In our new DIY Investor Diary series, we speak to interactive investor customers to find out how they invest in funds and investment trusts, what their goals and objectives are, current issues and concerns regarding their portfolio, and what they’ve learned along the way. The premise is to try and provide inspiration to other investors, and we would love to hear from more people who would like to be involved.

Swotting up to learn how history’s most successful investors made their fortunes is a great way for DIY investors to pick up the tips and tricks of the trade.

Part one.

This is exactly what the first DIY investor to be profiled in our new monthly series did when he came across Warren Buffett. The investor, who works for a financial education charity and is in his early 50s, read up on the investment principles of Buffett, as well as the Sage of Omaha’s tutor Benjamin Graham.

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There are various attributes that Buffett looks for, but his basic approach is to sniff out companies he thinks can consistently increase their intrinsic value and sustain a high return on equity over the long term. Crucially, Buffett has a beady eye on valuations, as he does not want to overpay for a company. 

To find companies well-placed to keep competitors at arm’s length in the decades to come, Buffett looks for businesses with strong economic “moats”. The quality growth names to which he is naturally drawn possess some sort of competitive edge, such as being armed with intangible assets or selling a product or service bought repeatedly by a loyal customer base. Such companies are typically price-makers, as they are able to dictate what they charge for their product. In a high inflationary environment, like now, this quality becomes even more attractive.

The DIY investor, who is male, wanted to benefit from Buffett’s approach, so put his money into Buffett’s firm Berkshire Hathaway Inc Class B 

. Over the years, he attended a couple of annual general meetings (AGMs) to soak up his wisdom in person.

He invested in Berkshire Hathaway for several years until 2010 when Terry Smith launched his Fundsmith Equity fund.

Smith invests in well-established high quality companies with strong competitive advantages. His stance is that he does “not seek to find tomorrow’s winners – rather, to invest in companies that have already won”. The portfolio has 26 holdings, with Microsoft Corp, L’Oreal SA  Visa Inc Class A V0.59% among the top 10 holdings.

“Terry Smith builds on Buffett’s principles, and the way he invests resonates with what I believe,” our DIY investor says.

“The way I saw it, I would rather a spread of shares [Fundsmith Equity typically holds fewer than 30 companies] than just exposure to one company, Berkshire Hathaway. In addition, there’s less exchange rate risk as Fundsmith Equity is priced in pounds.”

The DIY investor still holds Fundsmith Equity today. It is a position he’s kept adding to, and he has not taken any profits. Since launch, the fund is up 519% versus 195% for the average global fund.

“Terry Smith is a rare example of a fund manager articulating his investment approach in a credible and robust way. He is very true to the strategy, and doesn’t spin a narrative.

“Hopefully, he will continue running the fund for a long time to come, but there’s also a strong team, with Julian Robins a potential successor.”

The DIY investor today has 40% of his overall investments in Fundsmith Equity, and the remaining 60% in UK smaller company funds and investment trusts. Regarding the latter, he says he wished he knew about investment trusts earlier, due to the various bells and whistles they have, which private investors can use to their advantage.

One of the main differences is that investment trusts have a fixed pool of assets that do not fluctuate with investor demand. In contrast, funds – unit trusts or OEICS – are required to sell assets to meet investor redemptions.

Having a fixed pool of assets is particularly advantageous for specialist investment trusts holding assets that cannot be easily or swiftly bought and sold, such as property, private equity or very small companies. Managers don’t have to sell their holdings to release money to investors looking to liquidate their investments when markets dip; instead investors sell their shares on the stock market and the share price takes the strain.

Due to this, our DIY investor prefers investment trusts for smaller company exposure. Among his holdings are JPMorgan UK Smaller Companies (LSE:JMI), BlackRock Smaller Companies Ord  and Invesco Perpetual UK Smaller (LSE:IPU).

His interest in smaller companies was piqued by long-term data showing how they have delivered higher returns compared to larger companies over the long term. Research by the London Business School found that £1 invested in 1955 in UK smaller companies would have grown to £7,933 by the end of 2020. In contrast, £1 invested in UK large companies over that 65-year period would have grown to £1,054.

Given that smaller companies have been out of favour for the past 18 months or so, now presents an opportunity to put into practice Buffett’s ‘buy low’ philosophy.

Our DIY investor points out: “I have time on my side, so I am prepared to patiently wait for smaller companies to recover. In the meantime, it is often a good time to buy when something is out of favour.

“When I am looking at smaller company options, I am looking to gain an understanding of the nuances of how the fund manager invests. My preferred way to invest in this area is investment trusts, as the structure lends itself to it given the fund manager won’t be a forced seller.”

In his early 50s, the DIY investor is aiming to continue growing his investments for the foreseeable future. However, when the time comes to start drawing down on his pot, he won’t be switching his investments from growth to income. Instead, he says he will sell down fund units when he wants to spend some of the capital growth achieved over the years.

“I completely agree with Terry Smith on this – I don’t get why people focus so much on income. At the end of the day your pension fund – such as a self-invested personal pension (SIPP) – is meant to be run down at retirement, so sell a bit of your investments when needed.”

Smith’s stance on income is that while reinvested dividend income may be a crucial element of long-term returns, it does not follow that investment styles focused on maximising dividend income will deliver more growth.

The DIY investor’s portfolio does not contain any passively managed strategies – index funds and exchange-traded funds (ETFs). He points out that Buffett’s stance on the active versus passive fund debate is one that he agrees with. Buffett has said that for most people they are better off opting for a low-cost index fund.

However, with his own investments, our DIY investor prefers active funds, which have the ability to outperform an index.

He said: “I agree that passive is a good option for many as a core holding, but I am prepared to take the risk of picking active funds in the hope of outperformance. There’s a lot of fund managers who have rubbish track records picking stocks, but there’s also a lot of dross in a passive fund.”

He has no plans to hang up his boots. Our DIY investor points out that investing is one of his hobbies and that he will continue with it while he is mentally active, and that a key motivation for investing is financial independence. He notes that investing “creates more options for myself. It’s money not for the sake of it, but it gives options for myself or to help others.”  

Lessons learned over the years

Our DIY investor’s top tip is the earlier you invest, the better. This is to benefit from the power of compound interest, achieved through investing for the long term.

In a nutshell, compound interest refers to the way investment returns themselves generate gains. For instance, if you invest £1,000 into a fund returning 5% over one year, you’ll earn £50. Assuming that you don’t withdraw any money, the next year you’ll earn 5% on £1,050, which is £52.50. This doesn’t sound like much of an uplift, but as each year passes, the compounding effect multiplies.

He also stresses the importance of fees, including platform charges, which is one of the only things that private investors can control.

Our DIY investor says that investing for the long term and keeping your emotions in check are other ways to increase your chances of investment success.

He also names a couple of other very useful tips: “Write down the rationale for every purchase and sale. This particularly helps when markets are jittery. Also remember that shares don’t have emotions, but humans do. This is important to remember regarding losses.”

At such times, he says, rather than panic-selling investors should take a step back and come to a rational decision, one that is not based on emotion. “Challenge yourself on what you believe and what you disbelieve – letting go of a view is difficult for most of us,” he says.

As history shows, for those willing to take a long-term perspective sharp dips end up being a mere footnote in the grand scheme of things. At times of stock market turbulence, it is worth remembering that volatility is part of the deal of investing in equities. It is the price investors pay for the fact that, over the long run, putting money into shares rather than leaving it in cash will yield greater rewards.

A plan needs to have an end destination, otherwise it’s not much of a plan.

The Snowballs preferred end destination, ranked in order.

1. A dividend re-investment plan, then live off the dividend stream for your ‘pension’.

2. A TR plan and use a gilt/treasury ladder for income.

3. A mixture of 1/2.

4. A TR plan and use the 4% rule for income.

5. A TR plan and buy an annuity.

That’s my preferred options for the Snowball, just as your Snowball should be different so should your preferred options.

Gold Just Got Cheaper and It’s Jet Fuel for This 8.3% Dividend

Brett Owens, Chief Investment Strategist
Updated: June 3, 2025

Gold prices have taken a breather—and we’re getting a rare opportunity to snag two shimmering dividend plays paying up to 8.3%.

Here’s why this setup is on the table: While recession worries are still valid, they’re overblown. Plus, the doomsayers are missing critical details set to kick gold higher. Let’s break all of this down, then get into the 8.3% (and growing) payouts the archaic metal is poised to deliver.

The “No-Landing” Economy: Alive, Well—and Bullish for Gold

Last fall, we talked about a “no-landing” economy in the US, where growth ticks along, but inflation sticks around, too. Fast-forward to today, and that’s pretty much how things have played out.

“But wait,” the first-level thinkers cry. “Didn’t the economy shrink in the first quarter?”

Sure, GDP growth did slow in Q1. But the underlying numbers were more bullish than the headlines suggested.

The drop mainly came from a surge in imports ahead of tariffs—and imports are calculated as a drag on GDP. Government spending also fell in light of DOGE cuts, while consumer spending held up.

In other words, this wasn’t real weakness. It was a data blip. And we’ll happily take it!

“No-Landing” Becomes Reality, Gold Takes Off

Consecutive negative quarters would signal an “official” recession, but President Trump and Treasury Secretary Scott Bessent do not want this scarlet letter heading toward the midterms. Jay Powell wants nothing to do with it, either.

So we can expect the government and the Fed to continue their (quiet) interplay to keep rates down and growth ticking along. Inflation—or just the fear of inflation, which is all we need to spur gold—will likely come along with it, prompting higher gold prices.

Bessent and Powell Team Up to Spur Gold

Let’s start with the “One Big, Beautiful Bill,” which is nothing if not stimulative (even though it adds to the $2-trillion-and-growing deficit abyss Uncle Sam is staring into), with its broad array of tax cuts.

Consider, for example, the potential elimination of taxes on tips and overtime. According to the House Ways and Means Committee, this could put $1,700 in the pockets of individual taxpayers who collect either one.

These folks, who lean toward the lower end of the income scale, tend to spend their earnings in the real economy, driving growth (and potentially inflation). Wealthier taxpayers, on the other hand, are more likely to pump any tax savings into investments.

The bill has passed the House, and we have to see what happens with it in the Senate. But with both parties broadly supporting the tip/overtime measure, it’ll likely survive.

Next up we have Jay Powell, who, despite his tough talk, recently stepped up the Fed’s bond buying by an extra $20 billion a month!

Finally we have Treasury Secretary Scott Bessent, who’s likely to stick with a tactic used by former Treasury Secretary Janet Yellen: Leaning more on short-term Treasuries to finance the government’s needs, thereby reducing issuance—and increasing demand—for longer-term Treasuries.

Without this shift toward shorter-term borrowing, the 10-year Treasury yield would be 30 to 50 basis points higher, according to a 2024 paper by economist Nouriel Roubini. In other words, the 10-year yield would top 5% today. And the cost of borrowing for business (lending rates) and individuals (mortgage rates) would be notably higher along with it.

The bottom line? These measures (and more) are likely to keep inflation worries alive, even if they keep long rates capped and slow economic growth. That makes today’s pullback in gold worth buying. Here are two ways to do it, for either high income now or dividend growth (and price gains) later. Or both!

Gold Play No. 1: An 8.3%-Paying Fund With a Discount “Kick”

I’ve been critical of the GAMCO Global Gold, Natural Resources & Income Trust (GGN) in the past, because its discount to net asset value (NAV) never seems to drop to a level that catches our interest.

That, in turn, has been part of the reason why GGN typically trails gold prices. But that discount story is starting to change (As a CEF, GGN regularly trades at a different level than its portfolio value, or NAV).

GGN’s “Hidden” Discount

CEF discounts like these quietly drive price gains as they flip to premiums. And while GGN’s 2.3% discount isn’t huge, it’s a far cry from the premiums we saw late last year. That suggests this trade is much less crowded now, even as gold’s outlook improves.

Moreover, that 2.3% markdown is right around where it was a year ago. Here’s how buyers did back then, as that discount shot to a 4% premium over the following five months (note that about a third of this gain came in the form of dividends):

GGN’s Last “Disappearing Discount” Drove a Fast 13% Gain

Another premium could be ahead, sparked by those moves by the Fed and the Trump administration we just talked about.

Now there is something we need to keep in mind with GGN: It isn’t a “pure” gold play. As the “Natural Resources” in the name suggests, about 60% of the portfolio is in mining stocks—including some non-gold names like Freeport McMoRan (FCX), which focuses mainly on copper.

Another third or so is in energy stocks, with Exxon Mobil Corp. (XOM) the fund’s top holding. That may be okay if you’re bullish on oil. But with another part of Bessent’s economic strategy being, quite literally, “drill, baby, drill,” we think shares of gold mining companies offer better, er, “prospects” now, especially if you’re less focused on current income.

Which brings me to …

Gold Play No. 2: A Way to Profit From Cheap Energy, Soaring Gold

Imagine for a second you’re an exec at a gold miner like Newmont Corp. (NEM), the biggest of the bunch. As I write this, the WTI crude price is around $62, not far off lows last seen in 2021. That’s huge, with energy being a major input cost for any miner.

At the same time, the selling price of your main output, gold, is around $3,300. That’s still near historic highs, even with the modest pullback we’ve seen.

I think you’ll agree that this is a very good setup for a gold miner—maybe as good as it gets! No wonder Newmont’s revenue shot up 25% year over year in Q1, while EPS soared to $1.68 from $0.14 a year earlier. Fourteen cents!

And yet—as I write this, shares trade at just 12-times forward earnings, far below the five-year average of 19.3.

NEM yields 1.9% now and pays a base plus variable dividend that fluctuates with gold prices. But the dividend clocks in at just 27% of NEM’s last 12 months of free cash flow, so it’s safe and primed to rise if gold keeps climbing.

The Last Word: GGN for Income, NEM for Gains (and Payout Growth)

Here’s where that leaves us with gold miners like NEM: Gold is likely to move higher, and energy prices are likely to remain low—both thanks to Bessent and Powell.

That makes NEM worth a look, especially if you’re okay with a bit of movement in the dividend. Higher gold also helps strengthen GGN’s 8.3% payout, even with the prospect of continued lower energy prices. That payout comes in monthly and has held steady since mid-2020.

NextEnergy Solar Fund Ltd
NESF

If you are considering adding any Investment Trust to your Snowball, the first check is to see if they have paid a gently rising dividend.

Check the dividend fcast if there is broker coverage, buy and sell advice is of interest only but extra caution if the consensus is a SELL.

Fourth Interim Dividend Declaration

NextEnergy Solar Fund, a leading specialist investor in solar energy and energy storage, is pleased to announce its fourth interim dividend of 2.11p per Ordinary Share for the quarter ended 31 March 2025.

The fourth interim dividend of 2.11p per Ordinary Share will be paid on 30 June 2025 to Ordinary Shareholders on the register as at the close of business on 23 May 2025.  The ex-dividend date is 22 May 2025.

This dividend announcement brings the total declared dividends for the financial year ended 31 March 2025 to 8.43p per Ordinary Share and represents the Company’s eleventh successive year of successfully meeting its dividend guidance.

Check what the company says about the current dividend and any guidance on future dividends.

If you are content that dividends are ‘secure’ although no dividend is one hundred percent secure and you like the yield of

Price 66.5p. Dividend 8.43p = Current yield 12.5%

You know that if the dividend is ‘secure’ your capital will be returned in 8 years and you will have a share that pays you income at a cost of zero, zilch, nothing.

Also as the dividends are re-invested you will receive income from the re-invested cash and your total yield would be ??????????

The next xd date is the end of August.

After researching similar high yielding Trusts, you may or may not decide to buy.

The choice my friend is yours.

2 mega-cheap dividend shares to consider this summer, 1 with a 12.7% yield!
Investors don’t need to spend a fortune on dividend shares to target a large and reliable passive income, as these top stocks show.

Posted by Royston Wild
Published 4 June

NESF
SUPR

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.

Looking to make a big passive income at low cost? Here are two great dividend shares worth thinking about as the summer season kicks off.

Supermarket Income REIT
Real estate investment trust (REIT) Supermarket Income REIT (LSE:SUPR) trades at a near-10% discount to its net asset value (NAV) per share. It also carries a large 7.6% forward dividend yield.

While it’s sensitive to interest rate changes, I still think it’s potentially a great low-risk way to source a second income. And especially at today’s prices.

As the name implies, this property stock provides exposure to the ultra-stable food retail market. But this isn’t all: by focusing on the industry’s leading players — ‘Big Four’ operators Tesco and Sainsbury‘s are just a couple of big hitters on its books — rent collection and occupancy issues are rarely an issue.

What’s more, by focusing on omnichannel stores, Supermarket Income draws out the threat posed by online grocery to future earnings.

As a REIT, the business is obliged to pay at least 90% of its annual rental profits out by way of dividends.

As I mentioned, the stock is vulnerable to interest rate changes that push up borrowing costs and depress asset values. But on balance I think it’s a great way to consider sourcing a long-term income.

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.

NextEnergy Solar Fund
With a 12.7% forward dividend yield, NextEnergy Solar Fund (LSE:NESF) is the third-highest-yielding UK investment trust today. I think it has tremendous long-term potential as demand for green energy heats up.

It’s not just the rush to net zero that’s driving renewable energy growth. Rising concerns over energy security (worsened by the Russia-Ukraine war) are also propelling investment into sustainable sources and making capacity extensions more cost effective.

NextEnergy Solar has 101 assets spread across Europe, The Americas and Asia, providing solid geographic diversification. Roughly 85% of its sites are located in the UK too, where the government’s renewable energy policy is especially favourable for operators.

On top as packing that huge yield, the trust’s shares trade at a near-30% discount to their NAV per share. This represents great value in my view.

Like Supermarket Income, NextEnergy solar is highly sensitive to rises in interest rates. But this isn’t all, as changes to favourable green investment policy could also impact future profits. Recent changes in the US show that supportive government initiatives can be subject to change.

However, I believe these risks are more than reflected in the cheapness of the fund’s shares. On balance it’s still a solid passive income stock to consider.

Asked by: Dr. Jarred Rath Jr.  |  Last update: February 15, 2025
 

How the Rule of 72 Works. For example, the Rule of 72 states that $1 invested at an annual fixed interest rate of 10% would take 7.2 years ((72 ÷ 10) = 7.2) to grow to $2. In reality, a 10% investment will take 7.3 years to double (1.10^7.3 = 2). The Rule of 72 is reasonably accurate for low rates of return.

What is the 7 year compounding rule?

Using the Rule of 72, you can realize the power of compounding interest and better plan for future financial goals. If $5,000 was invested with an annual growth rate of 10%, the original investment would double to $10,000 in 7.2 years. After 7.2 years $10,000 doubles to $20,000.

How long would it take for you to double your money from $9000 to $20,000 if you will earn 12% interest?

The rule is this: 72 divided by the interest rate number equals the number of years for the investment to double in size. For example, if the interest rate is 12%, you would divide 72 by 12 to get 6. This means that the investment will take about 6 years to double with a 12% fixed annual interest rate.

With darkening investment skies, I am considering investing this month’s earned income, including current cash around 3k into a pair trading strategy.

An Investment Trust that pays a dividend around ten percent and a UK Government Gilt paying around 4%. Although this would be a small drag on overall performance, it would still maintain a blended yield of seven percent.

The Government Gilt to be held until/if/when the next market crash happens and the gilt would then be sold and re-invested into a Dividend Hero share.

LWDB is a coveted Trust but if the drop was not substantial it could possibly replace the safe investment of the Government Gilt. Current yield 3.47%, so a lot of water would need to flow under a lot of bridges.

How much will you need in your pension pot to fund your retirement lifestyle?

The PLSA highlights that the full annual new state pension – currently £11,973 – will help fund much of the minimum standard but you will need a larger pension pot to buy an annuity or earn enough from drawdown for a moderate or comfortable retirement.

Analysis by Quilter for MoneyWeek suggests that a single person would need a pension pot worth £459,000 to get a moderate level of income from an annuity, rising to £738,000 for a comfortable retirement.

A couple would need £515,000 to purchase an annuity for a moderate lifestyle and £929,000 for a comfortable one.

This assumes an annuity rate of 5.34% for a single person and 4.79% for a couple.

The amount you need to put away in a pension to build a pot worth £738,000 will depend how far away you are from retirement.

If you have 40 years to save, then you would only need to put away £7,4677 per year, according to Quilter.

But that rises to £12,652 over 30 years and £23,830 over 20.

This assumes a 4% annual real return.

“What the figures continue to show is that it will take a concerted effort to achieve a pension pot required to meet the difference between the income level indicated by the standard and that provided from the full state pension,” says Jon Greer, head of retirement policy at Quilter.

“The earlier that savers understand the difference, then the easier it will be to plan how to achieve it – or achieve the target that’s personal to you. Unfortunately, no one is going to do it for you.”

AJ Bell estimates that to obtain these standards in drawdown, a single person would need a pension pot worth £490,000 for a moderate lifestyle or £790,000 for a comfortable one.

This rises to £515,000 for couples wanting a moderate lifestyle and £890,000 for those seeking a comfortable standard.

The figures are based on annual investment returns of 4% after charges, that income rises by 2% per year and the pot lasts for 25 years.

“Spikes in inflation have clearly made that task harder but there is no magic bullet when it comes to building a retirement pot that matches your goals and spending plans,” says Tom Selby, head of retirement policy at AJ Bell.

“The key is to save as much as you can from as early as possible, taking advantage of the upfront boost of pension tax relief, tax-free investment growth and, where available, employer contributions. While the fund sizes needed to achieve a moderate or comfortable standard of living might be intimidating, making a realistic budget and setting up a regular savings plan can make the task a lot less painful.”

A couple would need £515,000 to purchase an annuity for a moderate lifestyle and £929,000 for a comfortable one.

This assumes an annuity rate of 5.34% for a single person and 4.79% for a couple.

Of course when you retire the annuity rate could be higher or lower, that’s the gamble you take with your retirement.

The income for a moderate lifestyle based on an annuity of 5%, would be

£25,750. Whilst you may not plan on having a pot of £515,00 could you make a plan using a dividend re-investment Snowball for a similar amount ?

Remember you would keep all your capital rather than gifting it to an Insurance Company.

FORESIGHT ENVIRONMENTAL INFRASTRUCTURE LIMITED

(“FGEN” or the “Company”)

Strategy and performance update

·    Re-focused investment strategy following an evaluation of strategic options

·    Strategy prioritising core environmental infrastructure assets

·    No material disposals in the near term, sales of growth assets planned in the mid-term

·    New adjusted fee structure agreed with the investment manager

·    Resilient NAV, record cash generation and increased dividend target

·    Publication of Annual Report in June to include a full update on strategic priorities

The Board of FGEN, a leading investor in private environmental infrastructure assets across the UK and mainland Europe, today provides an update on the Company’s unaudited March 2025 Net Asset Value (“NAV”), dividend and strategy.

Performance highlights

·   NAV total return of 1.0% in the three months to 31 March 2025, and 0.6% in the financial year to 31 March 2025.

·   NAV of £678.7 million as of 31 March 2025 (£695.4 million as of 31 December 2024). NAV per share of 106.5 pence down from 107.4 pence in December 2024 (-0.8%).

·   Delivering on dividend commitment: Final quarterly dividend of 1.95 pence in line with the Company’s target.

·   Record cash generation from the portfolio, supporting sustainable dividend coverage of 1.32x.

·   Targeting an 11^th consecutive annual increase in the dividend: dividend target of 7.96 pence per share for the year to 31 March 2026, a 2% uplift on FY 2025.

·   Active discount control through the repurchase of 9,746,891 shares in the quarter ended 31 March 2025. Total buybacks since 15 August 2024 of £19.2 million and the extension of the programme to £30 million announced in March 2025.

Ed Warner, Chair of FGEN, said:

“FGEN’s portfolio continues to perform to plan, delivering record cash generation, a resilient NAV and a well-covered and growing dividend. This robust foundation confirms that the operational part of the portfolio delivers significant value in the near-term, while growth assets carry meaningful upside potential in the future. The ongoing reduction in gearing, share buybacks and recent asset disposals alongside an adjusted fee structure announced today strengthen FGEN’s position for the future.

“As part of the Board’s determination to do everything to maximise shareholder value, it has considered a full range of strategic options with independent advisors.  The Board concluded that the long-term prospects of the Company and shareholder interests are best served through the proactive management of the existing portfolio. The Company will follow a re-focused investment strategy, prioritising a core portfolio of environmental infrastructure assets with long-term stable cash flows delivering predictable income alongside opportunities for growth. 

“In the medium term, the Company is seeking to deliver capital appreciation through the disposals of its growth assets and as such, no material asset disposals are expected in the near-term. We look forward to presenting our strategic priorities at the full year results in June where we will set out the substantial, long-term investment opportunity for environmental infrastructure.”

Re-focused investment strategy

With the support of independent advisors, the Board rigorously evaluated a full range of strategic alternatives for the Company, including a managed wind-down, a targeted divestment approach, the continuation of the current investment strategy, and potential mergers and acquisitions.

Following this review, the Board has concluded that the long-term prospects of the Company and shareholder interests are best served through the proactive management of the existing portfolio, and a refocused investment strategy that reflects the structural changes in macro-economic conditions since 2022, characterised by increased levels of market volatility and higher return expectations in an elevated rate environment.

Given this context, future investment activity will be disciplined, seeking to maintain a balanced risk-return profile and prioritising core infrastructure assets and businesses that offer long term stable cash flows, secured revenues and inflation linkage. FGEN will focus on renewable energy generation – solar, wind, anaerobic digestion, biomass and hydro – alongside other energy infrastructure including long and short duration storage, low-carbon heat, cleaner transportation, and sustainable resource management across the waste and water sectors.

Within that, the Company will invest in growth assets in mature, lower-risk sectors which provide opportunities for capital growth, including construction-stage and late-stage development projects.

As part of the Company’s objective to strike a careful balance between generating income to support a growing dividend and delivering medium-term value creation, the Company will not target further material disposals of its well-established assets in the near-term. FGEN intends to exit from the existing growth assets in the portfolio in the medium-term once they have fully ramped up, with good progress being made on those assets in line with expectations. Rjukan is now in the final stages of construction with first harvest targeted for July, further offtake agreements have been signed at the Glasshouse facility as operations continue to ramp up, and the restructuring across the CNG platform better positions the overall venture for growth as the rollout of stations continues and volumes of gas dispensed increase.

In line with strict return criteria, the Company will continue to monitor market conditions and assess opportunities as they arise.

Further detail on strategic priorities will be provided at the FY 2025 results webinar in June.

Investment manager fee structure update

The Board is very conscious of the need to deliver excellent value for shareholders as well as excellent returns over the long term. To that end, last year both the basis for calculation of investment management fees was changed to net asset value, and the fee rate charged was also reduced. Now, we can announce that the basis of calculating fees is further adjusted to better align the interests of the investment manager, Foresight Group LLP, with those of shareholders.

From a proposed date of 1 October 2025, fees will be calculated 50% based on net asset value and 50% on market capitalisation (the latter element capped at net asset value). This is estimated to provide an annualised saving of over £800k on the current NAV-based fee arrangement, a c. 13% reduction. Since 30th September 2024, prior to the previous change, this 50:50 blended fee arrangement will result in FGEN reducing investment management fees by c. 34%. 

While the Board is pleased to deliver this change, which represents a material reduction in operating costs, it is strongly committed to exploring all possible ways in which the cost of managing FGEN can be lowered further in the future to the benefit of the Company’s shareholders.

NAV performance

	NAV per share
NAV at 31 December 2024	107.4p
Dividends paid in the period	-2.0p
Power price forecasts	-0.1p
Portfolio performance	-0.6p
Review of maintenance expenditure	-0.7p
Uplift from share buy-back programme	0.5p
Other movements (including discount rate unwind less fund overheads)	2.0p
NAV at 31 March 2025	106.5p

Valuation factors

Power price forecasts

The Company’s high degree of contracted revenues and controlled exposure to merchant power prices through selective asset diversification provides a low exposure to fluctuations in market pricing. As a result, the Company experienced a low NAV per share impact of -0.1 pence in the period to 31 March 2025.

Portfolio performance

Portfolio performance was below forecast for the three-month period ended 31 March 2025, primarily due to a period of lower-than-expected solar irradiance and wind speeds, as well as downtime due to an unplanned outage at the Company’s Italian energy-from-waste investment.

FGEN’s diversification strategy means the fund is resilient against unpredictable weather patterns, with a 10^th consecutive year of record cash distributions received from the portfolio – driving a full year 2025 dividend cover of 1.32x, marginally exceeding guidance issued in the 30 September 2024 report (“above 1.20x”).

Review of maintenance expenditure

As part of the regular review of maintenance requirements across the portfolio, budgets have been increased across the foodwaste anaerobic digestion facilities at Bio Collectors and Codford Biogas, leading to a reduction in NAV per share of -0.7 pence.

Capital allocation and discount management

The board remains acutely aware of the challenging backdrop that affects the Renewable Infrastructure sector and the Company, with the sector continuing to trade at a material discount to NAV. An active discount management strategy has been implemented during the period, supported by disciplined capital allocation measures incorporating asset disposals, repayment of debt and share buybacks.

Gearing

In line with the Company’s stated approach to capital allocation, FGEN continues to maintain one of the lowest levels of gearing in the sector. As at 31 March 2025 total gearing was 28.7%, with the Company’s Revolving Credit Facility (“RCF”) £99.3 million drawn.

Post year end, the Company reduced the size of its RCF from £200 million to £150 million, providing an annual cost saving of £0.4 million. The remaining RCF continues to provide ample headroom to cover outstanding portfolio commitments and value enhancement projects as well as the remaining payments for the Company’s well progressed construction and early-stage operational investments.

Share buyback programme

As part of the ongoing share buyback programme, the Company purchased 9,746,891 shares in the quarter, increasing the NAV per share by 0.5 pence. Since its inception on 15 August 2024, the initial buyback programme has returned a total of £19.2 million to shareholders by 31 March 2025. The Company also announced on 31 March 2025 its intention to extend the buyback programme to a total maximum aggregate consideration of £30 million, via a further £10 million being allocated to the buyback programme funded from the Company’s own resources in accordance with its stated approach to capital allocation.

Dividend

Following the earlier announcement of a final quarterly interim dividend of 1.95 pence per share for the period from 1 January 2025 to 31 March 2025, the Company will have paid a total of 7.80 pence per share in respect of the year ended 31 March 2025, in line with the dividend target set out at the start of the year.

Financial performance of the portfolio continues to be strong, with dividend cover of 1.32x for the year to 31 March 2025, and the Board is pleased to announce an 11th consecutive annual increase in the dividend target to 7.96 pence per share for the year to 31 March 2026, a 2% uplift on FY 2025. This dividend represents a yield of 10.4% on the closing share price at 2 June 2025.

Diary