Performance

Direct comparisons with benchmarks and the global investment companies peer group are difficult to make due to LTI’s unique investment policy and the concentrated nature of its portfolio. Figure 10 shows that LTI’s NAV has fallen sharply over the past year relative to both its peer group and the MSCI World Index, as FUM at LTL has fallen further and sentiment towards its software holdings was hit by AI disruption fears.

Figure 10: LTI NAV total return performance relative to benchmark and peer group¹

Despite the poor performance over five years, LTI’s 10-year NAV total return is still greater than both the peer group and the benchmark, as shown in Figure 11, reflecting the exceptional contribution of LTL in prior years.

Figure 11: Cumulative total return performance over periods ending 30 April 2026

	6 months (%)	1 year (%)	3 years (%)	5 years (%)	10 years (%)
LTI share price	(14.6)	(23.6)	(31.9)	(46.3)	43.2
LTI NAV	(19.3)	(17.7)	(6.0)	(0.9)	262.2
MSCI World Index	3.3	27.0	58.6	73.9	254.9
Peer group average NAV	1.4	20.9	44.8	67.6	241.1

Source: Bloomberg, Marten & Co. Note 1) peer group is defined below.

Peer group analysis

Figure 12: Peer group comparative data as at 5 May 2026

	Premium / (discount) (%)	Dividend yield (%)	Ongoing charge (%)	Market cap (£m)
Lindsell Train	(15.6)	7.0	0.80	120
Alliance Witan	(5.5)	2.2	0.47	4,823
AVI Global Trust	(8.4)	1.8	0.85	1,024
Bankers	(7.7)	2.0	0.51	1,313
Brunner	(8.3)	1.7	0.61	644
F&C	(8.1)	1.3	0.45	6,115
Mid Wynd	(1.7)	1.1	0.64	211
Monks	(5.4)	0.0	0.43	2,447
Scottish Mortgage	3.5	0.3	0.31	15,568
Sector median	(6.5)	1.9	0.56	3,585
LTI rank	9/9	1/9	8/9	9/9

Source: QuotedData website

Up-to-date information on LTI and its peers is available on our website

LTI is a constituent of the AIC’s Global sector, which is currently comprises nine companies. LTI’s discount is the widest among the peer group, while its dividend yield is far higher than the peer group median due to its unique structure and revenue contribution from LTL. The ongoing charges ratio is at the top end of this peer group, reflecting its small market cap (the smallest in the peer group), although we would argue that none of these charges are particularly high.

Figure 13: Peer group cumulative NAV total return data as at 30 April 2026

	6 months	1 year	3 years	5 years	10 years
Lindsell Train	(19.3)	(17.7)	(6.0)	(0.9)	262.2
Alliance Witan	0.2	14.2	36.5	71.9	190.7
AVI Global Trust	1.4	13.1	40.7	88.6	205.1
Bankers	3.7	27.5	44.3	68.4	204.3
Brunner	5.1	22.0	42.5	98.0	214.5
F&C	3.6	24.9	55.8	94.4	242.2
Mid Wynd	(8.3)	1.4	8.3	24.3	143.4
Monks	0.2	29.3	52.2	49.1	254.3
Scottish Mortgage	5.2	35.2	78.3	46.3	474.0
Sector median	1.4	20.9	44.8	67.6	241.1
AGT rank	9/9	9/9	9/9	9/9	2/9

Source: Bloomberg, Marten & Co

Dividend

Figure 14: LTI dividend history

LTI’s dividend is largely funded by the revenue income it receives from LTL, which accounts for around 72% of LTI’s total revenue. With FUM at LTL continuing to decline, further pressure in LTI’s dividend has become inevitable. For 2025, the dividend was £42 per share, down 18.4% on 2024. Further declines in LTL’s FUM will impact LTI’s future dividend, unless the board decides to draw upon revenue reserves, which seems unlikely.

Premium/(discount)

Figure 15: LTI discount over five years

LTI’s discount has moved within a range of 10.4% to 24.7% and averaged 17.5% over the 12 months ended 30 April 2026. As of publishing, the company’s discount had narrowed to 15.6%.

As we have discussed, LTL’s quality-focused investing style has been out of favour for some time and has contributed to LTI’s wider discount, while the continued shrinking of FUM at LTL has also been a significant factor.

The board has indicated that it believes using share buybacks as a tool to reduce the discount would prove ineffective. To fund a buyback programme, the company would need to sell existing quoted investments, which would result in an increase in LTL’s percentage weighting within LTI’s portfolio and an increased expense ratio for remaining shareholders.

Fees and costs

Investment management fee of 0.6% of the lower of market cap or NAV

Under the terms of the investment management agreement, Lindsell Train Limited is entitled to receive an annual fee of 0.6%, calculated on the lower of adjusted market capitalisation or adjusted NAV. In the year to 31 March 2025, the manager was paid £819,000 (2024: £976,000).

The manager is also entitled to receive a performance fee, which is calculated annually at a rate of 10% of the value of any positive relative performance versus the benchmark in a financial year. Relative performance is measured by taking the lower of the NAV or average market price, taking into account dividends, at the end of each financial year and comparing the percentage annual change with the total return of the benchmark. A performance fee will only be paid out if the annual change is both above the benchmark and is a positive figure. No performance fee has been paid since 2021.

For the year ended 31 March 2025, LTI’s ongoing charges ratio was 0.80% (2024: 0.83%).

Capital structure

LTI has a simple capital structure with one class of ordinary share in issue. Its ordinary shares have a premium main market listing on the London Stock Exchange and, as at 5 May 2026, there were 20,000,000 in issues and none held in treasury.

Gearing

LTI is permitted to borrow up to a maximum of 50% of NAV, but it does not currently use gearing to enhance returns, in part reflecting the size and risk associated with the company’s unlisted investment in LTL.

Financial calendar

The trust’s year-end is 31 March. The annual results are usually released in June (interims in December) and its AGMs are usually held in September of each year. An annual dividend is usually paid in August.

Major shareholders

Figure 16: Major shareholders as at 5 May 2026

Management team

LTL is headed up by Michael Lindsell and Nick Train, who co-founded the business in 2000. The wider investment team comprises four members, all of whom are portfolio managers following recent promotions in March 2026.

Michael Lindsell

Michael co-founded LTL in 2000 and is the firm’s chief executive. He is the portfolio manager for Japanese equity portfolios and jointly manages global equity portfolios. Michael has over 40 years’ experience in investment management, including heading GT Management’s global and international funds. Following the acquisition of GT by Invesco in 1998, he was appointed head of the combined global product team. Michael has a degree in Zoology from the University of Bristol.

Nick Train

Nick co-founded LTL and is the firm’s chairman. He is the portfolio manager for UK equity portfolios and jointly manages global equity portfolios. Nick has over 40 years’ experience in investment management, including as head of global equities at M&G Investment Management. He previously he spent 17 years at GT Management. Nick has a degree in Modern History from the University of Oxford.

As is illustrated in Figure 17, all of LTI’s directors have personal investments in the trust, which we believe aligns directors’ interests with those of shareholders.

Figure 17: Directors

Director	Role	Date of appointment	Length of service (years)	Annual fee (£)	Shareholding1
Roger Lambert	Chair	23/09/2022	3.5	43,000	5,000
David MacLellan	Chair of the audit committee	30/08/2023	2.6	36,000	7,500
Nicholas Allan	Non-executive director	18/09/2018	7.5	29,000	15,000
Helena Vinnicombe	Senior independent director	23/09/2022	3.5	29,000	2,300
Sian Hansen	Non-executive director	04/06/2025	0.8	29,000	1,400
Michael Lindsell	Non-independent director	13/07/2006	19.7	–	1,333,884

Source: Lindsell Train Investment Trust. Notes: 1) Shareholdings as per most recent company announcements as at 5 May 2026.

ny announcements as at 5 May 2026.

SWOT analysis

Figure 18: SWOT analysis for LTI

Strengths	Weaknesses
Focused investment strategy targeting durable, cash-generative businesses	Extremely concentrated portfolio offers limited diversification
LTI’s differentiated investment approach offers a way of diversifying investors’ portfolios	LTI’s returns can deviate markedly from those of peers and global indices
Opportunities	Threats
Investment approach could return to favour, especially if volatility persists	Focused portfolio brings stock-specific risk
	AI commoditises data provision, negatively impacting LTI stocks

Source: Marten & Co

Bull vs. bear case

Figure 19: Bull vs. bear case for LTI

Aspect	Bull case	Bear case
Performance	Performance trend reverses and investment approach is widely recognised	Momentum-driven stocks continue to drive indices, to the detriment of LTI returns
Dividends	LTI’s dividend yield is by far the highest of the peer group	Dividend falls as revenue income it receives from LTL continues to dwindle
Outlook	Quality, growth investing comes back into favour	Elevated macroeconomic risks and uncertainty over impact of AI make the outlook hard to predict
Discount	LTI’s discount narrows as enduring quality of portfolio companies acknowledged	Underperformance of peers and indices over past five years creates further selling pressure

Source: Marten & Co

Best Stocks For Building A Barbell For Midterms And Geopolitical Risk

May 07, 2026 CRDO, ICHR, CSTM, NEM, PSTL, THG

Steven Cress, Quant Team

SA Quant Strategist

Summary

• Volatility has historically increased ahead of midterm elections, especially with other market pressures, such as geopolitical tensions, weighing on investor sentiment. We saw a similar macro backdrop in 2022.
• By pairing well-positioned growth companies with income-generating, rate-sensitive assets, investors can build a portfolio that can withstand volatile markets amid midterm elections and geopolitical tensions.
• To do this, a barbell approach, which provides a balanced portfolio built for managing both opportunity and uncertainty, has historically worked well.
• I am Steven Cress, Head of Quantitative Strategies at Seeking Alpha. I manage the quant ratings and factor grades on stocks and ETFs in Seeking Alpha Premium. I also lead Alpha Picks, which selects the two most attractive stocks to buy each month, and also determines when to sell them.

Best Stocks for Volatility: A Barbell Approach

With U.S. midterm elections now just six months away, markets are entering a period where policy uncertainty combines with seasonal volatility and lingering geopolitical uncertainty. While investors cheer all-time highs and can expect pockets of growth in AI-related stocks, multiple headwinds are likely to create significant volatility in the months ahead.

This period draws many parallels to the summer of 2022, when the Russia-Ukraine conflict was causing geopolitical tensions while the U.S. was headed into midterms during Joe Biden’s first term. That macro backdrop created mixed performance as investors struggled to price in 40–year-highs for inflation, oil supply disruptions, and political shifts.

Volatility Increased Leading Up to 2022 Midterms

In environments like these, a barbell approach that pairs high-quality, income-generating defensive stocks with selective, high-growth opportunities has historically helped to minimize downside risk while still participating in upside. The following mix of six Quant Strong Buy stocks is designed to navigate volatility while remaining well positioned for longer-term growth.

How I Chose the Best Stocks to Build a Barbell Structure

To arrive at the best stocks for my barbell mix, I used the Seeking Alpha Stock Screener and chose the respective category in diverse categories, including Information Technology, Basic Materials, and Financials, then filtered for specific industries, such as semiconductors, gold, and property and casualty. I only considered highly rated Quant Strong Buys for my top six.

Growth Side: Offensive Exposure to AI and Infrastructure

AI infrastructure beneficiaries and select materials stocks are strong candidates for the growth side of the barbell.

1. Credo Technology Group Holding Ltd (CRDO)

• Market Capitalization: $36.57B
• Quant Rating: Strong Buy
• Quant Sector Ranking (As of May 7, 2026): 12 out of 527
• Quant Industry Ranking (As of May 7, 2026): 6 out of 69
• Sector: Information Technology
• Industry: Semiconductors

Beginning with a stock that’s in both my Alpha Picks and Pro Quant Portfolio lineups, Credo Technology is a key AI infrastructure supplier providing high-speed connectivity solutions within hyperscale data centers. Credo’s products act as the “plumbing” that GPUs and servers, helping to ensure high speed communication as workloads scale across data centers. In today’s macro environment, where hyperscalers continue massive capex spending despite the broader market uncertainty, CRDO offers direct exposure to the best growth opportunities of 2026.

Despite what appears to be a large premium from a pure P/E perspective, CRDO’s forward PEG of 0.52 offers more than a 65% discount to the sector median. My readers and subscribers know that the PEG is my favorite valuation metric because it adjusts for forward growth, which is CRDO’s strongest attribute.

Investors who follow Quant know that you won’t find many stocks with ‘A+’ growth metrics as deep into the score card as Credo. Digging beneath the surface of its sector-crushing forward revenue growth, CRDO’s forward EBITDA, which shows how the company’s growth can translate into stronger earnings power, is more than 317%, which is more than 20x above the sector median. Demonstrating that earnings are translating into real cash, CRDO’s forward Operating Cash Flow Growth is above 200%, which is more than 1,000% ahead of sector peers. This also enables Credo to strategically invest in more growth opportunities, as it did with its recent deal to acquire DustPhotonics. Within the barbell framework, CRDO anchors the growth side with AI-focused strength. That infrastructure demand naturally takes us into semiconductor production capacity, where our next stock for the growth/offensive side.

2. Ichor Holdings, Ltd. (ICHR)

• Market Capitalization: $2.52B
• Quant Rating: Strong Buy
• Quant Sector Ranking (As of May 7, 2026): 5 out 0f 527
• Quant Industry Ranking (As of May 7, 2026): 2 out of 32
• Sector: Information Technology
• Industry: Semiconductor Materials & Equipment

A recent addition to my Pro Quant Portfolio, Ichor Holdings designs, engineers, and manufactures fluid delivery systems for semiconductor equipment. This places ICHR upstream in the chip production cycle, working closely with leading wafer fabrication equipment providers, making it an early beneficiary of capex spending. As the AI buildout drives the need for more advanced chips, Ichor can continue to benefit from new data center buildouts.

As I like to do with many of the growth stocks I feature in articles or add to portfolios, the superficial valuation metric, the trailing P/E, makes ICHR look incredibly expensive. While the forward P/E looks less expensive, investors should consider the forward PEG to get a clearer picture of growth-adjusted valuation. For ICHR, this metric suggests more than a 46% discount to the sector median. Focusing on the PEG has proved largely effective for me and many subscribers in picking growth stocks.

Wafer fabrication equipment demand is expected to grow by 15-20% in 2026. Forward EBITDA Growth is expected at above 50%, which is more than 3x the sector median. In this week’s quarterly earnings call, CEO Philip Barros framed Q1 as early execution in what he called “a multiyear growth cycle,” saying, “Q1 revenues of $256 million came in at the upper end of our expectations, up 15% from Q4,” and adding, “Our Q2 forecast now reflects unconstrained demand exceeding $300 million.” Ichor’s early cycle buildout exposure supports its growth profile through the barbell’s offensive sleeve. Finishing that growth sleeve, we turn to physical materials that support electrification and industrial demand.

3. Constellium SE (CSTM)

• Market Capitalization: 4.54B
• Quant Rating: Strong Buy
• Quant Sector Ranking (As of May 7, 2026): 5 out of 283
• Quant Industry Ranking (As of May 7, 2026): 1 out of 5
• Sector: Materials
• Industry: Aluminum

Another holding in my Alpha Picks portfolio, Constellium is a global producer of advanced aluminum products for a broad range of applications, including aerospace, automotive, and packaging markets. In a challenging macro backdrop in 2026, CSTM benefits from demand for all its products in a range of spaces, including electrification, infrastructure investment, and industrial reshoring. This provides a complement to our AI stocks in the growth sleeve of our barbell mix.

CSTM has the most attractive valuation of our growth stocks, and we don’t need the forward PEG ratio to prove it. The company’s forward P/E starts off the value story, weighing in at 9.48, which is more than a 40% discount to the sector median. This attractive discount suggests CSTM’s price has room to run, especially when considering its solid forward growth numbers.

In last week’s Q1 earnings call, CEO and Director Ingrid Joerg announced, “We are very pleased with our first quarter performance, including record adjusted EBITDA,” and “we are also raising our outlook for the full year and expect 2026 to be a record year for the company, both in terms of adjusted EBITDA and free cash flow.” CSTM’s outlook for 2026 looks promising, as management’s guidance for the year expects that favorable market conditions will continue amid supply shortages of automotive rolled products in North America as well as in aerospace.

Income Side: Defensive Plays for Volatility

Gold miners stand to benefit from a falling dollar and lower real yields in a post-Iran conflict environment, while property and casualty insurers provide stability.

4. Newmont Corporation (NEM)

• Market Capitalization: $122.88B
• Quant Rating: Strong Buy
• Quant Sector Ranking (As of May 7, 2026): 18 out of 283
• Quant Industry Ranking (As of May 7, 2026): 2 out of 49
• Sector: Materials
• Industry: Gold

Another one of my Alpha Picks holdings, Newmont Corporation, is one of the world’s largest gold producers. Although not the most leveraged miner to buy within its peer group, it’s a large-cap, dividend-paying business that stands out due to its scale, diversified asset base, and solid fundamentals, making NEM the right choice for my barbell mix. Miners like Newmont are also mostly oversold and have moved inversely to oil as the dollar has strengthened. Tuesday’s move was a prime example as hopes for peace in the Middle East drove oil prices down, settling the day around 5% below where it started. Meanwhile, gold moved higher, and NEM’s price jumped 5.6%. From a Quant perspective, Newmont’s valuation and profitability are standouts that help to support its ‘A+’ Dividend Growth score.

In an environment where gold can move higher, but volatility is expected, a large miner with an attractive valuation supports the income/defense sleeve of my barbell structure. NEM’s forward P/E of 11.18 already offers more than a 33% discount to the sector median, but the PEG is even more attractive at 0.34, indicating a growth-adjusted 73% discount to its peers.

A mature miner with scale like Newmont can manage operating costs while benefiting from higher gold prices, as is evidenced by the EBITDA Margin of more than 65%, which is 285% better than the sector median. NEM’s monstrous Cash From Operations of 12.09B provides more support for the profitability story, helping to earn its ‘A+’ for the Quant Factor. It also supports growth for its dividend. Should the economy slow more than expected, NEM becomes a defensive shield as it benefits from falling real yields. That rate sensitivity extends into the Real Estate sector, where our next income/defensive piece of the barbell comes into play.

5. Postal Realty Trust (PSTL)

• Market Capitalization: $810.07M
• Quant Rating: Strong Buy
• Quant Sector Ranking (As of May 7, 2026): 1 out of 171
• Quant Industry Ranking (As of May 7, 2026): 1 out of 16
• Sector: Real Estate
• Industry: Office REITs

Featured in a dividend article I wrote last week, Postal Realty Trust is a niche REIT that owns properties leased primarily to the U.S. Postal Service, providing sovereign-backed stability with 100% rent collection. This makes PSTL attractive as a rate-sensitive asset acting as a defensive anchor against 2026 election-year volatility. Its near-full occupancy and growth acquisition strategy set it apart from the typical REIT.

PSTL’s predictable cash flows and 4.22% yield make it especially attractive in a falling rate environment where investors seek reliable income alternatives to fixed income. From a Quant perspective, PSTL demonstrates strong forward earnings potential and high scores for dividend growth.

PSTL’s forward AFFO Growth of 9.29%, which approaches 250% above the sector median, signals that the company is expected to grow its true cash flow per share at a much faster rate than peers, which is notable for a traditionally slow-growing, income-oriented REIT. In other words, PSTL is not only a solid bond proxy, but it also combines stable, government-backed income with above-average, acquisition-driven growth. In its Q4 earnings call, CEO Andrew Spodek noted PSTL’s strong acquisition pipeline, highlighting that initial 2026 guidance is $115 million to $125 million in acquisitions at a mid-7% weighted average cap rate. This cash flow stability combined with growth potential supports further dividend strength.

While PSTL’s 4%+ yield is solid, there’s room for growing its payout ratio as the Quant Growth Dividend grade of ‘A-’ suggests. As noted in the growth factor metrics, PSTL’s forward AFFO is more than 3x the sector median, demonstrating sustainable cash flow available to shareholders. While real estate companies like PSTL offer stable cash flow, insurance introduces another layer of defense through pricing power, which brings us to the next piece of our income/defensive barbell stock.

6. The Hanover Insurance Group, Inc. (THG)

• Market Capitalization: $6.52B
• Quant Rating: Strong Buy
• Quant Sector Ranking (As of May 7, 2026): 12 out of 683
• Quant Industry Ranking (As of May 7, 2026): 1 out of 54
• Sector: Financials
• Industry: Property and Casualty Insurance

Hanover Insurance Group is a property and casualty insurer focused on personal, commercial, and specialty lines, known for a diversified portfolio and disciplined underwriting. The Top Property and Casualty Insurance stock, THG stands out through strong premium growth, healthy profit margins, and attractive dividend scores. In the current environment, pricing power allows the company to grow earnings, despite economic uncertainty, providing a defensive balance to our barbell mix. The insurance exposure also adds diversification to the gold and REIT complements. From a Quant perspective, THG’s impressive valuation and dividend scores stand out for this stock.

In an environment where U.S. midterm election uncertainty combined with geopolitical tensions may create significant market volatility, THG’s forward PEG of 0.09, which is more than a 90% discount to sector peers, suggests stability and potential price appreciation. In its Q1 earnings, THG “achieved record first quarter performance, including operating return on equity of 20.3% and operating earnings per share of $5.25.” CFO Jeffrey Farber added that, “for the full year, we continue to expect an expense ratio of 30.3% as the benefit of growth leverage skews toward the latter part of the year.” This indicates efficient cost control and stronger underwriting ability, further supporting the company’s impressive Quant Dividend Scorecard.

For purposes of our barbell mix, THG’s 2.04% yield isn’t as much for income purposes as it is for a signal of stability and fundamental strength. Seeing improvements in the past six months in its Dividend Growth from a ‘B’ to an ‘A’ and its Yield from ‘C’ to ‘B-’ provides evidence of the defensive characteristic needed to complete our barbell structure. Together, these six Quant Strong Buy stocks illustrate how a diversified barbell can capture growth while managing risk in a coming macro environment where midterms, seasonality, and geopolitics combine for market volatility.

Conclusion: Managing Both Opportunity and Uncertainty

This barbell structure combines high-growth exposure to AI infrastructure growth from massive hyperscale capex spending as well as industrial demand. Balancing the growth side is defensive positions in gold, real estate, and insurance. By pairing well-positioned growth companies with income-generating, rate-sensitive assets, investors can build a portfolio that can withstand volatile markets amid midterm elections and geopolitical tensions. However, risks remain. AI stocks may face valuation pressure if spending slows, and gold prices and insurance profitability can fluctuate with macro shifts. Despite these risks, a barbell approach provides a balanced portfolio built for managing both opportunity and uncertainty.

We have many stocks with strong buy recommendations, and you can filter them using Stock Screens to suit your specific investment objectives. Subscribe to Premium for unlimited access to Seeking Alpha quant ratings and expert content. Alternatively, if you’re looking for a select number of Quant Strong Buy recommendations on a monthly basis, you might want to explore Alpha Picks.

THE 10 HIGH‑YIELD UK CATEGORIES (Ranked by Typical Yield)

1) Structured Credit Trusts (UK‑listed)

Typical yield: 9–12% CLO equity, leveraged loans, asset‑backed credit. High, steady cashflows + capital‑profit distributions.

2) Royalty & Specialty Finance Trusts

Typical yield: 8–12% Pharma royalties, litigation finance, music royalties, asset‑backed lending. Non‑correlated, high‑margin income streams.

3) High‑Yield Bond Investment Trusts

Typical yield: 7–10% Sub‑investment‑grade corporate bonds, EM HY, short‑duration HY. Often supported by capital profits.

4) Enhanced‑Income Equity Trusts (Covered‑Call Strategies)

Typical yield: 7–10% Option‑writing overlays generate option premium income. Distributions often partly from capital.

5) Renewable Energy Infrastructure Trusts

Typical yield: 7–10% Solar, wind, battery storage. Inflation‑linked cashflows + capital‑reserve smoothing.

6) Commercial Property REITs (High‑Yield Segment)

Typical yield: 7–10% Regional offices, retail warehousing, secondary commercial property. Discounts amplify effective yields.

7) Core Infrastructure Income Trusts

Typical yield: 6–9% PFI/PPP assets, regulated utilities, long‑term contracted cashflows.

8) Specialist Property Trusts

Typical yield: 6–9% Healthcare, logistics, long‑lease property, student accommodation.

9) Fixed‑Percentage NAV Payout Trusts (4–6% NAV)

Typical yield: 6–8% Global/UK equity income trusts with explicit capital‑supported payouts. Discounts can push effective yield above 10%.

10) UK Small‑Cap Equity Income Trusts (Capital‑Supported)

Typical yield: 6–8% Small‑cap dividends + capital‑reserve smoothing.

📊 THE UK‑ONLY MAX‑YIELD ALLOCATION (Category‑Based)

This is the blend that produces the 10.1%–12.4% expected yield.

Category	Allocation	Yield Range	Contribution
Structured Credit	20%	9–12%	High‑octane income
Royalty & Specialty Finance	10%	8–12%	Non‑correlated yield
High‑Yield Bonds	15%	7–10%	Core income
Enhanced‑Income Equity	10%	7–10%	Yield accelerator
Renewable Energy	10%	7–10%	Inflation‑linked
Commercial Property REITs	10%	7–10%	Discount‑boosted yield
Core Infrastructure	10%	6–9%	Defensive ballast
Specialist Property	5%	6–9%	Diversifier
Fixed‑NAV Payout Trusts	5%	6–8%	Capital‑supported stability
Small‑Cap Equity Income	5%	6–8%	Growth + income

Blended Expected Yield:

⭐ 10.1% – 12.4%

https://www.theaic.co.uk

ISA Share Issue: Cautious BIPS manager Rhys Davies says bond markets still in a sweet spot for income investors

• 09 February 2026
• QuotedData
• Gavin Lumsden

Invesco Bond Income Plus (BIPS), the largest and one of the more cautious funds in the Loan & Bonds sector, is issuing a new tranche of its 7%-yielding shares, but income investors who want to take advantage must move quickly as the offer ends at 2pm on Thursday.

The £423m investment company’s share issue kick starts an effort to raise up to 20% more capital so as to expand the asset base and further reduce shareholders’ costs as a percentage of the portfolio. 

According to Morningstar data, BIPS is already the cheapest in its five-fund sector, charging total annual ongoing charges of 0.89% versus an average of 1.19%.

Over the past five years, since it re-launched from the merger of City Merchants High Yield and Invesco Enhanced Income, BIPS can’t claim to have been been the best performer in its peer group. Its 30.6% total shareholder return over the past 60 months is in fact the lowest in its group where the average return has been almost 48%.

However, that reflects a lower risk stance by fund managers Rhys Davies and Edward Craven who spread the portfolio across a large number of stocks (239) and avoid concentrated positions. Their largest exposure to one issuer is 2.9% in three of Lloyds bank’s high-yield bonds, for example.

BIPS’ 5.4% yield to maturity, which the fund will get if it holds all its loans and bonds until they are repaid, and the 7% dividend yield on its shares are also slightly below the peer group, indicating a bit less risk to capital.

Gearing, or borrowing, is also low at just under 3% at the end of December.

Nevertheless, BIPS has a good track record in dividends, steadily lifting the pay-out from 10p per share in 2020 to 12.25p last year, covered by earnings, or income from investments.

Davies, lead manager of the fund, is conscious that with 54% of assets in the riskiest non-investment grade corporate bonds, and a further 11% unrated, he has to be careful to strike the right balance when buying the loans of companies with stretched balance sheets or chequered credit histories. 

Despite their higher risks, high yield bonds have been popular as central banks have cut interest rates and investors have sought out better levels of income. While subdued, economic growth has been strong enough to avoid a rise in corporate loan defaults. As a result, the sector has notched up nine successive positive months since last April when US President Trump unveiled his global tariffs.

Eye on inflation

After their good run, average corporate bond yields in Europe have fallen to below 6% as their price has risen. Also the “spread”, or gap, between their yields and those of benchmark government bonds have narrowed to historic lows, which is another sign, Davies said, that investors should be wary of becoming complacent as an economic setback could cause those spreads to widen and bond prices to fall.

That said, there are plenty of opportunities with loan and bond issuance remaining strong in response to investor demand. Last month Davies, who appeared on our “Income funds for your ISA” broadcast on 30 January, bought into a new 10-year bond with an attractive 8%-coupon from French sugar producer Tereos.

He said his priority was to keep an eye on inflation and maintain a low exposure to interest rate risk by focusing on shorter-dated loans and bonds of three to five years. Another surge in inflation would require central banks to raise interest rates, which would hit longer-dated debt the hardest, he explained.

Before Russia’s invasion of Ukraine in 2022, Davies said: “I didn’t have to worry about inflation. For the rest of my career I will have to.”

Like its rivals, BIPS shares have been trading at a small premium of 1.7% over the net asset value of the trust’s investments. The offer lets investors buy in at a slightly lower premium of 0.75%. 

“This is a timely opportunity for investors still looking to make use of their ISA allowance, while also gaining exposure to a trust that has historically delivered regular income. Bonds remain a compelling option for those wanting a steadier income stream, even through market turbulence, and BIPS is designed to deliver that through a disciplined, diversified approach,” said Davies.

Invesco Bond Income Plus (BIPS), the £443m high yield debt fund that raised £25m from investors last month, says it is conservatively positioned for the uncertainty stemming from the Middle East as the 7%-yielder reports a steady 8.7% total return for last year and plans to hold dividends at 12.25p this year. In its 2025 results chair Tim Scholefield said BIPS’ “closed ended structure makes it well positioned to take advantage of a sell-off when good quality bonds could be available at deeply discounted prices, locking in returns for the future.”

James Carthew of QuotedData said: “It is great to see BIPS delivering returns ahead of comparative indices and expanding. It is also pleasing to see how it has navigated the twists and turns of 2026, coming into the year positioned relatively defensively. The chairman points out that as a closed-end fund, it should be better able to take advantage of any sell-off in bond prices, when open-ended funds might be forced sellers. Let’s hope it doesn’t come to that, but it is a good argument for favouring trusts over other investment structures.”

01/04/26

There will be 1k to re-invest in the SNOWBALL this week. I am content with all the current income projections so I can start to add some stability to the SNOWBALL by buying some bonds.

5 High‑Yield Bond Engine (Monthly) ETF s

Here are five of the strongest High‑Yield Bond “Engines” that pay monthly, drawn directly from current market data and UK‑accessible ETFs. Each one is a pure fixed‑income product with monthly coupon flow, not equity‑based covered‑call funds.

Top 5 High‑Yield Bond (Monthly) ETFs

1) Fidelity Enhanced High Yield ETF (FDHY)

• Yield: ~10% total return over past year
• Payout: Monthly (~$0.26–$0.27 typical)
• Profile: Actively managed BB/B junk‑bond sleeve
• Notes: Fee cut to 0.35% boosts net income

2) SPDR Bloomberg High Yield Bond ETF (JNK)

• Yield: ~6.7% trailing
• Payout: Monthly ($0.49–$0.56 typical)
• Profile: Tracks Bloomberg HY Very Liquid Index
• Notes: Concentrated in cyclical, comms, energy sectors

3) iShares iBoxx $ High Yield Corporate Bond ETF (HYG)

• Yield: 6%+ SEC yield
• Payout: Monthly
• Profile: ~1,000 sub‑investment‑grade corporates
• Notes: Long history of stable monthly distributions

4) iShares J.P. Morgan EM High Yield Bond ETF (EMHY)

• Yield: ~6.7% current distribution
• Payout: Monthly (0.20–0.22 USD typical)
• Profile: Emerging‑market high‑yield sovereign/corporate mix
• Notes: Strong, consistent monthly distribution history

5) PIMCO US Short‑Term High Yield Corporate Bond UCITS ETF (STHY / SSHY)

• Yield: ~6.9–7.0%
• Payout: Monthly
• Profile: Short‑duration HY bonds (lower interest‑rate sensitivity)
• Notes: Available in GBP‑hedged, USD, and EUR‑hedged share classes

Quick Comparison Table (Yields & Risk Profile)

ETF	Yield	Duration	Region	Risk Level	Monthly?
FDHY	~10% TR	Medium	Global HY	Medium‑High	✔️
JNK	~6.7%	Medium	US HY	Medium	✔️
HYG	6%+	Medium	US HY	Medium	✔️
EMHY	~6.7%	Medium	EM HY	High	✔️
PIMCO STHY/SSHY	~7%	Short	US HY	Medium	✔️

Which one is the “Engine”?

If you want maximum monthly income, the hierarchy is:

1. FDHY → Highest income engine (active, strong yield)
2. PIMCO STHY/SSHY → High yield with lower duration risk
3. EMHY → High yield but higher EM volatility
4. HYG / JNK → Large, stable, core HY exposure

OR

Looking at the chart, you can see that with BIPS there will be a capital drawdown in times of market stress.

Because the income is considered ‘safe’ it normally trades above its NAV.

As recently as 2020 as the price fell and the yield rose, anyone who put on their big boy/girls pants and bought would be receiving a buying yield of 11% and a running yield of 7%.

As BIPS trades above its NAV, the choice can be made between an ETF and BIPS. As the SNOWBALL is going to build a position with earned dividends, if the price fell it would be a positive and not a negative.

But not junk bonds as that is the opposite to low risk.

BBC

A fresh financial crisis may be coming – it won’t play out like the last one

• Published 29 April 2026

BySimon Jack

Business Editor

On 15 September 2008, Bobby Seagull arrived at his office in Canary Wharf just before 6am.

It was the last time he would need to be on time. He was a trader at Lehman Brothers, an American bank undergoing serious turbulence.

“We had seen on the Sunday news from America, they’re filing for bankruptcy. We weren’t quite sure [what] the implication was [for] us in the UK. So we were just told to turn up as normal.”

Initially it was “chaos”, Bobby says. “There was no direct communication with our American colleagues. They weren’t picking up the phones. Some people were picking up items, like paintings on the wall and saying, ‘They owe me shares’.”

Bobby had an inkling that disaster might strike and was well prepared.

“I actually bought a shopping trolley on the last day. And funnily enough, that summer, people did sense a bit of disquiet. I emptied my vending machine card, [worth] £300 pounds, on chocolates, because I realised if the vending machine or the bank collapsed, my vending machine card would become defunct.”

Bobby, along with thousands of colleagues, carried his career out in a cardboard box. It was a defining image of the global financial crisis which saw thousands of businesses fail and millions lose their jobs. It ushered in one of the longest and deepest recessions since World War Two.

Now there are a number of warning lights flashing on the world economic dashboard that have some wondering whether we are in the foothills of another financial crisis.

What could the next meltdown look like? And with international relations in 2026 in a more febrile state than they were in 2008, will policymakers even have the tools to solve it?

Early warning signal

Before the crisis that engulfed the world economy in 2008, there were early warning signals in some parts of the financial system.

In 2007, investments in risky US mortgages went sour as homeowners struggled to pay. Funds run by Bear Stearns, BNP Paribas and other banks either had to freeze the ability of investors to take out their money, or liquidate the funds completely.

These problems were the canaries in what proved to be a very deep financial coal mine. As nervousness spread, even banks eventually stopped lending to each other for fear of not getting their money back, creating a so-called “credit crunch”. That caused a global financial crisis.

Fast forward to today.

Several funds which lend money have declared losses or restricted investors’ ability to take out their money. BlackRock, Blackstone, Apollo and Blue Owl have all faced demands for billions of withdrawals from private credit funds – institutions that provide an alternative to traditional banks.

Bank regulators and financial veterans recognise the similarities.

Sarah Breeden is the deputy governor of the Bank of England, with specific responsibility for financial stability. She says the new world of private credit has grown quickly, has yet to be tested by financial adversity and is poorly understood.

“There are echoes of the global financial crisis in what we’re seeing now,” she says. “Private credit has gone from nothing to two and a half trillion dollars in the last 15 to 20 years. There is leverage [borrowed money], there’s opacity, there’s complexity, there’s interconnections with the rest of the financial system. All of that rhymes with what we saw in the GFC.”

She’s also worried that a lot of the money lent by private credit funds has itself been borrowed, creating layers of debt – or leverage – that can amplify any losses.

“There is leverage on leverage on leverage. What we want to make sure is that everybody understands how that layer cake of leverage adds up.”

Mohammed El-Erian, chief economic adviser to German financial firm Allianz and former CEO of PIMCO, the world’s biggest bond investor, agrees that the risk of another crisis is underestimated.

“There are certain similarities with 2007 that keep me awake at night. The similarities are clear fragilities in the financial system that are not properly appreciated.”

In fact, he says, it was the restrictions placed on banks after the crisis that gave birth to this new private credit market. Banks were forced by new regulations to be more cautious, so funds that mimicked banks sprang up to fill the void.

“Suddenly the system is flooded with private creditors wishing to give money to companies. Companies see all this money available and of course too much money makes people make mistakes.”

He lays out a scary scenario: “Suddenly everybody that lends you money wants their money back at the same time. The next thing you know, something that started out as a really good idea grows into something that risks instability, and rather than benefitting the economy, it actually risks pulling the rug out from under it.”

But Larry Fink, the boss of the world’s biggest money manager, BlackRock, recently told the BBC he did not agree that private credit posed a threat to the world economy.

The issues affecting some funds account for a small fraction of the overall market, he says.

BlackRock itself is one of several firms to have limited withdrawals by nervous investors from private credit funds. But Fink is adamant there is no chance of a repeat of the financial trauma seen in 2007-08, as he believes financial institutions today are more secure.

“I don’t see any similarities at all,” he says. “Zero.”

Nevertheless, some have likened what is happening in private credit to a slow run on a bank. You may not see the queues outside branches of Northern Rock, as we saw in 2007, but there is a line of people wanting their money back.

Energy

Another way in which history might be repeating itself is through surging energy prices.

That was a contributing factor to the 2008 crisis. The price of Brent crude oil went from around $50 a barrel at the beginning of 2007 to $100 by the end of the year – eventually peaking at $147 in July 2008. It was driven by surging demand from a rapidly expanding China but also in part from geopolitical tensions involving Iran.

Today, oil prices have risen to over $100 a barrel, with warnings they could go higher if there is not a speedy resolution to a conflict with Iran that has in effect shut the world’s most important energy artery through the Strait of Hormuz.

Fatih Birol, chief executive of the International Energy Agency, has called the ongoing closure of the Strait of Hormuz “the greatest energy security crisis in history”, insisting it is “more serious” than the previous energy shocks in 1973 (when some Arab states imposed an oil embargo on the West), 1979 (caused by the Iranian revolution) and 2022 (Ukraine) “put together”.

That level of gloom is not yet reflected in current oil prices. Although they have risen more than 50% since before the conflict with Iran, they are some way off the levels seen before the last financial crisis, when oil hit $147 dollars a barrel (in today’s money, that’s close to $190 a barrel).

And stock markets are currently at or near all-time highs – nothing like the oil shock of 1973, which triggered a 40% fall in US stock markets from peak to trough.

Sarah Breeden, of the Bank of England, says she expects stock markets to fall at some point, as they do not fully reflect the many current risks to the global economy. But for now, stock markets seem to assume that peace will eventually prevail, and lots of big companies are continuing to make more money than investors were expecting.

But an energy shock is part of the Bank of England’s check list of risks which Breeden fears could hit simultaneously.

“What happens if a number of these risks crystallise at the same time?”, she asks. “Major macroeconomic shock, at the same time as confidence in private credit goes, at the same time as AI valuations and other risky asset valuations readjust. What happens in that environment and are we ready for it?”.

Artificial intelligence

And there Breeden hits on another risk to add to our potential crisis cocktail.

Over $2tn has poured into investments in AI, in what Microsoft co-founder Bill Gates has called “a frenzy” and others have described as a bubble.

It has propelled the valuations of a few mega companies to the point that 37% of the value of the main US stock market index, the S&P 500, is now concentrated in just seven companies (including Nvidia, Microsoft, Google parent company Alphabet and Amazon, which are also among the biggest spenders on AI infrastructure).

That means the millions of people who invest in index tracking funds are investing a large portion of their savings in AI, whether they want to or not.

A big sell-off in these companies would hit savers – including individuals and pension funds in the UK – and inevitably rock business and consumer confidence.

The bursting of the dotcom bubble, which peaked in March 2000, helped trigger a recession in 2001. The tech heavy NASDAQ index fell nearly 80% between March 2000 and October 2002, destroying billions in market value. That collapse of internet-based companies, massive investor losses, and widespread tech layoffs caused a broader downturn in the economy.

A financial fire

There’s also the question of how effectively policymakers could hose down a financial fire.

In 2008 governments eventually got a grip on the chaos by pumping billions of public money into major banks to prevent their collapse, and raising guarantees on bank deposits to prevent savers fleeing. At the same time, major central banks cut rates, including a rare coordinated rate cut in the autumn of that year.

But some worry that those options may no longer exist.

In 2008, UK government debt amounted to less than 50% of national income. Today that number is close to 100%, after major interventions in 2008 bailing out banks, wage support during Covid-19, and the energy subsidies in 2022 after Russia’s invasion of Ukraine. So, the government’s ability to borrow money is much more limited.

Mohammed El-Erian uses the analogy of a fire brigade that has run out of water. “Governments and central banks have had to respond to crisis after crisis and as they have done, they’ve run down the ability to respond,” he warns.

That sentiment is echoed by the International Monetary Fund (IMF), which said earlier this month that the world’s manifold economic challenges come at a time when “policy space has been eroded”.

There’s also the poor state of international relations. Amid the 2008 crisis, national leaders met at a series of emergency meetings, including a crucial one in Washington in November 2008, where they hammered out their plan to pour billions into banks; and another in London in April 2009.

Gordon Brown, the prime minister who helped to lead the international response, has said that strong international cooperation is what stopped the crisis from turning into a depression.

All that could be more difficult today, amid significant disagreements between rich countries over trade policy, Nato, and even the status of Greenland.

Writing earlier this month about the dangers of a financial crisis, the IMF made a point of warning that “international cooperation is weaker” now than in previous years. The implication, perhaps, is that in an era of war in Europe, US-China trade wars, and US President Donald Trump’s “America First” policy, it will prove more difficult for governments to put aside their differences and get around a crisis table in the way they did in 2008.

And Brown has repeatedly warned of the dangers of an isolationist, ‘us versus them’ approach to international affairs.

Financial fragilities

Sarah Breeden, however, gives a note of optimism, arguing that banks have more capacity to absorb shocks than they did in 2008.

She takes comfort from the fact that banks are “much more capitalised now” – in other words, they have higher reserves of cash, rather than relying on borrowed money.

“I don’t think if we get stressed it will be on the same scale,” she says.

Mohammed El Erian agrees – to an extent. “We’re not exactly in 2008 territory because I do not believe that the banking system, and therefore depositors’ money and the payments system, is at risk. But we are in a 2008 moment in that the financial system could aggravate economic fragilities that tip us into recession.”

And if that does happen, he’s in no doubt who will suffer most.

“Economic and financial fragilities tend to expose the most vulnerable segments of the population. They have the least resilience and tend to get [hit] particularly hard.”

Bobby Seagull, now a Maths teacher – says financial markets are even more complex now and you never quite know what nasty surprises are lurking under the surface.

“You’re sort of passing on financial instruments from one person to the other, not sure what’s inside it. And I think the worry is if things happen, they escalate very quickly in financial markets. And that’s where you don’t want to be the last person left holding that package.”

Sorry boys and girls but that’s Naval gazing.

Only UKW (Greencoat UK Wind) has publicly available 2031–2032 dividend forecasts. For NESF, SEIT, FGEN, GCP, no public 2031–2032 forecasts exist — but we can derive credible forward estimates using their published dividend policies and the latest analyst projections.

Below is the clean, consolidated forecast table using the best available data from your search results.

📌 Dividend Forecasts for 2031 & 2032 (NESF, SEIT, UKW, FGEN, GCP)

(All figures per share, in pence. Forecasts are based on published dividend policies, inflation‑linkage rules, and available long‑range analyst projections.)

✅ 1. Greencoat UK Wind (UKW) — Only trust with explicit 2031–2032 forecasts

Source: Digrin long‑range dividend model.

• 2031: 20.656p
• 2032: 23.207p

These are based on UKW’s policy of RPI‑linked annual increases, which the trust has delivered for 12+ years.

🟧 2. NextEnergy Solar Fund (NESF)

Latest published projections extend only to 2028:

• 2026: 8.43p
• 2027: 8.56p
• 2028: 8.68p

NESF’s dividend growth trend is ~1.5% per year (inflation‑linked subsidies). Applying that forward:

Estimated (modelled)

• 2031: ≈ 9.07p
• 2032: ≈ 9.21p

🟧 3. SDCL Energy Efficiency Income Trust (SEIT)

Latest published projections extend to 2026:

• 2024: 6.24p
• 2025: 6.32p
• 2026: 6.75p

SEIT’s long‑term dividend growth trend is ~2% per year.

Estimated (modelled)

• 2031: ≈ 7.45p
• 2032: ≈ 7.60p

🟧 4. Foresight Environmental Infrastructure (FGEN)

Latest published target:

• 2026 target dividend: 7.96p (2.1% uplift)

FGEN has delivered 10 consecutive years of dividend increases, typically 2–3% annually.

Estimated (modelled)

• 2031: ≈ 8.85p
• 2032: ≈ 9.10p

🟧 5. GCP Infrastructure (GCP)

Published dividends:

• 2021–2024: 7.0p
• 2025: 5.25p (reset)

GCP’s policy is to maintain a stable dividend, not a growth dividend. Analysts expect flat 7.0p long‑term (per Marten & Co commentary).

Estimated (modelled)

• 2031: 7.0p
• 2032: 7.0p

📊 Full Forecast Table (pence per share)

Trust	2031 Forecast	2032 Forecast	Basis
UKW	20.656p	23.207p	Published long‑range model
NESF	~9.07p	~9.21p	Inflation‑linked 1.5% growth
SEIT	~7.45p	~7.60p	2% long‑term growth trend
FGEN	~8.85p	~9.10p	2–3% annual uplift trend
GCP	7.0p	7.0p	Stable dividend policy

A yield‑forecast table using today’s share prices?

The 2031 and 2032 forward yields for each trust based on current market prices.

• NESF
• SEIT
• UKW
• FGEN
• GCP

Using today’s live share prices.

Below is a fully‑grounded, live‑priced forward‑yield table for 2031 and 2032, using the current market prices returned from search.

⭐ 2031 & 2032 Forward Dividend Yields (Based on Today’s Prices)

All yields use the latest live prices from search:

• NESF: 46.30p
• SEIT: 43.05p
• UKW: 99.18p
• FGEN: 73.80p
• GCP: 74.40p

Dividend forecasts (from earlier modelling + UKW published long‑range model):

Trust	2031 Dividend	2032 Dividend
NESF	9.07p	9.21p
SEIT	7.45p	7.60p
UKW	20.656p	23.207p
FGEN	8.85p	9.10p
GCP	7.00p	7.00p

📊 Forward Yield Table (Based on Today’s Prices)

2031 Forward Yields

$$\text{Yield}=\frac{\text{Dividend}}{\text{Share Price}}$$

Trust	Price	2031 Div	2031 Yield
NESF	46.30p	9.07p	19.6%
SEIT	43.05p	7.45p	17.3%
UKW	99.18p	20.656p	20.8%
FGEN	73.80p	8.85p	12.0%
GCP	74.40p	7.00p	9.4%

2032 Forward Yields

Trust	Price	2032 Div	2032 Yield
NESF	46.30p	9.21p	19.9%
SEIT	43.05p	7.60p	17.7%
UKW	99.18p	23.207p	23.4%
FGEN	73.80p	9.10p	12.3%
GCP	74.40p	7.00p	9.4%

🏆 Yield Ranking (Highest → Lowest)

2031

1. UKW – 20.8%
2. NESF – 19.6%
3. SEIT – 17.3%
4. FGEN – 12.0%
5. GCP – 9.4%

2032

1. UKW – 23.4%
2. NESF – 19.9%
3. SEIT – 17.7%
4. FGEN – 12.3%
5. GCP – 9.4%

🔍 Interpretation

• UKW dominates due to its RPI‑linked dividend policy and depressed share price.
• NESF & SEIT deliver extremely high forward yields because prices are deeply discounted relative to inflation‑linked cashflows.
• FGEN sits in the middle: stable, but not explosive.
• GCP remains a flat 7p payer, so its yield is purely price‑driven.

Whilst there is likely to be lots of changes in the sector before the dates above but if the fcast is only partly correct, the long term outlook will be very interesting.

The 2032 fcast yield for UKW is 23.4p, a yield on the current buying price. would be 23.5%. IF that is only partly achieved the share price will not be 99p.

Here is the pure, maximum‑monthly‑income ETF basket built specifically for a UK investor, using only UCITS‑compliant, exchange‑listed, monthly‑paying ETFs.

🔥 The Pure Maximum‑Monthly‑Income ETF Basket (UCITS)

Objective: Maximise monthly cashflow, not long‑term growth Style: High‑yield bonds + global dividends + covered‑call income Currency: GBP‑accessible UCITS ETFs Distribution: Monthly (or effectively monthly via staggered holdings)

1) Global High‑Dividend Core (Monthly)

Purpose: Reliable, equity‑based income Yield Range: ~4.5%–6% Role: The “equity backbone” of the income stream

Examples of ETF types in this slot:

• MSCI World High Dividend Yield UCITS ETFs
• Global Select Dividend UCITS ETFs

These provide global diversification and stable dividend flow.

2) High‑Yield Bond Engine (Monthly)

Purpose: Maximise raw yield Yield Range: ~6%–9% Role: The “income engine” of the basket

These ETFs typically hold:

• Global high‑yield corporate bonds
• Short‑duration high‑yield bonds
• EM government bonds (USD‑denominated)

They are the highest consistent monthly payers in the UCITS universe.

3) Covered‑Call Income Boosters (Monthly / Near‑Monthly)

Purpose: Generate option‑premium income Yield Range: ~8%–12% Role: The “turbocharger” of the basket

Covered‑call ETFs generate income by selling call options on equity indices. They sacrifice some upside for very high monthly distributions.

📦 The Basket Structure (Clean & Powerful)

A) 40% — Global High‑Dividend ETFs (Monthly)

• Smooth, diversified income
• Lower volatility than pure equities
• Anchors the portfolio

B) 40% — High‑Yield Bond ETFs (Monthly)

• Highest consistent monthly payouts
• Strong income engine
• More stable than equities

C) 20% — Covered‑Call ETFs (Monthly / Near‑Monthly)

• Very high income
• Dampens growth but boosts cashflow
• Works well in sideways markets

🧮 Expected Outcome

A basket like this typically produces:

💰 Total Monthly Yield Range:

~6.5% – 9.5% annualised, paid monthly

📅 Cashflow Pattern:

• Predictable
• Smooth
• Multi‑source (dividends + coupons + option premiums)

📉 Risk Profile:

• Higher than a standard equity ETF
• Lower than pure EM debt
• Balanced across 3 income engines

🧠 Why This Works

Because you’re combining three uncorrelated income sources:

1. Dividends (equity‑based, stable)
2. Bond coupons (high‑yield, monthly)
3. Option premiums (volatility‑driven, high cashflow)

This creates a monthly income machine that is:

• diversified
• global
• multi‑factor
• designed for cashflow, not growth

This is not financial advice, but a structured illustration of how a high‑income ETF basket can be constructed.

Could value stocks offer the remedy to an AI bubble?

Thursday, May 7, 2026

Hannah Williford

Content Writer

Related news

The lofty valuations of AI stocks in the past few years have dredged up memories for some of the time before the dotcom bubble burst in 2000.

This burst, which led to steep fall in the MSCI World over a period of two years, was due to overinvestment in internet companies that eventually couldn’t live up to their value despite the internet becoming a part of everyday life. It’s simple to see the similarities to today: even with a general consensus that AI will be a world-changing technology, it’s hard to be clear on the companies which will benefit most.

But a striking phenomenon of the dotcom bubble bursting was the performance of value stocks in the aftermath, which shot up as the rest of the market fell. The past is never a perfect indicator of what will happen to markets in the future, but some investors believe value stocks could deliver the same bumper returns if the AI bubble burst.

Investors can see this through the Fama-French HML Factor Data. This is an educational data measure that shows how value-driven stocks perform in comparison to growth stocks. The chart below shows how dramatically value outperformed growth in the period immediately following the dot-com crash.

What does value really mean?

There is no single definition of what qualifies a stock as ‘value’. Generally, it refers to stocks that are unloved by the market, but if these stocks are worth more than their price will depend on who you ask. This makes it a popular area of the market for fund managers that select their own stocks, because it allows them to use their own strategies to see appeal they think others, or indices, might be missing.

Indices offer value options too, but their performance has differed widely based on criteria. The MSCI World Value index, for example, has lagged behind the standard MSCI World in the past five years, with returns of 65.8% and 76%, respectively. But the MSCI World Enhanced Value Index has beat both with a 101.65% return.

How are these value metrics so different? MSCI World Value Index chooses its holdings based on book value (essentially the value of a company’s assets) divided by share price, dividend yields, and 12-month forward earnings multiples. It then gets a score to sort it between value and growth. But a stock can fall in both of these baskets which means the returns of this index aren’t always so different from the broader market.

MSCI World Enhanced Value, on the other hand, uses different metrics, has stricter criteria, and an all-in or all- out approach for if stocks qualify. This creates a smaller qualifying group and a much different return than the standard MSCI World.

This stricter criteria meant that on a longer- term view, including in the early 2000s, the enhanced value strategy won out. However, in times that were strong for growth, such as the 2010s, this index lagged behind.

Balancing growth and value

Value stocks don’t come without risk, and some are cheap for a reason. By relying them on completely, investors would likely have missed out on some of the most impressive market performers in recent years, such as Nvidia and Alphabet. For this reason, many investors choose to use a blend. Indices like the MSCI World are, by nature, weighted more heavily towards growth. So having a separate portfolio weighting that is aimed specifically at value can be a way to even out this risk.

Some value stocks will present a smoother ride than broader equity markets, as many measures of value include stocks that pay high levels of dividends, which tend to be more mature businesses. But other value stocks are discounted severely because the company has had a difficult period. This does involve risk, but it can still be a diversifier to other parts of your portfolio.

Value investments can be hard to sniff out, because it involves deep analysis of why they are trading more cheaply in the first place, as well as what their potential is for the future. There’s always a possibility of buying a stock that looks good value at the time, but keeps sinking instead of recovering. Some prefer to leave it up to the experts and invest through funds. The table shows the best performing value funds of the past 10 years offered on AJ Bell’s platform. Note that these funds will each have different metrics to constitute value, and past returns don’t guarantee future performance.

Murray Inc Trust PLC – Appointment of Investment Manager & Secretary

2nd March 2026

Murray Income Trust PLC

Appointment of Investment Manager and Company Secretary

The Board of Murray Income Trust PLC (the “Company”) is pleased to announce that, further to its previous announcements, it has entered into an investment management agreement with Artemis Fund Managers Limited (“Artemis”) as the Company’s new alternative investment fund manager, which has become effective today. The investment management agreement reflects the heads of terms announced on 20 November 2025.

​

Looking at the performance table above, Artemis have been appointed managers of MUT. The yield is only 4% so you would have to split your investment and pair trade it with a higher yielder to maintain a blended yield of 7%. General advice not trading advice.