Investment Trust Dividends
Snowball from Animal Farm
The current estimate for income from dividends for 2025 is £11,368.00.
When re-invested at 7% it should earn £795.00 in extra income.
The figure includes a special dividend from VPC and some December dividends could be received in the next financial year.
Fcast dividends for 2026 > £9,817, over halfway towards the end destination of a ‘pension’ of 13%.
Gilts are bonds issued by the UK government. In recent years, they have become increasingly attractive to individual investors due to increasing interest rates and tax efficiency.
Gilts are a type of government bond. When you buy a gilt, you effectively lend money to the UK government in exchange for periodic interest payments (coupons) and the return of your initial investment (the principal) when the bond matures.
UK government bonds are known as ‘gilts’ because their past paper certificates had gilded (golden) edges. The name also reflects their security and reliability, as the UK Government has never failed to make repayments.
Related: Investing for Beginners: How to Start Investing in the UK
UK Gilts Explained
This presents an opportunity for individual investors to buy them at a discount, and benefit from their tax-free capital gains when they mature.
For example, take a gilt maturing in 2026 with a low coupon of 0.125%:
This tax advantage makes low coupon gilts an efficient way to earn returns, especially for higher-rate taxpayers.
Gilts may be suitable for you if:
You can buy gilts through a broker, most investment platforms will offer gilts. You can also gain exposure to gilts through pooled products such as ETFs, however, pooled products will not be subject to the same tax treatment (free of capital gains tax).
Gilts have become an attractive investment for individuals due to recent economic changes and their tax efficiency. While they may not offer the highest returns, they provide a safe and predictable way to grow your money, especially in uncertain times.
If you are a higher or additional rate tax-payer looking for a low-risk investment that can help preserve and grow your wealth with high levels of tax efficiency, gilts might be worth considering.
Before investing, always review your financial goals and consult a professional if needed.
There are two conflicting views of markets.
Below, we show how the S&P 500 has performed after the first rate cut over the last five decades:
| Year of first rate cut | Three months | Six months | One year after |
|---|---|---|---|
| 1973 | -10.2% | -6.2% | -36.0% |
| 1974 | -14.7% | -15.3% | +7.5% |
| 1980 | +15.0% | +28.9% | +30.3% |
| 1981 | -11.0% | -7.9% | -17.8% |
| 1982 | -4.8% | +17.4% | +36.5% |
| 1984 | -1.2% | +7.2% | +10.5% |
| 1987 | +0.1% | +1.7% | +7.5% |
| 1989 | +7.4% | +7.5% | +11.9% |
| 1995 | +5.1% | +8.0% | +13.4% |
| 1998 | +17.2% | +26.5% | +27.3% |
| 2001 | -16.3% | -12.4% | -14.9% |
| 2007 | -4.4% | -11.8% | -27.2% |
| 2019 | +3.8% | +13.3% | +14.5% |
| Average | -1.1% | +4.4% | +4.9% |
Historically, the S&P 500 returns 4.9% on average one year after the first interest rate cut, seeing positive returns nearly 70% of the time.
In the three months following a rate cut, the market often dips, but typically rebounds by the six-month mark. This aligns with conventional wisdom that lower interest rates stimulate economic activity by reducing borrowing costs for businesses and consumers, which tends to benefit the stock market.
However, S&P 500 performance following rate cut cycles can vary significantly. For instance, U.S. equities saw double-digit declines after the first rate cuts in 1973, 1981, 2001, and 2007. On the other hand, the S&P 500 surged 36.5% one year after the 1982 rate cut cycle. In the most recent rate cut cycle, the S&P 500 jumped by 14.5% in the following year.
In this way, interest rate cuts don’t show the whole picture. Instead, positive earnings growth may offer a more reliable indicator of S&P 500 performance in the following year. When earnings growth is positive, the market averages 14% returns one year after. In contrast, when earnings decline during periods of falling interest rates, the S&P 500 increased by 7%, on average.
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📈 Yes, the S&P 500 is showing signs of being overbought as of mid-September 2025.
Here’s what’s happening:
Henry RiversTuesday, Sep 9, 2025
– S&P 500’s recent gains show growing divergence from broader market breadth, with 80% of stocks above 50-day averages in May 2025 but narrowing participation by September.
– Overbought conditions intensified as 20% of S&P 500 stocks entered overbought territory, with RSI peaking at 76 and WealthUmbrella Margin Risk hitting extreme 13-level readings.
– Persistent divergence between index performance and equal-weighted indices/small-cap laggards signals structural fragility, historically preceding market corrections.
– Magnificent Seven dominance and systemic overvaluation create volatility risks, urging investors to adopt defensive strategies amid mixed economic signals and Fed policy uncertainty.
The S&P 500 has long been a barometer of U.S. equity health, but recent data suggests a growing disconnect between the index’s performance and the broader market. Investors are increasingly scrutinizing narrowing market breadth and systemic overbought conditions, which together may signal a heightened risk of a near-term correction.
Market breadth, as measured by the Advance/Decline Line (AD Line), has been a mixed bag in 2025. In late 2024, the AD Line plummeted despite the S&P 500’s resilience, a classic bearish divergence that signalled weak participation and reliance on a narrow group of large-cap stocks, particularly the “Magnificent Seven” S&P 500 Forecast: Correction Signs & 2025 Buy Levels[2]. This trend persisted into early 2025, with high uncertainty over policy shifts like tariffs exacerbating the imbalance S&P 500 Forecast: Correction Signs & 2025 Buy Levels[2].
However, a more recent rebound in mid-2025 offered a glimmer of hope. By April–June 2025, the AD Line surged to a 2-year high, outpacing the S&P 500’s recovery and suggesting broader participation as stocks rebounded from oversold conditions S&P 500 Nears Record Highs: Key Market Drivers Explained[3]. By late May, 80% of S&P 500 stocks were trading above their 50-day moving averages, a robust sign of sector-wide strength US Stocks Watchlist – 5 September 2025[4]. Yet, this optimism has since dimmed. As of September 2025, the AD Line has flattened while the S&P 500 continues to climb, raising concerns about sustainability S&P 500 Forecast: Correction Signs & 2025 Buy Levels[2].
The S&P 500’s recent rally has pushed it into overbought territory, with its 14-day RSI peaking at 76 in July 2025 US Stocks Watchlist – 5 September 2025[4]. While the index has since retreated slightly, technical analysts warn that the market remains vulnerable. The WealthUmbrella Margin Risk Indicator, a rare tool for gauging systemic overbought/oversold levels, hit an extreme reading of 13 in late 2025—a level historically associated with trend reversals Is the S&P 500 Overdue for a Correction? 2025 Forecast & …[1].
Compounding the risk is the fact that one in five S&P 500 stocks has entered overbought territory, with financials and industrials joining the tech sector in this precarious position S&P 500 Nears Record Highs: Key Market Drivers Explained[3]. This widespread overbought condition, combined with valuations at “nosebleed” levels, creates a volatile backdrop S&P 500 Nears Record Highs: Key Market Drivers Explained[3].
The most alarming signal is the persistent divergence between the S&P 500 and breadth indicators. While the index hit record highs in September 2025, the Equal-Weighted S&P 500, small-cap indices, and semiconductors lagged behind Is the S&P 500 Overdue for a Correction? 2025 Forecast & …[6]. This lack of confirmation from key sectors is statistically rare and historically precedes corrections S&P 500 Forecast: Correction Signs & 2025 Buy Levels[2].
Moreover, the AD Line’s recent bearish tendencies—despite a brief rally in Q2—suggest fragility. If the AD Line continues to decline while the S&P 500 rises, it could signal a loss of momentum Market Breadth: What it is, why it matters, common …[5]. Conversely, if the index experiences new lows while breadth metrics improve, it might hint at a reversal Is the S&P 500 Overdue for a Correction? 2025 Forecast & …[1].
The S&P 500’s current trajectory is a double-edged sword. On one hand, the mid-2025 rally demonstrated broad-based strength, with 67.87% of stocks trading above their 50-day averages in September US Stocks Watchlist – 5 September 2025[4]. On the other, the reliance on a handful of mega-cap stocks and systemic overbought conditions paints a cautionary picture.
Investors should remain vigilant. While the market’s technical setup does not guarantee a correction, the combination of narrowing breadth, overbought momentum, and divergent sector performance warrants a defensive stance. As the Federal Reserve pauses monetary policy and economic signals remain mixed, the coming months will test whether this rally is a durable recovery or a prelude to a pullback.
Pollen Street leaves the Watch List. After increasing in price by 37% the Trust now only yields 5.7%.
I’ve reduced the holding in SDIP back to 10k to reduce the risk. As the raison d’être of the Snowball is not TR but to re-invest dividends, to earn more dividends.
Current profit for SDIP is £1,405 but remember a profit is not a profit until the underlying position is sold
I’ve bought 168 shares of ETF QYLP for 2k. This completes the buying in QYLP, until the position is monitored.
Cash to re-invest for the pair trade of QYLP £523.00 destination X.
This 12% Dividend Is Now On Sale (Thanks to a “Hidden” $30-Billion Move)
by Michael Foster, Investment Strategist
At CEF Insider, we live for those times when a bad news story turns up a great dividend opportunity. And the headlines just served one up, putting a 12%+ dividend (in a hated sector, no less) on the table.
This special situation is intriguing because no one in America is talking about it. That’s because it comes from across the pond, in the UK. Specifically, I’m talking about one of the UK’s biggest insurers, Phoenix Group, pulling £22 billion (US$30 billion) from asset manager Aberdeen Group plc (SLFPY), reportedly to manage these funds in-house.
Aberdeen’s name might ring a bell if you’re a CEF Insider member, as we’ve held the firm’s funds in the past. It’s one of the world’s largest closed-end fund (CEF) managers.
The move comes as Aberdeen has been suffering from poor performance, negative headlines and slipping analyst sentiment.
You can see that in the performance of two of Aberdeen’s international CEFs, the abrdn Global Premier Properties Fund (AWP), in purple below, and abrdn Global Infrastructure Income Fund (ASGI) (in orange).
Both have flopped in relation to a benchmark international ETF, in blue, in the last five years:
Two Key Aberdeen CEFs Lag Their Benchmarks …
(The company rebranded from “Aberdeen” to “abrdn” a few years ago, and recently – and wisely – went back to “Aberdeen” in March. The firm’s CEFs don’t appear to have been relabeled yet.)
Which brings me to those two 12%+-paying Aberdeen “diamonds in the rough”: abrdn Healthcare Investors (HQH), with a 12.4% yield, and 12.7%-paying abrdn Healthcare Opportunities Fund (THQ). These are a bit unique in that Aberdeen acquired them fairly recently: at the end of October 2023, to be precise.
Before that, both were owned by Tekla Healthcare Management and run by a team that included both medical researchers and financial pros. The proof of that approach is, as they say, in the pudding.
As you can see below, over the last three years, both HQH (in orange below) and THQ (in purple) have beaten the benchmark pharma ETF (in blue), even though the return on all three has been mediocre at best:
THQ, HQH, Beat the Index in a Tough Environment
Healthcare has been weighed down – especially this year – with the appointment of RFK Jr. as head of the HHS, the threat of tariffs on imported pharmaceuticals and pressure from the Trump administration to cut drug prices. But there are signs this pessimism may be overdone, setting up the first part of our opportunity:
HQH, THQ Have “Discount Momentum”
Above we see the discounts to net asset value (NAV, or the value of their underlying holdings) on THQ (again in purple) and HQH (in orange).
As you can see, these markdowns have been narrowing in the last few years, even with THQ vaulting into premium territory, only to see that premium collapse. Those “discounts-with-momentum” are the second part of our buy case here.
Now let’s look at each fund’s NAV performance, because we can clearly see that HQH’s total NAV return (in orange below) – or the performance of its underlying portfolio, including dividends collected and reinvested – outstrips that of THQ (in purple).
HQH’s Portfolio Gains, Despite Its Deep Discount
And HQH is cheaper, too, with that 6.4% discount compared to 3.7% for THQ.
A better-performing portfolio and a deeper discount? That gets our attention!
This is why it makes sense to dip a toe in HQH right now. Not only are you getting a 12.7% dividend, but you’re getting a bigger discount, too. And I do see that discount continuing to narrow, putting a further lift under the stock. That markdown could also slam shut pretty quickly if the dour mood around pharma brightens – even a bit.
Moreover, HQH’s portfolio is less risky than those of other biotech funds. Its top position is in the large-cap Amgen (AMGN), while its top-10 holdings include well-known firms like Vertex Pharmaceuticals (VRTX) and Eli Lilly (LLY).
The fact that this is a well-established fund holding well-established stocks adds another element of safety – and another reason why its discount should keep narrowing. Investors who buy now will enjoy some nice dividends while they wait.
But all that said, there’s one negative about the fund that’s keeping me from giving it a full-throated recommendation today.
I really like to see a monthly payout to go with that high yield, and HQH pays quarterly.
That matters for reasons that go beyond convenience: Fact is, any management team with the guts to offer a monthly payout is confident they can keep that cash stream rolling out.
EPIC Name Market Share Price Dividend Div Impact Declaration Date Ex-Dividend Date Payment Date
SDIP Global X SuperDividend UCITS ETF ETF 730.0p $0.076 0.77% 18-Sep-25S Dividend Announcement 25-Sep-25 03-Oct-25
All dates and dividends subject to change.
SDIP,QYLP and SMIF pay monthly dividends.
VPC having returned cash are in the final stages of their winding up
This is the blogs Snowball, your Snowball should differ subject to how many years you have to retirement and therefore your risk tolerance.
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