Those who want to look past the UK have plenty of options.

19th August 2026

by Dave Baxter from interactive investor

The humble UK equity income fund has done well by investors lately, with some decent returns made and some good payouts still available. 

But diversification is still a virtue, and other equity regions can also offer a decent level of income.

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Global income funds (whose top holdings we recently analysed) are one option, but so are portfolios with a more granular approach.

Here, we set out some of those names focused on a specific market that have made big recent payouts – and how the options available differ.

To give a rough sense of the dividends delivered, we have screened for the funds in a given region that would have paid out the most so far this year, had you invested a £10,000 lump sum in late December 2025.

This is just a snapshot of how different funds have fared, but does give us a sense of what’s on offer.

Asia and the emerging markets

The UK market is known for its impressive dividend yields, and it’s Asia and the emerging markets that have competed best on this front. 

Plenty of funds offer chunky yields – and have also generated some stellar returns in the last year thanks to an artificial intelligence (AI)-led market rally.

If we look at those funds with higher payouts in 2026 we are immediately met with a familiar name.

Henderson Far East Income Ord 

HFEL

 stands out with a payout of almost £780 – and certainly has a fanbase thanks to its almost 10% share price dividend yield.

The trust’s shares tend to trade on a small premium to net asset value (NAV) and it’s consistently among the most popular investment trusts among ii customers (as judged by real-time buys).

Fund	Dividend payout (£)	One-year return (%)	Five-year return (%)
Henderson Far East Income Ord HFEL	781.7	23.3	41.4
Aberdeen Asian Income Fund Limited AAIF0.	758.71	39.6	80.7
JPMorgan Asia Growth & Income Ord JAG	541.76	52.4	61.5
Schroder Asian Income Maximiser Z Inc (B52QVQ3)	492.36	33.7	66.8
Guinness Asian Equity Income Y GBP Dist (BDHSRF1)	396.35	11.4	46.7
BlackRock Frontiers Ord BRF	379.23	17.3	96.5

Note: Dividend payout is YTD in 2026, based on £10,000 lump sum invested in late December 2025. Source: FE Analytics, 18/08/26. Past performance is not a guide to future performance.

As we’ve written before, the trust is not without its failings. 

It tends to lag its rivals in the Association of Investment Companies (AIC) Asia Pacific Equity Income sector pretty notably by total returns, meaning investors are sacrificing a good chunk of overall performance in the name of bigger dividends.

Having said that, many funds in the region are currently beholden to the fortunes of names like Taiwan Semiconductor Manufacturing Co Ltd ADR 

TSM

that have a huge presence in the market.

Henderson Far East Income’s manager has argued that he is taking a more defensive approach and is less reliant on the AI trade for returns.

This argument was supported by the fund’s performance in a recent sell-off for such stocks.

As the table shows, rivals Aberdeen Asian Income Fund Limited 

AAIF

 and JPMorgan Asia Growth & Income Ord 

JAGI

have had a much stronger showing in the last 12 months. 

But that has likely come from greater exposure to the three stocks dominating the market, and potentially most exposed to a pullback.

Henderson Far East Income had 14.7% of its portfolio invested in TSMC, Samsung Electronics Co Ltd DR 

SMSN

 and SK hynix Inc ADR 

SKHY

 at the end of June. 

That figure came to around 34% for Aberdeen Asian Income, and to 34% for JPMorgan Asia Growth & Income (if at the end of July for the latter).

Note that different forms of income investing are on display here.

The JPMorgan trust uses an enhanced dividend policy, paying out a set proportion of NAV over a year and being less reliant on companies paying it dividends.

Meanwhile, both Schroder Asian Income Maximiser Z Inc (B52QVQ3) and Henderson Far East Income write covered call options, giving other investors the right to the gains on a stock above a certain price, for a fee. 

That means they generate extra income but do sacrifice some capital gains in rising markets.

For those who are interested, we also include BlackRock Frontiers Ord 

BRFI

which invests in riskier “frontier” markets but has generated some good returns in recent years. 

It is paying out some income, which might sweeten the deal for investors.

The markets it has the most money invested in are the United Arab Emirates, Saudi Arabia and Kazakhstan.

Europe

Another region with some decent dividends is Europe.

Here, one of JPMorgan’s trusts stands out again thanks to its enhanced dividend policy, while also having generated some good total returns.

Fund	Dividend payout (£)	One-year return (%)	Five-year return (%)
JPMorgan European Growth & Income Ord JEG	618.57	25.7	102.8
UBS MSCI EMU Value UCITS ETF EUR dis GBP UB171.27	407.27	23.9	101.2
Montanaro European Income £ Inc (B3Q8KY2)	347.38	4.1	12.2
iShares Euro Dividend ETF EUR Dist GBP IDVY0.82	318.83	21.7	64.7

Note: Dividend payout is YTD in 2026, based on £10,000 lump sum invested in late December 2025. Source: FE Analytics, 18/08/26. Past performance is not a guide to future performance.

Some AI momentum can be seen in the composition of this fund, with semiconductor stock ASML Holding NV 

ASML

 accounting for 7.2% of the portfolio. 

Other position sizes are much smaller and some of the top names will be familiar to investors, from Nestle SA 

NESN

 to Siemens AG 

SIE.

The fund has a good spread of regional exposures, with its top allocation (to Germany) accounting for a relatively low 18% of the fund.

Not everyone will be a fan of exchange-traded funds (ETFs) as a source of a yield but two names do make the cut here. 

There’s the UBS MSCI EMU Value UCITS ETF EUR dis GBP 

UB17

which might owe its decent payout to a 45% allocation to financials stocks, plus the iShares Euro Dividend ETF EUR Dist GBP 

IDVY

The latter has an even higher allocation to the financials sector, at 54% of the portfolio.

American dreams

The US is not an obvious hunting ground for income investors but one fund has done pretty well on this front. 

The BlackRock American Income Trust Ord 

BRAI

 trust has paid out more than £500 so far this year based on the £10,000 lump sum mentioned earlier.

This is a value fund, benchmarked against the Russell 1000 Value index, and seeks to provide diversification against the Magnificent Seven stocks.

Fund	Dividend payout (£)	One-year return (%)	Five-year return (%)
BlackRock American Income Trust Ord BRA	502.19	47.8	88.2
First Trust US Equity Income ETF A GBP UINC	240.64	27	68.2
Schroder US Eq Inc Mxmsr Z Inc £ (BYP24Z1)	229.65	17.7	67.5

Note: Dividend payout is YTD in 2026, based on £10,000 lump sum invested in late December 2025. Source: FE Analytics, 18/08/26. Past performance is not a guide to future performance.

It also uses BlackRock’s “Systematic Active Equity” investment process, which in its own words “combines human insight with the power of big data, machine learning and AI”. 

This process involves analysing vast amounts of data and seeking to exploit market inefficiencies and create a diversified portfolio.

In practice, the fund doesn’t stray too far from its value-oriented benchmark and also has plenty of Magnificent Seven exposure. 

Amazon.com Inc 

AMZN

 accounts for 6% of the fund, with Apple Inc 

AAPL

 on 5% and Microsoft Corp MSFT on 3.8%. 

Other top holdings include Berkshire Hathaway Inc Class B 

BRK.B

 JPMorgan Chase & Co 

JPM

 and Exxon Mobil Corp (NYSE:XOM).

Note, again, that the likes of income ETFs and “maximiser” funds do generate some income, if much less.

Japan

The Japanese market has continued to generate great returns this year but dividend generation still remains relatively modest, at least from the funds available to UK investors.

Here we see a couple of very different names make the table. There’s Schroder Japan Trust Ord 

SJG

which nowadays uses an enhanced dividend policy, and Nippon Active Value Ord 

NAVF

Fund	Dividend payout (£)	One-year return (%)	Five-year return (%)
Schroder Japan	292.67	39.9	119.9
Nippon Active Value	269.27	4.5	107.7

Note: Dividend payout is YTD in 2026, based on £10,000 lump sum invested in late December 2025. Source: FE Analytics, 18/08/26. Past performance is not a guide to future performance.

The latter, much likes its rival AVI Japan Opportunity Ord 

AJOT

buys into companies further down the market cap spectrum and agitates for changes that should boost returns. 

It’s arguably a good way to tap into the theme of corporate reform, and the proliferation of shareholder-friendly measures from companies.

Dividend income is on offer from some troubled names, writes Dave Baxter.

27th August 2026

by Dave Baxter from interactive investor

Once a fashionable part of the investment universe, so-called alternative assets have run into all manner of problems in recent years.

Higher interest rates, combined with issues specific to the investment trust space, have dealt a bad hand to funds focused on areas such as renewable energy infrastructure, property and (to some extent) private equity.

And with plenty of disruption and consolidation still occurring here, bargain hunting for alternatives trusts has become a risky business.

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And yet these assets stand out most notably on the income front. 

At a time when gains in equity markets have pushed down the dividend yields available, alternatives still offer some juicy numbers. 

Many come with yields in either the double digits or the high single digits.

Even if overall performance is poor, some investors would argue that they are getting “paid to wait” through such chunky payouts.

There’s plenty going on with those names that do yield a lot, and many such funds are already in the process of winding up. Here, we look at some of the high yielders that are still active and assess their prospects.

Be wary of wind-downs

Investors can very easily look at investment trust share price dividend yields, for example using the Association of Investment Companies (AIC) website.

But it’s good to remember that high yields can be a sign of trouble, and that some of the funds standing out here are either in some sort of trouble, or looking to wind down.

A glance at some of the names with the highest yields confirms this. 

Take Gore Street Energy Storage Fund Ord  GSF

which comes with a 14.5% yield but has struggled on the performance front and is now facing calls to wind down from the US activist Saba Capital, as one example.

Elsewhere “high-yielding” names like 

NextEnergy Solar Ord  NESF

 Aquila European Renewables Ord  AERI

 and GCP Asset Backed Income GABI are all looking to wind up.

There may be an argument for buying into a heavily discounted trust that is set to wind down – but this could ultimately be a trying experience. 

Investors may have to wait for years to see their capital returned, especially when it comes to funds like these that hold illiquid assets.

High-yielding names still in the game

Below we list 10 funds that come with punchy yields and that are not in the process of winding down. 

Half the names hail from the troubled renewable energy infrastructure sector, with some additional appearances from debt and private equity vehicles.

To start with renewables, the highest yielder is the very specialised Foresight Solar Ord  FSFL

The fund has not dodged the issues blighting its sector, with a recent trading statement pointing to a 4.4% drop in portfolio net asset value (NAV) for the first half of 2026, thanks to the effect of rising bond yields and falling near-term power prices. 

Iain Scouller, an analyst at Canaccord Genuity, described the update as “disappointing”.

“There is no update on any portfolio sales, and we suspect shareholders would like to see a Bluefield Solar style take-private transaction,” he said.

“However, we think that is easier said than done and if an offer materialised for Foresight Solar, it would probably be at a much higher discount than the 9% for Bluefield Solar Income Fund  BSIF given Foresight’s poorly performing non-UK assets.”

Source: AIC, 26 August 2026. Past performance is not a guide to future performance.

Another specialist name comes in the form of Greencoat UK Wind  UKW

a popular name among ii customers. 

The trust has had some good fortune in recent times: its NAV was slightly up over the first half of this year and its level of dividend cover has improved. That’s good news after a 2025 in which low wind speeds hurt performance.

Given their reliance on one technology or energy source, the specialist renewables funds can be pretty volatile. 

But the more diversified names also offer good yields even if they face a similar challenge, to sell assets at a decent price and reduce debt levels.

Here, take Octopus Renewables Infrastructure Ord  ORIT

which launched something of a turnaround plan in late 2025 aimed at selling assets, buying back shares and reducing debt, as well as investing in higher-returning assets.

The fund, which has around half its portfolio in solar assets and most of the balance in onshore and offshore wind, has seen its NAV fall in the second quarter of 2026 and has continued to see its shares struggle.

Conversely, we have seen something of a resurgence for Foresight Environmental Infra Ord  FGEN

Greencoat Renewables  GRP

and even Renewables Infrastructure Grp TRIG shares in the last year, in part thanks to investors paying more attention to the sector amid conflict in the Middle East.

But investors should pay close attention to how the funds are invested and how, for example, their plans to offload assets are progressing. TRIG has argued that it is doing well on that front, as it seeks to win over investors in the wake of last year’s botched attempt to merge with HICL Infrastructure PLC Ord  HICL

On the portfolio composition note, Foresight Environmental Infrastructure stands out for being especially well diversified. 

While some of the generalist funds tend to mainly invest in solar and wind, this fund has quite a mixed portfolio. Wind accounts for 23% and solar makes up 11%, but the fund also focuses on anaerobic digestion, biomass, energy from waste and hydro power.

Beyond renewables

Those tired of the renewables sector can bag some big yields elsewhere, from sectors with very different prospects.

First, it’s worth noting that debt funds continue to offer some big yields, with the popular TwentyFour Income Ord  TFIF

 and CQS New City High Yield Ord  NCYF

both in the table. These funds have, unusually enough, managed to combine a high yield with strong total returns in recent years.

But investors are certainly paying a price for this, with shares in both trading at a premium to NAV.

The TwentyFour Income portfolio offers exposure to various forms of debt, from collateralised loan obligations to asset-backed securities and residential mortgage-backed securities. The fund also diversifies by the maturity, credit quality, and geography of the debt it holds.

There is an appeal to such a sector, and it should offer diversification to equities and other assets. But investors may well worry about the idiosyncratic risks that could come with such esoteric assets.

It’s finally worth pointing to the presence of a private equity fund, Partners Group Private Equity Ord  PEY

in the table.

Like some of its rivals, it does pay out a dividend, although this can be a fraught model because this can sometimes involve paying from capital, and from an illiquid asset class.

The fund has also had a tough few years, and an update published today showed that its NAV had fallen by 8.6% on a total return basis in the first half of this year. However, the board argued that realisation activity, or the level of asset sales, “remained robust”, accounting for some 14% of net assets during this period.

As is often the case with seeking out the highest yields, investors will encounter some troubled names. But these might present a buying opportunity for the brave, and patient, individual.

The SNOWBALL has a comparator share VWRP, where 100k was nominally invested on the same day as the SNOWBALL started. The comparison being what you would receive if instead of having your own Snowball, you decided to retire using the 4% rule or to buy an annuity.

Current value of VWRP £171,792, not too shabby.

An annuity is a huge gamble with your retirement plans as there is no way of knowing what interest rates will be when you retire.

Canada Life figures show the 65-year-old with a £100,000 pension pot could buy an annuity linked to the retail price index (RPI) that would generate a starting annual income of £3,896. That’s up from £2,195 in the New Year following a 77% spike in rates this year.
Oct 22.

Current annuity on £171,792 > £12,025 but you have to surrender all your capital, so not an option for the blog.

Using the 4% rule a ‘pension’ of £6,871.00.

The SNOWBALL will earn income of 12% this year on seed capital > 12k.

If we now jump forward ten years, the SNOWBALL will have income of 24% on seed capital, hopefully in less than ten years.

VWRP would need an equivalent value of £600k. GL with that, if that’s your plan.

Fortunately for you and me, the financial markets aren’t 100% efficient. And some corners are even less mature and less combed through than others.

My name is Brett Owens and I’m an unabashed dividend investor.

These corners provide us contrarians with stable income opportunities that are both safe and lucrative.

There are anomalies in high yield. In an efficient market, you wouldn’t expect funds that pay big dividends today to also put up solid price gains, too.

We’re taught that it’s an either/or relationship between yield and upside – we can either collect dividends today or enjoy upside tomorrow, but not both.

But that’s simply not true in real life. Otherwise, why would these monthly payers put up serious annualized returns in the last 10 years while boasting outsized dividend yields?

For example, take a look at these 5 incredible funds that pay monthly and soar:

This is the key to a true “Monthly Payer Portfolio” – banking enough yields to live on while steadily growing your capital. It’s literally the difference between dying broke and never running out of money!

But I’m NOT suggesting you run out and buy these funds.

Some have been on my watchlist and in our premium portfolios over the years, but I mention them only as examples of the potential ahead.

I’ve crunched the numbers after the changes to the SNOWBALL and the first fcast for 2027 is £11,524.

All subject to change.

The next dividend for NESF is for the favourable summer months and after the dividend is earned the share may have to be sold, although there may be news before then as they are winding down/up.

To be added to the dividend fcast will be dividends from the cash re-invested, for the remainder of this year around 4k which should equate to income to be added to the total for next year of another £300.

If the SNOWBALL earns 12k next year, as this is re-invested there will be some more income from the cash re-invested.

The target is the total for the year 2031. As always expect the unexpected.

GL with your Snowball

I’ve bought for the SNOWBALL 10256 shares in PHP for 10k.

Current yield 7.3%. The plan is to collect the next dividend and then re-invest in a higher yielder to achieve next year’s target.

Next xd date early October.

Barclays raises Primary Health Properties target to 115 (110) pence – ‘Overweight’

When the American market opens, I’m going to add 1k to PMT.

Very high risk but the SNOWBALL is ‘risk on mode’ until it achieves repeatable earnings of 1k a month/3k a quarter. When that target is achieved the risk for the SNOWBALL will be lowered. To achieve 12k of income the SNOWBALL needs to earn more dividends to buy more shares to earn more dividends.

I’ve sold the SNOWBALL’s AIRE shares for a loss of £9.00. The bid from AEW could still happen but it’s not certain and also a lot of water has to pass under a lot of bridges, even if it happens.

Whilst making a capital gain can mean buying more shares that pay a dividend, having banked the dividend from AIRE, it’s currently ‘dead’ money.

AEW UK REIT plc (“AEWU” or the “Company”)

No Intention to Bid Statement

On 16 July 2026, the Company announced that it was considering a possible all-share offer to acquire the entire issued and to be issued share capital of Alternative Income REIT plc (“AIRE”) (the “Possible Offer”). Following Glenstone’s public statement that it would not support an offer from AEWU and subsequent attempts to engage with Glenstone to discuss the merits of AEWU’s proposals, notwithstanding the indicated support from the board of AIRE, AEWU confirms that it does not intend to make a firm offer for AIRE.

Is a revival on the cards for these high-yielding trusts?

REITs have struggled amid interest rate rises, but with many now trading at bargain-basement prices and with tax efficiency on their side, David Prosser explains why now could be an attractive time to invest.

25th August 2026

by David Prosser from interactive investor

Are REITs due a revival? Real estate investment trusts (REITs) have struggled in recent times, with a challenging economic environment weighing down on valuations, but some analysts are now optimistic the sector is bottoming out. 

With many funds trading at bargain-basement prices – and the tax treatment of REITs remaining attractive – now could be the moment to consider a return to the sector, at least for selective investors.

First the basics. REITs offer exposure to portfolios of property assets – usually in the UK – and are structured to distribute at least 90% of the rental income they earn from these assets to their shareholders. 

As long as they hit that threshold, REITs pay no corporation tax on their profits. 

Instead, shareholders pay income tax, rather than dividend tax, on the distributions they receive, as if they owned the underlying properties themselves.

REIT shares can be held inside an individual savings account (ISA), in which case dividends are tax-free.  

In addition, some REITs are incorporated in the Channel Islands, in which case there is no stamp duty to pay when buying their shares. 

Challenging times

So far, so good, but tax efficiency is not reason enough alone to justify investment. And in recent years, the investment case for property more broadly has been challenging – mostly because the period since the Covid pandemic has largely been one of rising interest rates

Such an environment – or even just the expectation of higher borrowing costs – can be a killer for all investors in property – including REITs.

The first problem is that since most property, whether residential or commercial, is acquired with at least some debt, demand will fall when debt becomes more expensive. That hits the capital value of property assets.

Also, if you’ve already taken on debt to finance property investments, you may now have to pay more to service it. 

With REITs, explains Emma Bird, head of investment trust research at Winterflood, there have been concerns “regarding the financing structures of some investment trusts – for example if they have a large proportion of floating rate debt or material upcoming refinancing requirements, which would likely result in significantly increased debt costs”. That could hit their ability to pay dividends.

A third challenge is that higher interest rates mean the income you can earn from gilts – regarded as risk-free securities given that they’re issued by the UK government – will also increase. The yield on a UK 10-year gilt currently comes to around 5%.

Investors naturally want a premium over gilts when they invest in risker assets such as REITs, so they therefore hold back on investing until the share price sinks to a level where the yield rises enough to restore that premium.

All of which has spelled trouble for REITs. 

At the beginning of the year, the Bank of England’s Monetary Policy Committee (MPC) was expected to reduce interest rates further over the course of 2026, having made four cuts in 2025. 

But fears of the inflationary impact of war in the Middle East – amid rising energy prices in particular – changed the dynamic. 

By the spring, the MPC was tipped to return to raising rates, as it did consistently from 2022 to 2024 to counter inflation. 

Why buy now?

No wonder many funds have struggled. The average UK Commercial Property investment trust delivered a negative return of 4.5% over the five years to mid-August according to the Association of Investment Companies (AIC). 

Shares in these funds now trade at an average discount to the value of their underlying assets of almost 22%.

Still, perhaps we are finally at a turning point, with some economists pointing out that the inflationary impact of the Iran conflict has been less severe than expected. 

That potentially mitigates the need for higher interest rates – particularly if a Middle East peace deal can be reached.

Moreover, property provides important diversification benefits for investors keen to manage risk by reducing their dependence on conventional assets such as equities and bonds. 

And the income generated by many REITs looks attractive – at current share prices, the average UK Commercial Property fund yields 7.84%, the AIC reports.

“Now could potentially be an attractive time to invest in property investment trusts, with discounts remaining wide in many cases,” suggests Bird. 

“In a more benign interest rate environment, possibly facilitated by a resolution to the Iran war, we would expect to see improvements in underlying asset valuations.”

She also points out that the sector is beginning to see further takeover speculation and deals – because large institutional investors and property companies think REITs are too cheap. “We would also expect downside discount risk from current levels to be limited to an extent by the potential for M&A activity, which has been a common feature of the sector recently, providing somewhat of a floor under valuations.”

The sector has seen lots of consolidation already in recent years but more potential deals are on the table – including for names such as Alternative Income REIT Ord  AIRE

Still, don’t assume a different interest rate environment will shift the dial for REITs, which face other problems too. 

One worry is that in this ongoing period of slow economic growth, demand for most types of commercial property will suffer. 

In a lacklustre economy, businesses rent less office space, retail outlets close and industrial premises operate below capacity.

Also, some areas of commercial property are struggling with deep-seated structural problems. 

For example, high streets in most towns in the UK have fared poorly in the face of competition from online shopping; that’s not conducive to robust returns from investments in retail premises. 

Care homes: one industry voice believes there’s potential for strong long-term returns as the care home market continues to experience rising demand, with new supply failing to keep up.

Treading carefully

On this basis, analysts urge investors to think carefully about the type of exposure individual REITs offer.

Funds offering access to logistics assets – warehousing, for example – may be preferable to those owning high street shops.

There is also growing interest in REITs that own digital infrastructure assets such as data centres.

“REITs are an area where taking an active approach can add value,” says Alex Watts, senior investment analyst at interactive investor.

“Skilled managers can identify mispriced opportunities, navigate a rife M&A landscape, differentiate between sectors’ and regions’ growth prospects, and assess the strength of individual balance sheets, asset quality and management teams.”

One question for investors, adds Bird, is whether they want a REIT that invests broadly across the UK commercial property sector, or a fund that takes a more specialised approach. Investors new to REITs may prefer the former approach, although certain types of asset have specific appeal.

“For diversified UK commercial property exposure, we are currently recommending Custodian Property Income REIT Ord  CREI” she says.

“This fund invests across a range of sub-sectors, with a focus on smaller lot sizes, which means that the portfolio is well diversified, reducing asset- and tenant-specific risk.”

The focus on smaller properties also provides a yield advantage as the fund’s target assets are off the radar of most institutional investors, improving the supply and demand dynamics, Bird points out.

Custodian Property Income currently offers a prospective dividend yield of more than 7%.

“For more specialist exposure, we think Target Healthcare REIT Ord  THRL

provides a compelling proposition,” Bird says.

“There is potential for strong long-term returns supported by long-run fundamentals, as the UK care home market continues to experience structurally rising demand, with new supply failing to keep pace.”

Other options

Other possibilities include LondonMetric Property  LMP

tipped by several analysts in recent weeks.

The fund’s focus on logistics – and particularly last-mile distribution – is one attraction. But the fund has also grown in size by taking opportunities to buy other real estate businesses at attractive prices.

Tritax Big Box Ord  BBOX

another logistics-focused REIT also attracts attention, and has been winning praise following a strong set of results in August.

“With supportive market fundamentals including strengthening demand, tightening supply and rents continuing to grow ahead of inflation, we are well placed for 2026,” says investment director Bjorn Hobart.

“Our focus remains on disciplined capital allocation and recycling into higher-return opportunities to ensure long-term value creation for shareholders.”

Watts, meanwhile, suggests a slightly different approach.

“TR Property Ord TRY

 takes a hybrid approach to pan-European property, meaning it invests in listed European property-related securities, such as REITs, but is also permitted an allocation (of up to 15%) to physical property,” he explains.

“The benefit of the hybrid approach is that the listed property securities component provides daily liquidity while the closed-ended structure also means investments don’t need to be sold to fund redemptions.”

The latter point is important. One advantage of REITs – and investment trusts more generally – is that their structure is well-suited to illiquid assets such as property. Managers look after a fixed pool of assets, with investors getting exposure to this pool by buying shares in the fund on the stock market.

By contrast, open-ended funds must cope with inflows and outflows of investors’ money according to demand and supply for the fund. In the past, this has seen some funds face serious problems at times when large numbers of investors have demanded their money back, leaving managers trying to sell property in a hurry to fund withdrawals.

Backed by resilient business models, dependable cash flows, strong dividend track records, and attractive growth opportunities, these two Canadian stocks could be compelling buys for income-focused investors right now.

Posted by Rajiv Nanjapla

Published August 19

BNS TRP Key Points

• Bank of Nova Scotia and TC Energy offer attractive dividend opportunities for long-term investors, supported by their resilient business models, stable cash flows, and strategic growth initiatives.
• With Scotiabank’s diversification and strategic repositioning, along with TC Energy’s predictable earnings and expanding infrastructure, both companies are well-suited for consistent dividend growth and enhanced wealth creation.

Dividend-paying companies return a portion of their profits to shareholders through regular dividend distributions, allowing investors to benefit from both capital appreciation and a steady stream of income. By reinvesting these payouts, investors can further enhance their long-term return potential by harnessing the power of compounding. However, dividends are not guaranteed and remain subject to a company’s financial performance and management’s discretion. Therefore, investors should focus on high-quality dividend stocks backed by resilient businesses, sustainable cash flows, and a strong track record of shareholder returns to improve their prospects for long-term wealth creation.

Against this backdrop, let’s look at two quality dividend stocks that are ideal for long-term investors.

Bank of Nova Scotia

Bank of Nova Scotia (TSX:BNS) could be an attractive dividend stock for income-focused investors, supported by its diversified financial services operations and broad geographic presence. Its diverse revenue streams provide a relatively stable earnings base, enabling the bank to maintain a long history of shareholder distributions, including uninterrupted dividend payments since 1833. Scotiabank has also increased its quarterly dividend at an annualized rate of approximately 4.5% over the past decade and currently offers a healthy yield of 3.6%.

Looking ahead, Scotiabank is pursuing a strategic repositioning to expand its higher-return North American operations while reducing exposure to riskier, lower-return Latin American markets. This transformation could strengthen the stability and profitability of its earnings over the long term, supporting more sustainable dividend growth. As part of this strategy, the bank is pursuing the acquisition of MapleMark Bank to strengthen its presence in the fast-growing Dallas market. It is also seeking to acquire the remaining shares of Scotia Group Jamaica Limited, which could provide greater control over the business while improving capital allocation and operational efficiency.

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Meanwhile, a relatively higher interest-rate environment could continue to support Scotiabank’s lending operations and net interest income. The bank’s recently announced share-repurchase program for up to 15 million shares through April 2027 could further enhance shareholder returns by reducing its share count by approximately 1.2%. Given its resilient business model, long-standing dividend record, and strategic growth initiatives, Scotiabank appears well positioned to continue delivering attractive income and shareholder returns, making it a compelling dividend investment for long-term investors.

TC Energy

Another attractive dividend stock is TC Energy (TSX:TRP). The energy infrastructure company operates an extensive natural gas pipeline network and a portfolio of power generation assets with approximately 4.7 gigawatts of capacity. Its highly predictable business model generates around 98% of earnings from regulated assets and long-term take-or-pay contracts, providing substantial cash-flow visibility. This stability has enabled TC Energy to increase its dividend for 26 consecutive years, while its shares currently offer a healthy forward yield of 4%.

Looking ahead, rising natural gas production across North America should continue to support demand for TC Energy’s pipeline infrastructure and related services. The company is also expanding its asset base to capitalize on these favourable industry trends. After placing approximately $2 billion of projects into service year to date, TC Energy expects to bring another $3.5 billion of projects online this year. Beyond that, the company has approximately $20 billion of additional projects in its development pipeline, providing a meaningful runway for long-term growth. Management expects adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) to reach $12.6–$13.1 billion by 2028, with the midpoint representing an annualized growth rate of approximately 5.4%.

With a resilient business model, visible growth opportunities, and a robust development pipeline, TC Energy appears well positioned to support continued dividend growth. These attributes make the company an appealing option for income-focused investors seeking reliable dividends and long-term wealth creation.