5 Dividends (up to 9.3%) Washington Doesn’t Want You to Know About

Brett Owens, Chief Investment Strategist
Updated: August 26, 2025

Don’t buy all the “America First” talk coming out of DC. Truth is, Uncle Sam’s recent moves are quietly making foreign bonds—especially the 5 bond funds (yielding up to 9.3%!) below—great again.

What I’m going to show you is having a real impact on the government, everyday borrowers and, not least, our biggest winners: those 5 foreign-bond funds.

Let’s start with Scott Bessent’s Treasury Department. These days, it’s doing something unusual: issuing 80% of federal debt on the short end of the yield curve.

The short end, tied to the Fed’s policy rate, is the rate at which banks lend to each other. It’s usually lower than the long end, pacesetter for most consumer and business loans. The long end is set by 10-year Treasury yields, which move opposite to these bonds’ prices—higher demand, lower yields; lower demand, higher yields).

I think you can see where I’m going here: Issuing more short-term debt saves the government billions in interest. In fact, US interest payments are already down year-over-year despite a ballooning debt load!

This was unheard of a few years ago. Treasury debt was traditionally issued at the long end of the curve, such as 10 and 30 years, and bought by pension funds and sovereigns.

Janet Yellen started the “print short” practice, and Bessent has quietly continued it. This also explains why Trump and Bessent want to put Powell out to pasture—they can save billions in interest and take control of the bond market!

There are two key takeaways for us here:

1. The share of issuance at the long end will likely fall as more debt is pushed short. This could put downward pressure on 10-year Treasury yields.
2. Banks can stash more (and cheaper) short-term debt on their balance sheets, where they can lend against it. That indirectly boosts the money supply.

Both of these are bullish for foreign bonds, as investors “read the room” and shop for higher yields beyond the US. It also weakens the greenback—another plus for foreign-bond funds, especially those that do not hedge for currency moves.

Let’s look at five ways to grab high yields from Bessent’s “back door” rate play. We’ll start with our least-favorite option and wind up with our best buy now.

5. Vanguard Total International Bond ETF (BNDX)

Dividend Yield: 4.3%

BNDX’s yield is about the same as that on a 10-year Treasury note. But you get a lot more diversification with this 4.3% payer, with 6,583 bonds in the portfolio.

The drawbacks? BNDX holds sovereign debt from developed countries, with France, Japan, Germany, Italy and the UK the top-5 regions. Not exactly soaring markets!

Plus, most of BNDX’s bonds are investment-grade. So they’re safe, but they’re also limited in terms of yield and bargain potential (not that algorithm-run BNDX would be able to take advantage of those anyway!).

Finally, BNDX is currency-hedged, so it won’t directly benefit from a falling greenback. And, as an ETF, it never trades at a discount to net asset value (NAV, or the value of its underlying holdings). But closed-end funds (CEFs)—like our top two picks below—can.

4. SPDR Bloomberg International Corporate Bond ETF (IBND)

Dividend Yield: 2.3%

In fourth is corporate-bond-holding IBND, which actually holds about 28% of its portfolio in the US, followed by France, Germany, the UK and Spain.

Credit quality is high here, too, as the bonds in the portfolio must be investment-grade. But that, again, means less dividend cash than we’d pull from lower-rated bonds. Moreover, IBND is not currency-hedged—a big reason why it’s crushed the hedged BNDX this year:

Falling Greenback Ignites IBND

That gives IBND more upside, but if we’re buying corporate bonds, we demand a far higher yield than 2.3%. And “ETF” means there’s no discount for us here, either.

3. iShares International High-Yield Bond ETF (HYXU)

Dividend Yield: 4.4%

HYXU yields nearly double what IBND does because it holds corporate bonds rated BB and below. That’s where the highest yields (and best bargains) live. The fund also holds bonds denominated in euros, British pounds and Canadian dollars—no hedge here.

The result? HYXU draws a 4.95% average coupon rate from its portfolio, covering its 4.4% yield. We also get diversification, thanks to HYXU’s 495 bonds. The average duration is also 2.9 years—long enough to stabilize its income and allow higher-paying bonds to be added if rates rise in the UK and Europe, home to most of its portfolio.

Why isn’t HYXU higher up my list? It’s a crowded trade, with so much money piling in that the fund has already returned 17% year-to-date, as of this writing:

HYXU Soars Out of Bargain Territory

And, of course HYXU is an ETF, not a CEF, so there’s no discount to NAV here, either.

2. Nuveen Global High Income Fund (JGH)

Dividend Yield: 9.3%

A 9.3% dividend that’s monthly paid and steady—now we’re talking!

Source: Income Calendar

As you can see, JGH’s payout has grown in the last five years (with a small, and understandable, retreat during the 2022 mess).

That high, and growing, payout comes from Chicago-based Nuveen, one of the world’s biggest investment firms, with $1.3 trillion under management and roots stretching back to 1898.

JGH holds corporate bonds and sports a mandate of keeping at least 65% of its portfolio below investment grade. That, as mentioned, is where the best bargains, and highest yields, live. And thanks to its human manager, JGH is well-positioned to take advantage.

That leaves us to enjoy JGH’s 9.3% payout and upside, thanks to the fact that it’s not currency-hedged. The sticking point? I’d like a bigger discount than the current 3.2%.

1. AllianceBernstein Global High Income Fund (AWF)

Dividend Yield: 7.1%

AWF, a holding in my Contrarian Income Report service, has been around since 1993 and is run by a five-person squad boasting an average of 22 years of experience.

Our team invests in everything from emerging-market sovereigns to US high-yield corporates. Right now, about 76% of the portfolio’s 1,227 holdings is in non-investment-grade corporates—right where we want it.

Moreover, its portfolio has an effective duration of just under three years, a happy medium that gives our team flexibility to adjust with the rate environment. Hedges? Nope. As the greenback falls, AWF directly benefits.

That’s one reason why we’re okay with AWF’s lower (for a CEF!) 7.1% yield. We also love the dividend’s consistency: It’s been solid in the last five tough years (those dips are special dividends, not cuts).

Source: Income Calendar

And how’s this for performance? AWF has returned 9% so far this year, and look at the 1,500%+ return it’s booked since its 1993 launch:

AWF Investors Keep Winning

For that, management’s fee is just 1% of NAV. The discount is just 2.4%, but we’re okay with that, given AWF’s track record. Plus, it’s narrowed in the last four months. I expect that markdown to keep closing as Bessent’s moves hit the greenback—and give foreign bonds a boost, too.

Ignore the Media’s Scare Tactics. Live on Dividends Alone. Here’s How.

Over the last few months, my mind has been fixed on one group of investors. Maybe you’re one of them.

I’m talking about folks who did everything right. They followed the “rules.” And yet they’re still wondering if they can afford to retire. Or stay retired.

These days, one headline out of Washington can send the markets into a tailspin—often immediately. Maybe you’re one of the unlucky ones who sold in early April. Then, a full-blown crash looked like it was coming—until stocks rocketed back (and then some).

Regardless, if you’re feeling uncertain about your financial future, I have a special Investor Bulletin I urge you to take a look at. It gives you my simple strategy for gaining the peace of mind—and steady income—you need to retire on dividends alone.

Sounds like a pipe dream, I know. But it’s more attainable than you think

How £10,000 today could become a £1,500-a-year second income by 2035

The buy-to-let market in the UK might not be in great shape. But Stephen Wright thinks property could still be a great way of earning a second income.

Posted by Stephen Wright

PHP 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.

We think earning passive income has never been easier

Do you like the idea of dividend income?

The prospect of investing in a company just once, then sitting back and watching as it potentially pays a dividend out over and over?

If you’re excited by the thought of regular passive income payments, as well as the potential for significant growth on your initial investment…

Motley Fool

UK investors looking for a second income should take a look at the property market. In particular, real estate investment trusts (REITs) could offer good opportunities. Right now, shares in a number of REITs come with dividend yields above 7.5%. And the returns could go up – rather than down – for the foreseeable future, although that’s not guaranteed. 

From £10,000 to £1,500 a year 

Investing £10,000 at 7.5% generates £750 a year. But by reinvesting the income at the same rate – into the same business or a different one – the annual returns can grow over time.

After 10 years of compounding returns at 7.5%, the annual income generated by a £10,000 investment increases to £1,437. And that’s only part of the equation.

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.

Through rent increases and portfolio expansion, the best REITs are able to grow their dividends over time. And this can further increase returns for investors.

REITs aren’t really known for their growth prospects and they have to manage their debt carefully. But there are a couple that have dividend yields above 7.5% that I think look resilient and are deserving of further research.

Supermarkets

Supermarket Income REIT‘s (LSE:SUPR) a stock I like. It comes with a 7.75% yield and most of the firm’s leases rise automatically with inflation, so investors shouldn’t lose out on that front.

The company’s largest tenants are Tesco and Sainsbury, accounting for around 75% of its rental income. And that kind of concentration is something to take note of.

The concern isn’t that either might default on their obligations – the chances of that seem to be pretty low. But it does weaken the firm’s negotiating position for renewing leases and this is a risk.

Strong occupancy rates and rent collection metrics however, suggest a good chance of getting the 7.75% dividend for some time. And that makes it worth considering for passive income investors.

Healthcare

Primary Health Properties (LSE:PHP) has a very different portfolio. It owns a collection of GP surgeries and there’s a 7.65% dividend yield on offer for investors who buy the stock right now

The firm’s currently acquiring Assura – the other major operation in the industry. The deal’s partly being financed using stock and this creates a risk if its share price falls. 

A lower share price means Primary Health Properties could end up using stock with a 7.6% yield to buy one with a 7% yield. But the combined business should eventually be in a strong position.

The company’s increased scale and reduced competition ought to help it negotiate lower debt costs and higher lease renewals. As a result, I think it’s well worth a closer look.

Compounding returns

Both Supermarket Income REIT and Primary Health Properties currently come with unusually high dividend yields. But there’s no guarantee this will last.  If the stocks go up, I expect the yields on offer to fall. And that means investors wanting a return above 7.5% might have to turn their attention elsewhere. 

I think though, that investors who buy either stock today have a decent chance to collect income for some time. And reinvesting that could lead to significant income in the future.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Stephen Wright has no position in any of the shares mentioned. The Motley Fool UK has recommended J Sainsbury Plc, Primary Health Properties Plc, and Tesco Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

3 Warren Buffett concepts that can be as useful when investing £100 as £100m !

Warren Buffett may be a multi-billionaire but that doesn’t mean his investing lessons can’t help investors on a far, far more modest budget!

Posted by

Christopher Ruane

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.

Warren Buffett did not become a multi-billionaire for no reason.

The Sage of Omaha has spent decades investing and building his wealth, learning many lessons along the way. Fortunately for other investors, he has been willing to share many of those lessons for free.

As a private investor with limited means, it can be easy to look at a billionaire and think they operate in a different universe.

In fact, though, one reason so many investors talk about Warren Buffett is that some of the lessons from his long investing career can be relevant for investors even on a very small budget.

Here are three of the ideas Buffett uses that I apply even when investing just a small amount.

Knowing what you know — and sticking to it

Warren Buffett has repeatedly talked about the importance of staying inside one’s circle of competence as an investor.

His point is that it does not matter how wide or narrow that circle is, but that staying inside it makes it more likely that one has the necessary knowledge to assess a possible investment.

Doing otherwise – putting money into something you do not understand – is not investing but mere speculating, in my opinion.

Focus on long-term competitive advantage

Businesses come and businesses go. Some, however, are here for the long run.

It can be hard to tell in advance what businesses might stick around and do well. When trying to do so, Warren Buffett looks for a competitive advantage or what he calls a ‘moat’ (because it can help fend off rivals in the way a moat at a medieval castle could help see off possible invaders).

To see this concept in action, consider his investment in Coca-Cola (NYSE: KO).

It operates in a market where demand is large and likely to stay that way. People will always be thirsty and want to quench their thirst.

But, as with many markets where there is large demand, there is also significant competition.

So Coca-Cola has spent decades building and reinforcing a series of competitive advantages. Its brand, supported by heavy advertising, is one. A proprietary formula for its flagship product is another.

But Coca-Cola’s moat runs deeper than just brand and product. Global reach gives it economies of scale, while its extensive distribution and bottling system would be difficult if not impossible for rivals to replicate.

Buffett is a smart enough investor always to consider risks as well as possible rewards. Coca-Cola’s product portfolio could see waning demand as health-conscious consumers switch away from sugary drinks.

But that is part of the point of competitive advantages: they can hopefully help a company navigate even a risky environment and do well.

Keeping emotions in their place

Buffett uses emotional language, often talking about businesses he loves.

But when push comes to shove, the billionaire investor has repeatedly proven himself willing to make tough, rational business decisions.

His focus as an investor is building wealth and that mean making tough decisions. Emotionally, that can feel difficult – but necessary.

Thursday 28 August

Aberdeen Equity Income Trust PLC ex-dividend date
abrdn European Logistics Income PLC ex-dividend date
Alliance Witan PLC ex-dividend date
Bluefield Solar Income Fund Ltd ex-dividend date
Henderson Smaller Cos Investment Trust PLC ex-dividend date
International Personal Finance PLC ex-dividend date
JPMorgan American Investment Trust PLC ex-dividend date
JPMorgan Global Growth & Income PLC ex-dividend date
LondonMetric Property PLC ex-dividend date
Premier Miton Global Renewables Trust PLC ex-dividend date
Rights & Issues Investment Trust PLC ex-dividend date

Trust Intelligence from Kepler Partners

Corridor of uncertainty

Anyone who is not a cricket fan will not know what is wrong with the above meme.

Can an alternative interpretation of discounts identify new opportunities ?

Ryan Lightfoot-Aminoff

Updated 14 Aug 2025

Disclaimer

This is not substantive investment research or a research recommendation, as it does not constitute substantive research or analysis. This material should be considered as general market commentary.

Early August saw a thrilling, albeit rather abrupt, end to English cricket’s summer of test matches with a rollercoaster, nail-biting defeat to India to level the series. These five games were vintage test cricket and a testament to its enduring appeal as a sport and spectacle. Whilst the ebbs and flows and challenges of patience and persistence will always be the main draw behind five-day test cricket, one of the most alluring elements (well, if the evidence of our offices is anything to go by) is the statistics.

The series was a fascinating one from a statistical angle, with numerous records broken in both bowling and batting stats, as well as combined scores. Taking any one of these stats in isolation could be used to show utter dominance by either team, especially with India’s batting stats, and, yet ultimately, the test will go down in the record books as a draw, which India just snatched by the narrowest of margins on the final day.

This use of statistics arguably draws many parallels with finance, where a variety of figures can be used to make a very compelling case for or against a certain investment. In our research notes, we undertake statistical analysis on a trust’s discount in particular, usually comparing the current level to its own history, as well as how it shapes up versus its peers. However, by combining these approaches, we can tell a different story, by revealing a trust’s relative rating versus its peers’, over time. This can identify potential discount opportunities that may have been overlooked using more straightforward analysis.

Opening the bowling

To try and identify these opportunities, we have gone through the AIC universe, excluding trusts with under five years’ worth of data, and sectors with fewer than three trusts or which make poor comparators, such as those including trusts currently winding up. We have compared each trust’s monthly discounts to the simple average of their peer group, looking at how this has changed over time. We have then taken the average of a trust’s relative rating over the five years and compared that to its current level. This has allowed us to identify trusts that have previously traded at a premium rating to peers, but now look cheap. Rather than looking at absolute discounts, this might be a better way to identify opportunities.

The table below shows the ten cheapest trusts on this metric across all sectors. They are ranked by the difference between the current discount to their peer group and its average over five years (given in the final column). The figure in the third column shows the five-year average rating relative to the peer group, with a positive figure indicating a premium. Using Lindsell Train as an example, it has, on average, traded at a 6.3 percentage point premium to its peer group average, yet it is currently trading 12.3 percentage points lower than this (therefore a 6% discount to the sector average). One of the most interesting trusts in this list is RIT Capital Partners (RCP). With a track record of trading on a premium, a consistent absolute discount has opened up in recent years, which is currently as wide as 27%. There has been plenty of turnover in the investment team, including the departure of the late Lord Rothschild, and so it is possible the discount will persist until a decent track record has been built up again. Notably, the recent half-year returns for the trust were positive, with particularly good returns in the directly owned private investments, three realisations being made at an average 112% premium to carrying value. Another notable entry in this table is Schroder Income Growth (SCF). SCF has performed well under the tenure of manager Sue Noffke, although in recent years the mid-cap bias has worked against it. Its discount looks attractive on both an absolute basis and in terms of its relative rating versus the sector, as our data highlights.

THE SCORECARD

Trust	AIC sector	Average relative rating	Average versus current
Regional REIT	Property – UK Commercial	-10.92	-14.87
ICG-Longbow Senior Sec. UK Prop Debt	Property – Debt	-9.94	-13.18
RIT Capital Partners	Flexible Investment	1.18	-12.47
Lindsell Train	Global	6.34	-12.32
Baker Steel Resources	Commodities & Natural Resources	-13.21	-10.77
Canadian General Investments	North America	-20.61	-9.8
Custodian Property Income REIT	Property – UK Commercial	6.99	-9.22
Schiehallion Fund	Growth Capital	18.12	-7.55
Partners Group Private Equity	Private Equity	6.05	-6.31
Schroder Income Growth	UK Equity Income	-0.31	-6.17

Source: Morningstar, as at 31/07/2025

There are a number of alternative asset classes represented in this chart, including property. We see several reasons behind this, stemming from the more volatile economic environment over the past five years. The earlier part of this period was dominated by near-zero interest rates, implemented to try stimulate economic growth during the pandemic. As economies reopened, though, spending returned and led to a spike in inflation, followed by an increase in interest rates to manage this, which led to wide discounts emerging in rate-sensitive assets. Many of these discounts have been steadily closing as rates have been cut and the outlook changed, creating some volatility in relative ratings.

It’s a similar story with Schiehallion (MNTN) in the growth capital sector. Managed by Peter Singlehurst and Robert Natzler, MNTN owns a portfolio of stakes in late-stage private businesses. The managers take a long-term time horizon, looking to capture the potentially transformative growth opportunities in this part of the market, ahead of listing. Examples of portfolio companies include ByteDance, the owner of TikTok, and SpaceX, Elon Musk’s space exploration company. As such, MNTN offers investors exposure to private companies with high-growth potential that would otherwise be out of reach for most investors. For much of the initial five-year period, the trust traded at a wide premium to NAV, although this was partly as a result of a highly concentrated shareholder base, meaning liquidity was incredibly thin. This changed as the trust’s C shares were converted into the main share class in September 2023; however, by this point, the trust was trading at a discount to NAV, occasionally at a wider level than the sector average. The relative rating has recovered a little since, but compared to the highs at the beginning of the period, it appears relatively good value on our metrics.

MNTM DISCOUNT VERSUS PEERS

Source: Morningstar

Picking gaps in the field

Further down the table, there are other interesting themes. One of the standout equity trusts on these metrics is Merchants (MRCH), a UK equity income trust managed by Simon Gergel and his team. The trust has traded close to NAV for much of the past five years, at an average level of -0.5% as a result of a combination of factors such as size, as it offers institutional investors good liquidity, its comparatively low costs, and above-market dividend yield. This is supported by one of the longest continuous records of dividend increases of any UK-listed company, at over 40 years. However, in 2025, the discount has twice widened significantly, first from January through to April, where it briefly narrowed later in the month, before widening sharply again to its current level of c. 7% (as at 01/08/2025). This latest move has come in a period where the broader UK equity income sector average has narrowed, from around 5% at the turn of the year to 3.4% now. Whilst this isn’t much in absolute terms, it is a notable change when considering it is an average of 18 trusts.

As a result of both moves, MRCH’s premium rating to the sector average has collapsed in the past nine months, from being 5.5 percentage points ahead in November 2024 to 3.2 percentage points behind as at the beginning of August 2025, which we have shown in the chart below. Whilst looking at MRCH’s discount in isolation might suggest value, we think it looks even cheaper when considering its relative rating.

MRCH DISCOUNT VERSUS PEERS

Source: Morningstar

Another example is JPMorgan Asia Growth & Income (JAGI), which traded at a sustained premium early in the five-year period under consideration, whilst the sector average was at a discount. However, as both Asian and UK markets sold off in 2022 as interest rates rose to tackle inflation, and as China persisted with its zero-COVID policy, JAGI fell to a discount where it has remained since. The level of discount, though, is considerably wider than the peer group average, meaning the premium rating has all gone. This has actually widened even more in the near term, with JAGI’s discount currently six percentage points wider than the peer group average, versus a five-year average of 2.9 percentage points.

JAGI DISCOUNT VERSUS PEERS

Source: Morningstar

JAGI is one of a number of growth trusts that stand out in our analysis. This is a result of the changing investing backdrop and interest rate environment mentioned above. As a general rule, growth strategies perform better in lower interest rate environments but struggle in periods of higher rates. As such, many growth-focussed investment trusts now trade at discounts to their peer group, having previously traded at premium ratings earlier in the five-year period, contributing to them standing out in our analysis.

The corollary is that some value trusts that were previously trading at discounted ratings to the peer group have since recovered strongly to trade at premium ratings. One such example is Invesco Global Equity Income (IGET), which has a notable value tilt to it, as is expected of an income-focussed vehicle. The trust traded at a discount to NAV and to the sector average for much of the past five years. However, in 2025, this sharply reversed, with the trust swinging to a small premium and on a vastly better rating than the sector average. IGET absorbed the assets of the three other share classes of the Invesco Select trust during the period, and it is possible there was an overhang of stock that has now cleared. However, the near-term performance has also been very strong, which may well have contributed to its rerating. In its annual report, to 31/05/2025, the trust demonstrated a NAV TR of 11.9%, versus the MSCI World Index TR of 7.4%.

The recovery in the share price in this period is even stronger, at an impressive 24.6%. This demonstrates how closing discounts can significantly contribute to shareholder returns and why identifying discount anomalies can be useful.

IGET PREMIUM VERSUS PEERS

Source: Morningstar

Aiming for boundaries

With several growth trusts showing up as statistical anomalies in our analysis, it is worth looking into whether this could change in the future. Interest rates have remained higher and for longer than initially expected, but are slowly coming down, providing a more positive backdrop. Furthermore, there are good prospects for AI to become a dominant theme of the next few years, which would be supportive to the tech sector, which often makes up a large portion of growth portfolios.

The potential recovery of growth-focussed vehicles has been a factor behind recent changes to the portfolio of the CT Global Managed Portfolio Trust (CMPG/CMPI). CMPG/CMPI was managed by industry veteran Peter Hewitt. He has retired and handed over management duties to Adam Norris and Paul Green on 01/06/2025, although he continues to assist with a handover until October 2025. The trust is a fund of funds with two share classes, one focussed on growth and one on income. The strategy enables the managers to exploit the numerous opportunities in the investment companies universe, including the discount opportunities that exist at present. In the past 12 months, the managers added to strategies with growth exposure beyond AI, such as those focussed on the energy transition or biotech, with recent additions including Scottish Mortgage (SMT) and International Biotechnology (IBT). Growth trusts were a significant contributor to performance in the past year, with holdings in two tech trusts doing particularly well overall.

Should growth strategies stage a comeback, our analysis has identified several trusts that are trading not only at a discount to their own averages, but also on a low relative rating to their peers. Examples include Smithson (SSON), which currently trades at a discount of c. 10% (as at 07/08/2025), and 1.5 percentage points wider than the peer group average, despite historically trading at three percentage points narrower. Similarly, Montanaro European Smaller Companies (MTE) has a current discount of c. 8% with the current level about one percentage point wider than the peer group average, despite historically trading at a 2.8 percentage-point relative premium.

Umpire’s call

Whilst this statistical analysis has shone light on some interesting discount opportunities, it has also highlighted some other interesting relative ratings, albeit not those trading at discounts. One example is Ashoka India Equity (AIE). This small- and mid-cap focussed trust has delivered exceptional performance since its inception in 2018, which, when combined with other factors such as the managers’ skin in the game, has meant the trust has traded at a premium through much of its existence. By contrast, peers have traded at a fairly persistent discount, leaving AIE having a high relative premium rating that has averaged 13.6 percentage points over the past five years. In the past few months, though, this gap has closed significantly as two peers, in a sector of four, have had strong share price rallies. One of these is arguably related to a tender offer plus the implementation of a new policy. As such, AIE’s premium rating to peers has narrowed significantly to just 5.9 percentage points, meaning it looks very favourable taking our metrics in isolation. However, as AIE continues to trade at or above par, any mean reversion of the relative rating would have to come from its peers’ discounts widening. Given some improved performance and shareholder-friendly measures, we think there are reasons to doubt that.

AIE PREMIUM VERSUS PEERS

Source: Morningstar

And that’s over bowled

With that in mind, we believe examining a trust’s relative rating to its peer group’s can be a useful additional tool to help provide context for how a trust’s discount has evolved over time. As positivity begins to creep back into the market and investment trust sector, discounts have begun to narrow, meaning some of the heavily discounted opportunities may have gone. Whilst there remain many very attractive discount opportunities still available, using additional statistics such as our relative ratings could help investors uncover these less obvious opportunities, and lead to strong total returns should they also close and the market continue to recover after a challenging couple of years.

Results analysis: Greencoat UK Wind

UKW’s disposals have strengthened confidence in the NAV, with dividend cover remaining resilient.

David Brenchley

Updated 14 Aug 2025

Disclaimer

Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by Greencoat UK Wind (UKW). The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

• Greencoat UK Wind’s (UKW) half-year results for the six months to 30/06/2025 saw the trust announce dividend cover of 1.4x for the first half, despite lower than budgeted wind generation. UKW’s target dividend per share stands at 10.35p for the full-year 2025, up 3.5% from 10p in 2024 and equates to a yield of c. 8.7 % on the current share price. The net asset value (NAV) per share fell c. 5.2% to 143.4p, due primarily to lower-than-budgeted cash generation and a reduction in forecast power prices.
• During the six-month period, UKW declared total dividends of 5.18p per share, including a 2.5p per share payment with respect to Q4 2024. The dividend is a key plank of UKW’s total return proposition, and the trust has now paid £1.3 billion in dividends to shareholders over its 12-year life, almost half of its current market capitalisation of c. 2.7 billion. In addition, UKW has generated £1bn of excess cash flow which has been re-invested in the company. UKW’s average dividend cover over its life is 1.8x.
• UKW generated £163 million in net cash in the six months to 30/06/2025, down c. 1.3% from the £165.4 million generated in the six months to 30/06/2024. Despite the fall in NAV, UKW has provided a total shareholder return of 140.7% since listing in 2013, or 7.4% annualised, the highest in its peer group. UKW aims to provide a 10% return to investors on NAV, net of all costs.
• On capital allocation, UKW reinvested £40 million to buy back its own shares during the period, which added 0.6p per share to the NAV. It has currently completed £131 million of share buybacks in total, at an average price of 130p per share. The trust’s second buyback programme, which was announced in February, provides for at least a further £69 million in cash to be allocated to share buybacks.
• Excess cashflow beyond that is likely to be applied to a reduction in UKW’s gearing. Aggregate group debt was c. £2.25bn as at 30/06/2025, equivalent to 41.5% of gross asset value (GAV), or c. 71% of NAV. The weighted cost of debt was 4.59% across a range of maturity dates (November 2026 to March 2036).
• UKW’s capital allocation is supported by the announced partial disposal of three assets (Andershaw, Bishopthorpe and Hornsea 1) for £181 million. All assets were sold at NAV, and cumulative disposals now total £222 million.
• In total, UKW’s collection of 49 wind farm investments generated 2,581GWh of renewable electricity in that six-month period, an equivalent amount to power approximately 2.2m homes. This was c. 14% below budget, owing to low levels of wind that have been experienced across the industry. As at 30/06/2025, UKW’s portfolio powers 2.2 million homes in the UK and avoids the emissions of 2.4 million tonnes of CO2 per annum.
• Lucinda Riches, chairman of UKW, commented on capital allocation remaining a key focus, saying: “In the medium term, we can see the significant need for capital in the sector and expect that this should provide investment opportunities that surpass the returns afforded by share buybacks and de-gearing, especially when viewed over a longer-term horizon. The Board and Investment Manager continue to evaluate suitable investments and will remain strategically opportunistic.”

Kepler View

In our view, there are two key considerations when looking at near-term updates for long-term assets such as those owned by Greencoat UK Wind (UKW); the validity of the valuation and resilience of the income. With that in mind, these results contain several positives shareholders, such as a number of disposals at NAV and robust cash generation leading to solid dividend cover that supports a yield of over 8%.

That being said, there have been some challenges in the year, most notably through low wind speeds impacting generation. Furthermore, broader power price forecasts fell, over both the near-term and long-term. Both of these factors have led to downward pressure on NAV and cash generation. However, these are external factors that are broadly out of the control of the managers. Wind generation is a key input, although can fluctuate, and power prices have been volatile in the past few years due to macro factors. Demonstrating this recently, in the post results period, near term spot prices have picked up again which will have a positive impact on the next NAV should things stabilise here.

Despite the impact of these external factors, UKW has still paid dividends in the period that are an increase of 3.5% on the same period last year. These were comfortably covered by net income 1.4x, which, whilst down on the previous period, still represents solid cover in our view. What we believe is particularly encouraging from a shareholder’s perspective are decreases in line items such as finance costs and management fees which have helped support the net cash generation figure, reflecting the reduction in gearing and change to policy respectively in the past few months. These are factors within the trust’s control, demonstrating that, despite the external challenges the trust faced, it has pulled at the levers it has in order to maintain income stability.

The managers have also made many strides in realising capital through over £200m of disposals, all of which have been made at their latest valuation. Ultimately, valuing assets such as these involves some element of estimation, and therefore, these transactions provide crucial, real-world evidence that private asset buyers are not seeing the discount in the valuation of these asset manifest in UKW’s share price. This in turn gives confidence in UKW’s NAV in our view. Furthermore, some of the proceeds of these disposals have been put towards reducing gearing. This has not only supported the cash generation and therefore dividend cover, as mentioned above, but also further de-risked the trust. In a backdrop of higher-for-longer interest rates, we believe this should add reassurance.

Ultimately, whilst these results have seen some important metrics be impacted, the fact the trust remains resilient is a testament to the simplicity of the approach in the first place, and how much margin of safety was built into the model. And whilst the NAV and dividend cover have fallen, we believe the current discount of c. 18 % more than accounts for this, with a yield of over 8% also considerable compensation for those who hold the long-term performance of the trust in mind

All higher risk ETF’S, so maybe best to be pair traded with another ‘safer’ yielding Trust.

Dividends can change so check the blended yield figure before you hit the buy button.

Sorry, that’s a different topic.

The Snowball will achieve it’s income fcast for this year of £9,180.

A yield of 9.2% on seed capital.

The comparison share using the 4% rule VWRP £141,553. Not shabby and maybe one to consider when the next market sell off happens.

Using the 4% rule a comparison income of £5,662

Remember it’s the end destination for you plan this is the most important for your retirement. Investor or gambler ? The choice my friend is yours. GL

Published 6 August 2025

Richard Evans

Fidelity International

Important information – the value of investments and the income from them can go down as well as up, so you may get back less than you invest.

Green energy has suddenly started to appeal to Fidelity’s investment trust customers. Three trusts that invest in renewable electricity generation – solar and wind farms – appeared in our top 10 list of most-bought listed funds in July. None of the three had previously featured on our best-seller list so far this year.

The three trusts are The Renewables Infrastructure Group (TRIG), Foresight Solar Fund and Bluefield Solar Income Fund. They were respectively the fourth, sixth and seventh most popular listed funds among our customers last month. TRIG is predominantly a wind farm investor (83% of its assets are in wind assets) while Foresight Solar and Bluefield Solar, as you would expect, concentrate on solar farms, although both have a small amount of their money in energy storage assets.

Other green energy trusts to have featured in our top 10 lists so far this year have included Greencoat UK Wind in January and February and GCP Infrastructure Investments (largely a debt fund, with 59% exposure to renewable energy) in April.

We can see no obvious reason for this sudden increase in interest in green energy other than perhaps greater appreciation of these trusts’ yields at a time of falling interest rates. TRIG, Foresight Solar and Bluefield Solar yield 7%, 7.4% and 7.4% respectively while the Bank of England’s official rate has already fallen from a peak of 5.25% in summer last year to 4.25% currently and is widely expected to be cut again to 4% tomorrow. Not only do such declines in the interest rates payable on cash make the trusts’ yields more appealing on a relative basis but they tend to drive increases in the share prices of income-generating trusts as money shifts away from cash.

The one infrastructure trust to feature in Fidelity’s Select 50 list of favourite funds, International Public Partnerships (INPP), which was the eighth most bought investment trust by our customers in July (and June), does not own electricity generation assets, although it has some exposure to electricity transmission.

Away from green energy, the most popular trust in July was again Fidelity Special Values, which has enjoyed a strong run this year. Its share price has risen by 20.8% in 2025, compared with 12.1% for the FTSE 100 index. Please note past performance is not a reliable indicator of future results.

In second place, for the third month in a row, was Scottish Mortgage. It has recovered well since a slump in early April as sentiment collapsed in the wake of the ‘liberation day’ announcement of new American tariffs. From a low of 815p on 7 April the share price has now risen to £10.77. Shares in Polar Capital Technology, in third place in our July top 10, have followed a very similar trajectory.

After TRIG in fourth place came City of London, a perennial favourite thanks to its yield (currently 4.4%, not guaranteed) and unparalleled record of annual dividend increases. In the next three places were the two solar funds and INPP, followed by Fidelity China Special Situations at ninth and JPMorgan Global Growth & Income bringing up the rear.

Top 10 best-selling investment trusts on Fidelity Personal Investing in July 2025:

1. Fidelity Special Values
2. Scottish Mortgage
3. Polar Capital Technology Trust
4. The Renewables Infrastructure Group
5. City of London
6. Foresight Solar Fund
7. Bluefield Solar Income Fund
8. International Public Partnerships
9. Fidelity China Special Situations
10. JPMorgan Global Growth & Income

3 popular high-yielding renewable energy trusts

Published 21 August 2025

Nick Sudbury

Investment writer

Important information – the value of investments and the income from them can go down as well as up, so you may get back less than you invest.

Investment trusts that provide exposure to renewable energy projects such as solar and wind farms have been out of favour for several years, so it was interesting to see that three of these trusts were among the best-sellers on the Fidelity Personal Investing platform in July. This was the first time that these particular funds had featured in the year-to-date numbers. 

The renewable energy sector is known for its high yields, which are often in excess of 7%, but the attractiveness of these income streams was undermined by the sharp rise in interest rates after the pandemic. Please note these yields are not guaranteed. It is likely that investors are being tempted back ahead of further possible rate cuts by the Bank of England.

The Renewables Infrastructure Group

In fourth place on the list of bestsellers was the two billion pound Renewables Infrastructure Group, which owns a diversified portfolio of wind farms and solar parks in the UK and Europe. These generate revenues from the sale of electricity and government-backed green benefits.

The trust aims to provide investors with long-term, stable dividends and to retain the portfolio’s capital value through re-investment of surplus cash flows. Its management has a total return focus, although much of this is in the form of dividends, with the target distribution of 7.55 pence for 2025 giving the shares a prospective yield of 9.2%.¹ Please note this is not guaranteed.

As with all of these sorts of funds, the net asset value (NAV) calculation is extremely complicated with lots of assumptions so they only tend to be updated on a quarterly basis. The end of June figure of 108.2p suggests that the shares are available at a discount of around 24%, despite the active buyback programme.

• More on Renewables Infrastructure Group

Foresight Solar Fund

Sixth on the list was the £484m Foresight Solar Fund that owns a portfolio of solar farms and battery storage assets in the UK and overseas. It aims to provide investors with a sustainable, progressive quarterly dividend and enhanced capital value, whilst facilitating the transition to a lower-carbon economy.

Foresight’s target dividend for 2025 is 8.1 pence, giving the trust a prospective yield of 9.4%.³ Please note this is not guaranteed. At the end of June the NAV was 108.5p, which equates to a discount of around 20%, although there is an active share buyback programme that has recently been increased to £60m.

The Board is trying to sell its Australian wind farms and intends to use the proceeds to reduce the level of gearing (debt to equity ratio) that currently stands at 40%. However, no bids have been received at time of writing.

• More on Foresight Solar Fund

Bluefield Solar Income

In seventh position was the £568m Bluefield Solar Income whose main asset is a portfolio of solar farms located in the UK. It aims to provide shareholders with an attractive return, principally in the form of quarterly distributions, with the target dividend for the 2024/25 financial year of not less than 8.90p giving the shares a prospective yield of 9.3%.

Bluefield’s latest available NAV at the end of June was 117.8p, which implies a discount of 19%. The Board is exploring strategic options to address this and maximise shareholder value.

One important feature that differentiates it from its peers is the significant pipeline of development assets identified by the Investment Advisor that provide a future platform for growth. Another is the strategic partnership with a group of UK pension funds, which gives Bluefield a means of recycling capital from its existing projects. 

• More on Bluefield Solar Income