Investment Trust Dividends
If u buy a Trust just before it’s xd date, u can receive the right to five dividends in just over a year.
The working example being NESF but as always not a recommendation to buy, DYOR.
NESF declared dividend 2.11p x 5 = 10.55p
Current share price 70p a yield of 15%, if u think the dividend is secure.
Thursday 13 February
Alternative Income REIT PLC ex-dividend date
Fair Oaks Income Ltd ex-dividend date
Fair Oaks Income Realisation Ltd ex-dividend date
Greencoat UK Wind PLC ex-dividend date
ICG Enterprise Trust PLC ex-dividend date
Invesco Perpetual UK Smaller Cos Investment Trust PLC ex-dividend date
JPMorgan Emerging EMEA Securities PLC ex-dividend date
Majedie Investments PLC ex-dividend date
Murray Income Trust PLC ex-dividend date
NextEnergy Solar Fund Ltd ex-dividend date
Octopus Renewables Infrastructure Trust PLC ex-dividend date
Pershing Square Holdings Ltd ex-dividend date
Target Healthcare REIT PLC ex-dividend date
Nine trusts for 2025’s income challenge
Investment trusts can hold back up to 15% of the income generated from the underlying holdings each year. In leaner periods, such as during the global financial crisis and the Covid-19 pandemic, many investment trusts maintained or increased their dividends by dipping into income retained during better times.
In contrast, most funds cut dividends as they cannot hold back income and are required to pay investors all the income received each year. So, when there’s a shortage of dividend cheques during challenging times, funds have no get-out-of-jail card and dividend cuts are pretty much inevitable.
It’s easy to get the impression that the revenue reserve is somehow “ring-fenced”, but that’s not the case. In reality, it amounts to little more than an accounting tactic, an entry in the books to show retained revenue. That money is part of the trust’s NAV and is invested in the same way as the rest of the portfolio. If some of it is needed to top up dividend distributions, then the manager has to sell holdings or dip into the cash element and the NAV is affected.
Of course, even for those investment trusts with healthy income reserves, there’s no guarantee that dividends will be maintained or increased.
The hypothetical portfolio has been created to show DIY investors how they can build their own diversified income portfolios. The funds are chosen on the basis that over the medium to long term they would be expected to grow both capital and income. However, there are no guarantees that this will be achieved.
Moreover, you must be mindful of the fact that overall total returns (capital and income combined) can decline, especially in the short term.
As I’ve picked each investment trust for the medium to long term, I’m inclined to avoid making many changes each year. However, there are certain things I consider, including a fund manager change, short- and long-term performance, and whether I can simplify the portfolio.
There was a manager change in 2024 at JPMorgan Claverhouse. Its longstanding fund manager of 12 years, William Meadon, departed last summer. The baton has passed to Callum Abbott, who managed Claverhouse alongside Meadon for the past six years. Anthony Lynch and Katen Patel, who oversee the JPM UK Equity Income fund, have also joined Claverhouse as co-managers. The investment approach remains the same.
When a fund manager leaves to join a rival firm or retires, it’s important to see evidence of good succession planning so that the handover is smooth.
While Abbott has been working alongside Meadon for the past six years, the news of Meadon’s departure felt abrupt as it was a short notice period, with Meadon’s departure announced on 24 June 2024 and his exit taking place in August. Another way of doing it would have been to install the two new co-managers alongside Abbott before Meadon’s departure.
Due to Meadon’s long tenure and the succession planning not being as smooth as it could have been, I’ve decided to remove JPMorgan Claverhouse from the £10,000 income challenge for 2025.
In its place, I’ve chosen Dunedin Income Growth Ord DIG
Managed by Rebecca Maclean and Ben Ritchie. It’s a concentrated portfolio of best ideas, holding around 36 stocks, with a focus on both dividend growth and capital growth. It has a sustainable investment approach and can hold up to 25% in overseas stocks.
Dunedin Income Growth has either held or grown its dividend for the past 44 years. It would have been classed by the Association of Investment Companies (AIC) as a “dividend hero” (defined as 20 years or more of consecutive dividend increases) if it had not held its dividends at the same level in 2010 and 2011. It is currently a “next-generation” dividend hero, with 13 years of consecutive increases.
There were a couple of other investment trusts I considered, including Murray Income Trust Ord MUT
and Law Debenture Corporation Ord LWDB, but what swung it for Dunedin Income Growth was the overseas exposure and sustainability focus. Both these elements bring something different to the £10,000 portfolio.
I also considered adding TR Property Ord TRY
To replace the property void created by the delisting of Balanced Commercial Property. However, I’m cautious on the outlook for the asset class due to the prospect of economic growth remaining sluggish and inflation potentially surprising on the upside. This could result in fewer interest rate cuts than expected this year, with the Bank of England indicating last month that four cuts were on the cards for 2025. I would sooner wait to see if those interest rate cuts materialise, and revisit property exposure next year.
Please note: following the publication of this article (on 4 February 2025) there was an announcement about a proposed merger betweenJPMorgan Global Growth & Income and Henderson International on 7 February. If given the green light by shareholders, Henderson International Income’s assets will be rolled into JPMorgan Global Growth & Income. The current fund managers and investment objective of JPMorgan Global Growth & Income will remain the same. If approved, the merger is expected to take effect by July 2025.
The 2025 portfolio requires £190,000 for the £10,000 income challenge (a portfolio yield of 5.26%). All yield figures were sourced in late January, but bear in mind that yield figures are not static.
UK equity exposure comprises 45% of the portfolio. City of London has the highest weighting at 15%. Its longstanding fund manager, Job Curtis, has been at the helm since 1991. Curtis manages the portfolio in a conservative fashion, focusing on companies producing plenty of excess cash to pay dividends. Curtis mainly sticks to Britain’s biggest firms that are listed in the FTSE 100 index.
Over the long term, returns have been solid, but arguably a bigger attraction is that the trust is a consistent dividend payer, having raised payouts each year since 1966.
The other three trusts are allocated 10% each: Merchants Trust, Dunedin Income & Growth, and Diverse Income.
Merchants Trust aims to deliver an above-average level of income and income growth, as well long-term growth of capital, through investing mainly in higher-yielding large UK companies. It has lagged the averaged UK equity income trust over one and three years but is ahead over five years. Merchants has raised its dividend for 42 consecutive years.
Diverse Income invests across the UK equity market but has a bias towards UK smaller companies. Its fund manager, Gervais Williams, has said that he’s the most bullish he’s been about the prospects for the UK market in 30 years.
Williams explains that he seeks to “identify companies which generate more income growth than most of the market. If the income growth comes through, then that drags the share price up over time. Not every year, but over the longer term. It is the capital appreciation along with the good and growing income which ultimately delivers the return.”
For global/overseas income, 35% is allocated. JPMorgan Global Growth & Income has 20%. It aims to outperform the MSCI All Country World index over the long term. It’s “style neutral”, meaning that it doesn’t favour value or growth, for example. It holds 50 “best idea” stocks, and looks to trim its winners and recycle the money into underperformers it still has conviction in.
Henderson International Income has a 10% weighting. This trust gives the portfolio a different source of income. Its investment approach involves favouring defensive and value stocks, with the US weighting of 34% notably less than global indices holding around 70%.
Of the “Magnificent Seven” technology stocks, it holds only Microsoft Corp MSFT
In its top 10 holdings. Another difference compared to other global income strategies is that it doesn’t invest in the UK. Ben Lofthouse has managed HINT since launch in 2011.
Utilico Emerging Markets has been handed 5%. Its approach is very different from peers as it focuses on investing predominantly in infrastructure and utility companies across the emerging markets. Despite recent challenges, the same structural growth drivers remain across emerging economies, including growing middle-class populations driving consumption.
TwentyFour Income is a 10% weighting. When this bond trust was chosen two years ago, a key attraction was that most of the bonds it held were floating rate, meaning they benefited from interest-rate rises. The team expects interest rates to remain higher for longer. If this plays out, its strategy looks well placed to benefit.
It said: “In the UK, the extra borrowing unveiled in the new Labour government’s first Budget in October is expected to bring a short-term boost in growth that will limit the Bank of England’s capacity to cut rates. In the US, the tax cuts and tariffs proposed by Donald Trump on his way to winning the presidential election in November are widely considered to be inflationary, which has weighed on market expectations for US rate cuts.
“This shift in expectations for the next 12 months or so is naturally a positive for floating-rate assets such as Asset Backed Securities (ABS). Given ABS coupons generally move up and down in line with base rates, higher-for-longer rates would mean higher-for-longer income.”
And finally, Greencoat UK Wind gets a 10% weighting. It aims to provide investors with a yearly dividend that increases in line with RPI inflation. This has been successfully achieved each year since the trust launched in 2013.
Not naval gazing that’s a different subject altogether.
by Kyle Caldwell from interactive investor
A year ago, I selected 10 investment trusts with the aim of achieving £10,000 of annual income in 2024.
Collectively, the hypothetical portfolio yielded 5.24%, meaning that a sum of £195,000 was required to attempt to hit the target.
While income is the priority, I’m also keen to try and strike the right balance from a total return perspective.
The 2024 line-up fell slightly short of the target, with £9,921 of income generated. This was down to less income than expected from Balanced Commercial Property, which was delisted in mid-November after being taken over by US private assets firm Starwood.However, given BCPT’s strong share price performance, up 38.2% in 2024 until its delisting, some of those gains could have been used to make up for the shortfall.
In terms of overall total returns (including reinvested dividends), the portfolio returned 9.4% in 2024.
Before revealing the line-up for the £10,000 income challenge in 2025, let’s look at how last year’s constituents fared.
It’s been a tough couple of years for the investment trust sector, with the average discount standing at around -15%. The discount reflects the gap between an investment trust’s share price and the value of its underlying investments (the net asset value or NAV). When a trust’s share price is above the NAV, it trades on a premium, resulting in new investors paying more than the underlying assets are worth.
However, with the hypothetical income portfolio it’s pleasing to see only two funds in the red in 2024, Greencoat UK Wind UKW 0.42% and Utilico Emerging Markets Ord UEM2.39%, with respective share price total return losses of -8.6% and -3.1%.
Greencoat UK Wind suffered after investor sentiment towards renewable energy infrastructure soured. This led the discount to increase, from around -13% at the start of 2024 to over -20% at the start of 2025.
Since interest rates started rising in late 2021, the renewable energy infrastructure sector was impacted and experienced less demand from investors. As interest rates rise, so do bond yields. As a result, income seekers have more options and can take less risk, as the safest types of bonds, UK and US government bonds, offer yields of around 4.5% compared to virtually nothing when interest rates were at rock-bottom levels.
The hope is that falling interest rates will act as a catalyst for a change in fortunes for the sector, as well as other investment trust strategies that have been out of favour.
Utilico Emerging Markets’ performance was not helped by its discount moving from around -15% to around -20% (from the start of 2024 to the start of 2025). Investor sentiment towards emerging markets has been knocked by continued geopolitical tensions and the eruption of war in the Middle East.
After Balanced Commercial Property, the second-best performer was
JPMorgan Global Growth & Income Ord JGGI, up 19.8%. Among the trust’s winners in 2024 were its top four holdings among the US technology giants capitalising on advancements in artificial intelligence (AI); Microsoft Corp MSFTAmazon.com Inc AMZN, NVIDIA Corp NVDA0. and Facebook-owner Meta Platforms Inc Class A META.
Diverse Income Trust Ord DIVI
Came second in terms of performance, up 15.9%. Gervais Williams, its fund manager, said the return was driven by smaller company shares starting to stage a recovery after a couple of tough years as interest rates rose. He picked out Galliford Try Holdings GFRD and Yu Group YU. as two stocks that stood out in performance terms.
In third place was TwentyFour Income Ord TFIF
up 12.9%. This specialist bond fund aims to generate attractive risk-adjusted returns principally through income distributions. This objective was certainly achieved in 2024. It invests in UK and European Asset-Backed Securities that have high yields and are floating rate (meaning they benefit from interest rises). Therefore, the higher interest rate environment has benefited this fund.
Elsewhere, City of London Ord CTY
Delivered 10.6%, followed by UK equity income peers
JPMorgan Claverhouse Ord JCH0 and Merchants Trust Ord MRCH, with gains of 8.3% and 3.9%.
Finally, global equity income trust Henderson International Income Ord HINT
returned 5.1%.
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Investing £3.33 into an ISA every day from 22 could result in a £60,000 passive income
Story by Dr. James Fox
I already had a Stocks and Shares ISA when I started work at 22, and it was topped up by inheritance and sporadic gifts. However, it wasn’t until much later that I started making regular contributions to my ISA.
Investing £3.33 per day is the equivalent of investing £100 per month. That would have been about 5% of my first paycheque. It might not sound like a lot, especially as it would now take me more than three months to afford one Tesla share, but it adds up over time. Plus, investors can use fraction shares to gain access to more expensive stocks.
The secret ingredient is compounding. This is what happens when investors keep their money invested over the long run. It’s like a snowball that, as it gets bigger, can pick up even more snow.
As we can see from the below graph, £100 really starts to compound after 15 years — this example assumes a growth rate of 10% annually. Towards the end of the 46-year period, £100 of monthly contributions should seem very affordable, while the portfolio will be growing at an impressive rate.
Why 46 years? Well, that’s the number of years between me starting work at 22 and my predicted retirement age at 68.
Source: thecalculatorsite.com
So, we’ve got the formula. But how can we actually turn £3.33 a day into a small fortune? Well, many novice investors will invest in index-tracking funds. This is a wise move that provides diversification and relatively low risk.
Buffett’s value investing approach, focusing on undervalued companies with strong fundamentals, has proven successful over decades. However, investors should consider risks such as Berkshire Hathaway’s large size potentially limiting future growth opportunities, the challenge of finding attractively priced acquisitions in the current market, and the eventual succession of leadership as Buffett ages.
Despite these concerns, Berkshire Hathaway’s strong balance sheet, cash-generating businesses, and proven investment philosophy make it an attractive option for long-term investors seeking stability and growth potential. Over 10 years, the average return is 12.3%. This is one I’m adding to my daughter’s pension.
In the above example, £100 a month would grow into almost £1.2m over 46 years. Now, with all that money invested in stocks, funds, and bonds with an average yield of 5%, an investor would receive around £60,000 a year or £5,000 monthly.
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. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.
The post Investing £3.33 into an ISA every day from 22 could result in a £60,000 passive income appeared first on The Motley Fool UK.
Story by Stephen Wright
9% dividend yield! Could buying this FTSE 250 stock earn me massive passive income?
With the Bank of England cutting rates, savers are likely to get weaker returns on their cash than they did before. But there’s a FTSE 250 stock that I think looks interesting right now.
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.
Assura owns 625 properties, including GP surgeries, primary care hubs, and outpatient clinics. Over 99% of the portfolio is currently occupied and the average lease has over 10 years remaining.
With the vast majority of its rent coming from either the NHS or HSE, the threat of a rent default is minimal. And the company stands to benefit from a general trend towards people living longer.
Debt can often be an issue for REITs, but Assura is in a reasonable position. Its average cost of debt is around 3% – which isn’t bad at all with interest rates currently at 4.25%.
In other words, Assura looks like it’s in decent shape. It operates in an industry that should be fairly resilient, it has tenants that are unlikely to default, and its balance sheet doesn’t look like a concern.
A 9% dividend yield can often be a sign to investors there’s something to be concerned about. It isn’t immediately obvious what that might be in this case – but a closer look is more revealing.
With any company, investors need to keep an eye on the number of shares outstanding over time. In particular, they need to pay attention to whether this is going up or down.
Assura’s share count has been rising quite considerably over the last few years. Since 2019, the number of shares outstanding has grown by around 4.5% per year.
That means investors have had to increase their investment by 4.5% each year in order to maintain their ownership in the overall firm. And that really cuts into the return from the dividend.
If this continues, investors aren’t going to be in a position to simply collect a 9% passive income return. They’re going to reinvest around half of it to stop their stake in the business reducing.
This is actually a symptom of a wider risk with Assura. Its dividend policy means it often has to raise capital through debt or equity, so there’s a real risk of the share count continuing to rise.
A stock with a 9% dividend yield often comes with a catch. And I think this is the case with Assura – while the firm distributes a lot of cash, a good amount has to be reinvested to prevent dilution.
That’s not necessarily a devastating problem. But it is something for investors to be realistic about when thinking about passive income opportunities.
The post 9% dividend yield ! Could buying this FTSE 250 stock earn me massive passive income ? appeared first on The Motley Fool UK.
£££££££££££££££
The yield you earn will be the yield based on your buying price, hopefully gently rising over time, unless they cut the dividend.
 Why Dividend Investing Wins in a Crazy Market Market volatility freaks a lot of people out. Stocks drop, headlines scream, and suddenly everyone’s convinced the sky is falling. But if you’re a dividend investor? You don’t have to stress—because you’re still getting paid. That’s the beauty of dividend investing. Instead of relying on stock prices going up, you’re collecting real cash along the way. And in unpredictable markets, that steady income can be a total game-changer. Here’s why dividend investing is one of the best strategies, especially when things get wild. 1. You Get Paid No Matter What Stock prices bouncing all over the place? Doesn’t matter—your dividend checks keep rolling in. Unlike growth stocks, where you’re hoping the price goes up, dividends are real money hitting your account. You can reinvest them, buy more stocks when prices drop, or just pocket the cash. Either way, you’re making money no matter what the market’s doing. 2. Compounding Does the Heavy Lifting Reinvesting dividends is where the real magic happens. Each payout buys you more shares, which then earn even more dividends. It’s a compounding machine that keeps running in the background, growing your portfolio year after year. The best part? The longer you stay invested, the bigger that snowball gets. 3. Dividend Stocks Are Built for Stability Sure, high-growth stocks are exciting—until they crash. Dividend stocks, on the other hand, are usually well-established businesses with steady profits. They don’t rely on hype; they rely on consistency. And here’s the kicker: many of these companies increase their dividends every year—even during recessions. That means your income stream keeps growing, no matter what the market throws at you. 4. Volatility Becomes an Opportunity When stock prices drop, most people panic. But if you’re a dividend investor, lower prices just mean higher yields and a chance to buy more at a discount. Instead of stressing about red days, you’re in a position to take advantage of them—boosting your future income while others are selling in fear. 5. It Helps Fight Inflation Inflation eats away at your buying power, but dividend stocks help offset that. Many companies regularly raise their payouts, meaning your income grows over time instead of losing value. While cash in the bank gets weaker, your dividends keep getting stronger. Final Thoughts Dividend investing isn’t about chasing hype—it’s about getting paid, staying patient, and letting time do the work. Markets go up and down, but dividend stocks keep putting money in your pocket. That’s why I love them. Whether stocks are flying high or in free fall, dividend investing keeps you in control. So keep buying, keep reinvesting, and let your dividends do the heavy lifting. |
By Frank Buhagiar
BERI outperformed over the full year: +15.3% net asset value (NAV) per share return and +14% share price return both easily ahead of the blended comparator index – 40% MSCI ACWI Select Metals & Mining Producers Ex Gold and Silver IM (Mining), 30% MSCI World Energy Index (Traditional Energy) and 30% S&P Global Clean Energy Index (Energy Transition). For the record, the comparator index could only manage +0.5%. M&A within the mining portfolio cited as one of the reasons behind the outperformance. The strong showing no outlier either: +125% NAV return over 5 years compared to the +81.5% net total return of the MSCI ACWI Select Metals & Mining Producers Ex Gold and Silver IMI Index and +71.4% net total return of the MSCI World Energy Index.
Chairman Adrian Brown highlights “the flexibility of the Company’s investment mandate with the ability to shift exposure between Mining, Traditional Energy and Energy Transition sectors”. Helpfully, “The Board considers that all three sectors have an important role to play as the energy system continues its transition to a lower carbon economy; the Mining sector provides the material supply chain for low carbon technologies from steel for wind turbines to lithium for electric cars; traditional energy is needed to support base load energy to continue to power economies during the transition”. Sounds like BERI has got it all covered. Shares, which have had a strong run over the past year, took a pause for breath though, finishing the day largely unchanged at the 120p level.
Winterflood: “Stock selection contributed to relative performance. Top contributor was pipeline company Targus Resources, driven by expected power demand uplift from AI data centres. Nuclear energy benefitted from the same trend, with Cameco contributing. Traditional Energy was 31% of NAV. M&A (Filo Corp, Stelco) drove performance in Mining (40% of NAV) segment of the portfolio, while weak demand for commodities from China detracted. Key contributors to Energy Transition sleeve (29% of NAV) were industrials manufacturing energy efficiency products and electricity grid infrastructure equipment suppliers.”
JEMA, another to outperform and another to clock up double-digit returns for the year: NAV total return of +13.6% compared to the S&P Emerging Europe, Middle East & Africa’s +11.9%. Good stock selection, a key contributor to the outperformance. As for the share price, don’t be fooled by the +0.9% total return for the year into thinking performance was pedestrian. Far from it: over the period, 31 October 2024 to 31 January 2025, the share price oscillated between 120.5p and 244.0p. Chairman Eric Sanderson and the Board believe this “is due to the uncertainty about the values attaching to our Russian shareholdings.” As the investment managers note “the Company’s Russian holdings continue to be subject to strict sanctions, and their valuations have been discounted accordingly.” Salvaging any value from these would be something of a bonus then.
Those Russian holdings, which are subject of ongoing litigation in the courts, of course, a legacy of the previous Russian-focused strategy. As Sanderson points out, very much a different strategy these days “The Company continues to invest in higher quality companies, with a tilt towards value and income and a focus on maximising total return for shareholders. The portfolio’s geographical focus is on Saudi Arabia, South Africa and the United Arab Emirates, which at the year end represented 21.6%, 17.0% and 14.4% of the portfolio respectively.” And the investment managers believe “The portfolio will continue to evolve over coming years as our target markets develop and deepen”. With the Russian court case approaching, some investors appear to have taken some money off the table, for now at least – share price finished the day 5p lower at 204p.
Numis: “Whilst it is positive to see a period of outperformance, we suspect that investors will be more focussed on the status of the Russian holdings, which continue to be held at a nominal value. We note there has been some progress with the sale of one Russian holding, Nebius (Yandex), following its sole listing on Western exchanges, although the Board emphasises the unlikeliness of this being the case for further holdings in the near future, whilst their remains uncertainty with respect to an appeal related to VTB’s court proceedings against JPMorgan entities.”
EOT can’t make it a hat trick of outperformers after NAV total return came in at -8.4% for the half year. That compares to the MSCI Europe Total Return Index’s -3.3% (sterling). At -10.6%, the share price fared worse. Weakness among the fund’s largest holdings, specifically previous high-flier Novo Nordisk, blamed as well as “our ‘style bias’” towards investing in “innovative, world-leading companies in other sectors”. Longer term, the tables are turned: the +10.5% annualised NAV total return since launch, almost double the benchmark’s +5.8%. Still, Chair Matthew Dobbs is not hiding behind that long-term track record “the results and our returns in recent years are clearly disappointing. Our Investment Manager pursues a differentiated, high conviction approach to investment and we, as a Board, along with the team at Devon are fully committed to returning the Company to its former ranking at the head of its peer group.”
Investment manager Alex Darwall sees plenty of reasons why the portfolio’s holdings will come good. Firstly, there’s valuation “We believe that our portfolio is better value than at any time since 2017.” Then there’s earnings “Our earnings forecasts for the portfolio companies are markedly higher than those projected for the wider market.” As for balance sheets, EOT’s companies “have less debt than most European listed companies”. And at some point, the macroeconomic environment is expected to become supportive of the fund’s strategy which is “to identify ‘winners through the cycle’, a strategy that has been thwarted somewhat by the huge money printing programmes of the COVID era. The extended business cycle will turn down at which point our companies’ earnings resilience will be clear.” And when it does “Our healthcare, technology and payments companies should all make good progress. We remain confident that our strategy of picking companies that compete and succeed on the world stage will be vindicated.” Shares were up 4p to 872p – perhaps investors thinking vindication will come sooner rather than later.
Winterflood: “Board has proposed to make additional tender offer for up to 25% of shares at 2% discount to NAV, expected to take place in Q2 2025. Key (performance) detractors included Novo Nordisk, Edenred, Dassault Systèmes, Infineon Technologies and Worldline. Performance also negatively impacted by EOT’s style bias, with no exposure to Financials, which was the best performing sector in the index. Further, performance also suffered from outflows from European equities.”
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