For 2025, the board has set a target dividend for the year ended 30 June 2025 of not less than 8.90pps. The 1.1% year on year increase is down on BSIF’s traditional rate of dividend growth, however with one of the highest yields in the sector, the company has opted to focus some of its excess capital on additional share buybacks and the reduction of its RCF. This is a sensible approach in our view given the excessive discount on the company’s shares and the current cost of short-term financing.
Care REIT PLC ex-dividend date Chenavari Toro Income Fund Ltd ex-dividend date CVC Income & Growth Ltd EURO ex-dividend date CVC Income & Growth Ltd GBP ex-dividend date EJF Investments Ltd ex-dividend date European Opportunities Trust PLC ex-dividend date Fidelity Asian Values PLC ex-dividend date Henderson International Income Trust PLC ex-dividend date Invesco Asia Trust PLC ex-dividend date Invesco Perpetual UK Smaller Cos Investment Trust PLC ex-dividend date JPMorgan Claverhouse Investment Trust PLC ex-dividend date Marwyn Value Investors Ltd ex-dividend date Partners Group Private Equity Ltd ex-dividend date Picton Property Income Ltd ex-dividend date Schroder Japan Trust PLC ex-dividend date Starwood European Real Estate Finance Ltd ex-dividend date Taylor Maritime Investments Ltd ex-dividend date
Remember if u buy close to the xd date u can earn five dividend payments for your snowball in just over one year.
I’m really enjoying the design and layout of your site. It’s a very easy on the eyes which makes it much more pleasant for me to come here and visit more often.
Did you hire out a developer to create your theme? Great work !
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Fairly straightforward to blog, especially if u really care about what u blog. I was advised to add a picture or two to catch people’s attention but apart from that all my own work. Tks for taking the time to read the blog and comment.
£9,000 in savings? Here’s how I’d aim to turn that into £400 of monthly passive income
Investing in stocks and shares is one of the most effective ways for me to generate passive income. By purchasing shares in companies, I can benefit from capital appreciation and dividends over time.
This strategy allows my money to work for me, providing a steady income stream without active involvement. With careful research and a diversified portfolio, investing in the stock market can be a rewarding path to financial freedom and long-term wealth accumulation.
What’s more, when I invest through a Stocks and Shares ISA — available through all major brokerages — all my earnings will be tax-free.
So how would I turn some savings, say £9,000, into a passive income that could truly change my life? Let’s take a look.
Compounding’s king
When it comes to building my portfolio for passive income, Compounding’s definitely king. Starting with £9,000, I have a solid foundation to harness the power of compound growth. By reinvesting dividends and capital gains, my initial investment can snowball over time, potentially growing exponentially.
To maximise compounding, I should:
Diversify my investments
Reinvest all returns automatically — growth-oriented companies typically reinvest earnings anyway
Make regular additional contributions to increase the pace of growth
Maintain a long-term perspective
Time’s my greatest ally in this process. The longer my money compounds, the more dramatic the results can be. For example, assuming an average annual return of 7%, my £9,000 could grow to over £35,000 in 20 years without any additional contributions.
However, if I make sensible investment decisions, my portfolio can growth much faster than that. For context, my daughter’s portfolio grew 35% in her first year. It’s going well in year two as well. Good investors can easily average double-digit returns.
So if I were to average 10% annualised growth, after 20 years my £9,000 would be worth £65,000. That’s without any additional contributions. And with £65,000, well, I could generate around £400 a month by invest in high-dividend yielding stocks.
But where to invest today?
At the time of writing, the Nasdaq is near an all-time high, US mega-cap stocks are trading at high multiples, the market’s digesting Labour’s first Budget, and the US election’s next week. This doesn’t make stock picking easy.
One interesting option to consider could be Greencoat UK Wind (LSE:UWK). This renewables fund currently trades at a 15.9% discount to its net asset value (NAV) — the value of its assets according to auditors — and offers investors a 7.5% dividend yield.
Greencoat UK Wind’s unique dividend growth policy, linked to RPI, is an attractive proposition. However, with RPI falling to 2.7%, the 2025 dividend increase is expected to be significantly lower than this year’s 14.2% rise.
It’s also worth noting that the company’s performance is inherently dependent on the weather. Regardless of what management does, if the wind doesn’t blow, the fund will experience a bad quarter.
Nonetheless, I feel that’s baked into the prices we pay for wind-focused investments. It’s a sector benefitting from government backing and renewed investment under Labour. The lifting of a de-facto ban on onshore wind farms should be a long-term boost.
All-in-all, I’d back this firm to deliver double-digit returns over the long run. That’s the 7.5% dividend yield — which will rise relative to our buying price today — and share price appreciation of at least 2.5% annually.
The post £9,000 in savings? Here’s how I’d aim to turn that into £400 of monthly passive income appeared first on The Motley Fool UK.
With today’s planned re-investment, next year’s fcast of income of £9,120.00 should be pencilled in. When the future earned dividends are re-invested and any gentle increase in dividends the figure should be nearer to the target of 10k or could offer support to the fcast if any underlying dividends are changed.
Remember if u can re-invest any future dividends at a yield of 7%, the target of 10k will equate to 20k in ten years time. GRS but GR.
Tempus explores whether to buy shares in the historic F&C Investment Trust, highlighting its 700% return over two decades and unique multi-manager strategy. Despite a recent discount to net assets, it presents an opportunity for new and long-term investors. Meanwhile, Questor spotlights AVI Global Trust, noting its consistent performance without relying on popular megatech stocks.
By Frank Buhagiar
Tempus – Should you buy shares in F&C?
156 years and counting. That’s how old F&C Investment Trust (FCIT) is. As The Times’ Tempus notes “longevity is built into its DNA.” And that’s not just in terms of age, but performance too. Over the past two decades, the global investor has generated a share price total return of over 700%, “blowing both the global stock market and the rest of the FTSE 100 out of the water.”
That performance has been helped by a number of factors that, together, help to differentiate the world’s oldest investment trust from its peers in the global sector. First it has a broad mandate to deliver value for shareholders via a portfolio of not just global stocks but private equity investments too – as at end of June, private equity accounted for over 10% of the portfolio. And then there’s F&C’s “multi-manager” approach – fund manager Paul Niven outsources stock picking to specialist teams while retaining control over the fund’s asset allocation.
True, over the past five years, F&C’s +58% share price return is a little behind the FTSE All World index’s +63%, while the shares currently trade at a 9% discount to net assets, almost twice the 4.8% average seen over the past five years. Tempus however thinks this represents an opportunity “The shares look good value for a new investor, as well as long-term shareholders who want to top up their holding.” After all, it’s all about the long term with F&C.
Questor – AVI Global beating markets without the Magnificent Seven
At 135 years, AVI Global (AGT) may not be as old as the oldest investment trust of them all, F&C, but it’s not far off (as mentioned above F&C is 156 years old). Like F&C, AGT belongs to the global sector. And like F&C, AGT takes positions in other managers’ funds, specifically investment trusts, although it also invests in holding companies and Japanese stocks. What links this “eclectic mix” of investments is that their share prices are trading at big discounts to fund manager AVI’s assessment of their underlying value. For AVI is a value investor. And based on its track record, a good one too. As Questor points out “Over the 39 years that Asset Value Investors has been running AVI Global Trust, it has grown its assets from £6m to around £1.3bn.”
What’s more, that performance has been achieved with little or no exposure to flavour-of-the-month hot stocks such as the Magnificent Seven megatechs. Because of this “Questor believes AVI Global offers something genuinely different. It is remarkable that the trust has beaten the global index over the past five years without any exposure to the mega cap stocks that dominate other portfolios. One to tuck away for the long term.”
Emerging markets ETFs or investment trusts: Navigating rate cuts, China risks, and market opportunities
The Federal Reserve’s September rate cut sent US and emerging markets soaring, with the iShares MSCI Emerging Markets ETF benefiting from a liquidity boost. Yet, China—accounting for over a quarter of the index—casts uncertainty, given its economic struggles and regulatory headwinds. London-listed investment companies offer alternatives, letting investors adjust their China exposure.
By Frank Buhagiar
18 September 2024 saw the Federal Reserve finally cut US interest rates, lowering the key lending rate target by 50-basis points to the 4.75%-5% range. US markets reacted positively to the cut. The yellow scribble on the graph below highlights the immediate response to the news from the S&P500 (dark blue line), the Nasdaq (pink line) and the Dow Jones Industrial Average (light blue line) – all three indices enjoying a sharp spike and, for the most part, holding on to the gains made.
US markets, however, not the only ones to benefit. Emerging markets too welcomed the news. As the graph below shows, the iShares MSCI Emerging Markets ETF enjoyed a bounce on the day of the rate cut:
And like US markets, the ETF, which tracks the MSCI Emerging Markets Index held on to the gains made. To be fair, not much new here – emerging markets generally react well to Fed rate cuts. Reasons include the lower yields on US assets make those of other asset classes more attractive;while lower US rates reduce the cost of borrowing in US dollars, thereby easing liquidity conditions. According to the National Bureau of Research (NEBR), “when the Federal Reserve lowers US interest rates, there is an increase in cross-border loan volumes by global banks, particularly with regard to emerging market economies.” The NEBR’s paper ‘US Monetary Policy and Emerging Market Credit Cycles’ looked at the 1980-2015 period and found that, even after accounting for differences in GDP growth, inflation, and forecast future economic performance, “a 4 percentage point cut in the Federal Reserve’s target interest rate (a typical decrease during an easing cycle) increased loan volumes in emerging markets by 32 percent relative to the volumes in developed markets.”
And increased capital inflows tend to spur economic growth – no wonder the iShares ETF reacted well to the 18 September US rate reduction. What’s more, with more rate cuts expected in the US, it would seem emerging markets are well placed. But before investors rush to write out their buy dockets for the iShares MSCI Emerging Market ETF, there’s an elephant in the room. And, it’s a big one. China.
As at end of September, the country accounted for over a quarter of the MSCI Emerging Markets Index, easily the biggest contributor. But Chinese markets have had a tough time. According to JPMorgan Emerging Markets’ (JMG) Half-year Report earlier this year, “For China, it (2023) was another annus horribilis, with sustained falls in share prices leaving the market down 16% in sterling terms, with declines continuing throughout the year.” So, even though other emerging markets had decent 2023s, returning in aggregate 14% in sterling terms over the course of the year “given China’s significance in the asset class, the two combined to produce only a modest outcome for the overall emerging market index: the year as a whole saw a return of 4.4% for the benchmark index.” How China fares has a big impact on how emerging markets, as an asset class, fare.
As for why China had a poor year, JMG cites, a slowing economy and ongoing regulatory uncertainty. Ashoka WhiteOak Emerging Markets (AWEM) Investment Manager’s Report in June sums it up neatly “China’s economy has been grappling with persistent deflationary pressures, exacerbated by its property crisis and stubbornly weak domestic demand. Over the past three years, policy uncertainty, muted fiscal stimulus and certain regulatory interventions have weighed on investor confidence. US-China relations, since the trade tensions began in 2018, have also been one of the factors constraining equity returns in China.” Despite this, AWEM’s investment managers write “While we are not influenced by strong ‘top-down’ macroeconomic views on China, we do expect domestic sentiment to improve gradually”.
Not sure about how AWEM defines the word “gradually” but fast forward just a few months and sentiment towards China got a major boost after the central bank cut rates and the authorities announced steps to boost growth as part of what Winterflood describes a “stimulus wave”.
Things potentially looking up for China; throw in US interest cuts and it could be all systems go for emerging markets funds. Time will tell. In the meantime, the worry remains that the recent improvement in sentiment towards Chinese stock markets proves to be fleeting – after the initial burst of excitement, Chinese markets once more found themselves under pressure. At the same time, geopolitical/global trade risks remain, especially with a US election just days away. On this broker JPMorgan is reminded that back in 2016, “when Donald Trump won the US presidential election, EM assets had a meaningful selloff, down 10% relative to DM over the following two months. If Trump wins, then we believe EM will be a laggard, at least initially. On the other side, if Kamala Harris wins, and we have a divided Congress, then EM could start to perform better more sustainably.”
With a quarter weighting in China, for some, plumbing for an MSCI Emerging Market ETF might just be too much of a rollercoaster ride to stomach, particularly, as JMG’s Half-year Report noted “The drag on the entire asset class from China threatens to obscure the fact that other emerging markets have come through a challenging few years in relatively good economic shape.” The report cites lower levels of fiscal support from emerging market governments during the pandemic compared to developed countries, which has enabled them to avoid ramping-up sovereign debt; and when inflation reared its head, emerging market central banks in the main acted decisively so that they now have scope to lower interest rates and support domestic demand. As JMG notes, “That is not a bad backdrop for domestic business profits and for growth.”
So, with question marks hanging over China, wouldn’t it be handy if there was a way to invest in emerging markets without having that 25%+ exposure to the country the ETF has? Step up London’s investment companies. No shortage of options in the Association of Investment Companies (AIC) Global Emerging Markets sector, home to no less than 11 funds. Unlike their equivalent ETFs, these funds are actively managed and so can underweight/overweight particular countries within the emerging market universe, including China.
Because of this, investors have a range of funds to choose from to match their own views on investing in China. From Templeton Emerging Markets at one end of the spectrum with a near inline 23.1% exposure to China as at 31 August 2024 to Mobius at the other end of the scale with just a 2.5% weighting. Three other funds fall in between. JMG, for example, had 16.8% of total assets invested in China as at 31 July 2024. AWEM, even more underweight with just 10.5% of total assets invested in China as at 31 August 2024. And then there’s Fidelity Emerging Markets with 6.2% of total assets in China.
There are also funds with no exposure to China whatsoever and, unless there’s a change in investment policy, will most likely never do so. These include BlackRock Frontiers, which only invests in frontier markets so China not even on the radar.
Same is true of Baring Emerging Markets EMEA Opportunities (BEMO), albeit for geographic reasons. In a recent interview with Doceo, portfolio manager Adnan Al-Eraby notes, “When most investors talk about emerging markets, they’re referring to the large component of the index which is Asia. Asia has a large population, naturally has the largest economies and has several large markets that dominate the index, which is China, India, South Korea and Taiwan.” But there are other regions too, such as emerging EMEA (Europe, Middle East, and Africa) markets. As the name suggests, this is where BEMO invests. Among the fund’s top country weightings are Saudi Arabia, South Africa, Poland and Greece. Because of this “The trust offers global investors and asset allocators the opportunity to invest in a portfolio of companies that are often overlooked by large institutional investors that offer diversification benefits”.
For those investors looking to up their emerging markets exposure, London’s investment company space offers a range of options to suit their own views, not just on individual countries such as China, but also on particular regions such as Asia or EMEA.
What’s more, after a tricky period which, according to JPMorgan, has seen Emerging Markets underperform Developed Markets by around 2% year-to-date and 30%+ relative over the last three years, investment company share prices across the sector are trading at an average discount of 12.5%. That could provide a kicker to returns should emerging markets, well, emerge from the shadows of their larger developed peers.
The Results Round-Up: The week’s investment trust results
Baillie Gifford Japan’s (BGFD) net asset value (NAV) total return per share comes in at exactly 10% for the full year; Henderson International Income (HINT) does slightly better with a 10.4% total return as it joins the Association of Investment Cos. Next Generation Dividend Hero list; while New Star (NSI) tops the lot with an 11.69% total return for the year.
By Frank Buhagiar
Baillie Gifford Japan (BGFD) philosophical approach woos markets
BGFD posted a +10% net asset value (NAV) per share total return for the full year. That’s a little short of the TOPIX index’s +14.7% total return (sterling). Encouragingly, the fund modestly outperformed the benchmark in the second half of the year but not by enough to recover the ground lost against the benchmark in the first half. The latest full-year numbers mean five and ten-year NAV total returns now stand at +12.6% and +151.8% respectively compared to the TOPIX’s +36.7% and +140.0%.
The investment managers note “The obvious question on shareholders’ minds following a 5-year period with a disappointing relative outcome will be whether they should remain confident in the prospects for their Company’s portfolio.” The answer, “Nothing in life is guaranteed but we believe there are both philosophical and practical reasons for optimism.” Philosophical includes the fund’s consistent approach that has previously served the fund well for long periods; the portfolio’s low turnover; and also “the lack of recent interest in what the Company is offering, which means that it is unlikely that we are at a peak of optimism where everything is already in the price.” As for practical, the portfolio has demonstrated higher sales growth than the market over the past five years and is forecast to grow by 9.2% p.a. over the next three years versus 3.1% p.a. for the market. “If this superior business growth materialises as anticipated, we are confident we will be able to report on more share price success”. The market liked what it heard, marking the shares up 3p to 704p.
Numis: “The fund has experienced a difficult few years as growth stocks have fallen out of favour and its mid-cap bias has hurt performance. Exposure to Japan remains a useful portfolio diversifier, benefiting from an established and stable political system, and an increasing focus on returns to shareholders. The shares may offer value on a c.13% discount, although a turnaround in sentiment towards growth stocks will be required for it to come back into favour.”
Investec: “The manager has a clear and successful growth-focused philosophy which has generated superior long-term returns.”
Henderson International Income (HINT) increases total dividend
HINT’s +10.4% NAV total return for the year, a little behind the MSCI ACWI (ex UK) High Dividend Yield Index’s +14.2% (sterling). Not all about capital appreciation though. For HINT has a dual-focus: to provide shareholders with a growing total annual dividend, as well as capital appreciation through a diversified portfolio of global stocks outside of the UK. And on the dividend front, the fund continues to deliver with a +3.2% increase in the total dividend for the year. That makes it 10 consecutive years of dividend growth which sees HINT make it onto the Association of Investment Companies’ “next generation dividend hero” list.
Still, the shortfall in total return did prompt a strategic review, resulting in a tweak to the investment strategy. As explained by chairman Richard Hills, while dividends will remain “the primary contributor” to the fund’s distributions, when the fund managers spot “compelling opportunities in stocks, regions or sectors that would otherwise be excluded due to their yield”, the board is prepared to dip into reserves to supplement dividends. “This will expand the potential universe of stocks in which the investment team can invest.” Shares closed down at 165.75p compared to 168p the previous day – well it was Halloween after all.
Winterflood: “Share price TR +6.5% as discount widened from 9.6% to 12.8%. Underperformance relative to benchmark predominantly due to stock selection.”
New Star Investment Trust (NSI) goes defensive
NSI reported an +11.69% total return for the year to 30 June 2024. For comparison, a whole host of indices provided: the Investment Association’s Mixed Investment 40-85% Shares Index (a peer group of multi-asset funds with allocations to equities in the 40-85% range) up +11.80%; the MSCI AC World Total Return Index up +20.61% (sterling); the MSCI UK All Cap Total Return Index up +13.16%; and UK government bonds up +4.50%. The reason for the multiple indices, because, as the investment managers explain, the fund invests across asset classes “to increase diversification and reduce longer-term risks.” This did mean that over the year performance fell short of “a strongly rising equity market.”
Sounds like the investment managers have adopted a defensive stance too, as “changes over the year have resulted in a higher allocation to more lowly-valued countries and sectors, which may prove defensive if investors become disenchanted with the scale or pace of the commercialisation of AI advances.” Another defensive-oriented word included in a sentence or two later “A focus on equity income investments may provide some defensiveness in times of heightened volatility and facilitate the payment of dividends.” The shares were largely unchanged – off just 0.5p to finish the day at 105.5p. The market sympathising with the defensive stance perhaps.
Winterflood: “Relative performance hurt by allocation to cash and low-risk multi-asset investments. Within equity allocation, the fund’s relatively high Emerging Markets weighting at the expense of the US was also negative. As at 30 June 2024, portfolio comprised: investment funds (71%), investment trusts & ETFs (15%), unquoted investments incl. loans (2%), other quoted investments (1%) and cash (12%). Board is proposing to widen the fund’s investment objective towards total return rather than simply capital growth.”
