENTAL INFRASTRUCTURE LIMITED

(“FGEN” or the “Company”)

Dividend announcement

FGEN, a leading listed investment company with a diversified portfolio of environmental infrastructure assets across the UK and mainland Europe, announces a final quarterly dividend of 1.95 pence per share for the period from 1 January 2025 to 31 March 2025.

Together with the interim dividends paid during the financial year to date of 5.85 pence per share, the Company will have paid total dividends of 7.80 pence per share in respect of the year ended 31 March 2025, in line with the dividend target set out in the 2024 Annual Report.

Dividend Timetable
Ex-dividend date           5 June 2025
Record date                  6 June 2025
Payment date               27 June 2025

SUPERMARKET INCOME REIT PLC

(the “Company”) 

RECOMMENDED PROPOSED TRANSFER OF LISTING CATEGORY AND NOTICE OF GENERAL MEETING

Supermarket Income REIT plc (LSE: SUPR), announces that a circular (the “Circular”) in relation to the proposed transfer of the Company’s listing category from the closed-ended investment funds category to the equity shares (commercial companies) category of the Official List (the “Proposed Transfer”) is expected to be published today.

Background to and reasons for the Proposed Transfer

On 4 March 2025, the Company announced the proposed internalisation of its management function (the “Internalisation”), which became effective on 25 March 2025. At the time of the announcement of the Internalisation, the Company also stated its intention seek a transfer of its listing. The Board is pursuing the Proposed Transfer as it believes that the equity shares (commercial companies) category of the Official List is more suited to a UK REIT with an internalised management structure and business strategy as set out in the Circular, alongside the reasons set out below:

·    it will significantly improve comparability for investors, as the majority of internally managed UK REITs are listed on the equity shares (commercial companies) category;

·     the Company’s closest peers are listed under the equity shares (commercial companies) category;

·    the Company will benefit from improved operational flexibility, efficiency and accountability of the Group’s executive management to shareholders;

·   it will reduce the costs and administrative burden associated with being a closed-ended investment fund (in particular, AIFM costs), thereby simplifying the business model and enhancing shareholder returns. The Company will no longer need to have a licensed AIFM;

·  the Board has concluded that generating attractive shareholder returns also arguably requires a more commercial/active asset management approach and having the flexibility to pursue new strategies will be a key element of its ongoing success;

·     the Board believes that being categorised as a commercial company will increase investor demand both from the UK and overseas;

·     it will potentially attract a wider range of research analysts; and

·    the Board has consulted with certain shareholders, who are strongly supportive of the Proposed Transfer, particularly for the reasons outlined above.