I’ve bought for the portfolio 4790 shares in WHR for 4k, they go xd tomorrow for 1.6p and then I’ll either add to the position or flip it, if it posts a profit.

Cash for re-investment, earmarked for RGL £1,898.00

I’ve sold the blog portfolio shares in ADIG for a total profit of £509.00, when the 38p a share earned but not received is included.

The main reason is that the dividend will fall and rule

Number one is to buy shares that pay a dividend to buy more shares that pay a dividend.

 At the same time, I could look to add shares that could do well from increased Government spending in key areas such as property and healthcare.

see below – Dividends sanity, TR vanity

current share price 94.15p (buyers for the Trust today)

dividend 6.87p a yield of 7.3%

Trading just below its NTAV

One for DYOR

Here’s my prediction for the best FTSE 100 stocks for H2

Jon Smith details keys events that he’s watching out for in the coming six months and explains which FTSE 100 stocks he expects to do well.

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.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services.

We’re in the second half of the year, with plenty on the horizon that could make for volatility in the stock market. It kicks off tomorrow (4 July) with the UK general election. In coming months, we’re due several major central bank meetings, inflation and other data releases that could impact FTSE 100 stocks. With that in mind, here’s how I think things could pan out.

Events ahead

If we start with the general election, I actually don’t think we see a huge market reaction if the Labour party win a majority. This is because this eventuality is widely expected by people. Investors don’t like unpredictability, but if things happen as expected, there’s not too much to be concerned about in the short term.

Looking ahead, I think that the main driver for the FTSE 100 will be inflation and the reaction of interest rates. The latest data showed that inflation is now back at 2%, the target level of the Bank of England. This should likely support several cuts in interest rates between now and the end of the year.

If my prediction is correct, I think that the best Footsie stocks for me to think about buying will be ones that stand to benefit from lower inflation and lower interest rates. At the same time, I could look to add shares that could do well from increased Government spending in key areas such as property and healthcare.

Next up

One example of a stock on my watchlist for H2 is Next (LSE:NXT). The fashion and homeware retailer has been a face on the high street for over four decades. Over the past year, the stock has outperformed, rallying by 32%.

I think the stock could continue to do well as inflation continues to moderate. Consumers should feel more confident with their finances without costs spiralling higher. This could see them spend more on clothing and home furnishings. I think Next is well positioned to benefit from this, in that it isn’t high-end luxury but more middle market.

Further, Next should benefit from lower debt costs. In the annual report, it mentioned how net debt reduced by £97m to £700m for 2023. This is great, but another benefit will be felt through lower financing costs going forward. If interest rates do fall, it’ll make issuing new debt less expensive. This ultimately should help to boost cash flow and profitability.

One risk is the problem that Next has with external factors. For example, in the latest quarterly report, it spoke of how demand might be lower due to wet spring weather. To be at the mercy of the natural elements isn’t something investors will be happy about!

Making a call

Ultimately, my predictions for the coming six months are based on how I see the world right now. People might (and do) disagree with me. Yet that’s the beauty of the stock market. It’s made up of buyers and sellers, with those that make the correct calls rewarded in the long run.

The latest published NAV 107.84 less 38p equates to 69.84p

current share price 45.6p a discount to NAV of approx 35%

Quoted XPayment, which means if u now sell, u still receive the payment of 38p.

A hold for the portfolio, awaiting further developments, the cash received to be used to buy the discounted shares in RGL.

Low-risk yield and solar know-how

02 Jul 2024 BST

Snapshot

• NextEnergy Solar burnishes its credentials as a top income stock
• NextEnergy Solar Fund’s ESG strategy and deeper dive into the financials – ICYMI
• NextEnergy Solar and Bluefield offer ‘attractive’ implied returns after de-rating, says Barclays
• NextEnergy Solar Fund’s ESG Vision: Insights from non-executive director Josephine Bush

About the company

About NextEnergy Solar Fund 

NESF is a specialist solar power renewable energy investment company listed on the premium segment of the London Stock Exchange that invests in utility-scale solar power plants and energy storage.  The Company may invest up to 30% of its gross asset value in non-UK OECD countries, 15% in solar-focused private equity structures, and 10% in energy storage.

NESF currently has a diversified portfolio comprising of the following:

• 99 operating solar assets across the UK and Italy (primarily on agricultural, industrial, and commercial sites)
• A $50m commitment into NextPower III ESG (a private solar infrastructure fund providing exposure to operating and in-development international solar assets)
• A 50MW co-investment into a Spanish solar project alongside NextPower III ESG, currently in construction
• A 50MW standalone battery storage project in Fife, Scotland, currently in construction (part of a 250MW joint venture with Eelpower)
• Two subsidy free UK solar ready-to-build projects (Hatherden 50MW & Whitecross 35MW)

The NESF portfolio has a combined installed power capacity of 865MW (excluding NextPower III MW on an equivalent look-through basis).

As at 31 December 2021, the Company had a gross asset value of £1,094 million, being the aggregate of the net asset value of the ordinary shares, the fair value of the preference shares and the amount of NESF Group debt outstanding, and a net asset value of £615million.                                              

NESF’s investment objective is to provide ordinary shareholders with attractive risk-adjusted returns, principally in the form of regular dividends, by investing in a diversified portfolio of solar energy and energy storage infrastructure assets.  The majority of NESF’s long-term cash flows are inflation-linked via UK government subsidies.

For further information on NESF please visit nextenergysolarfund.com 

Commitment to ESG

NESF is committed to ESG principles and responsible investment which make a meaningful contribution to reducing CO2 emissions through the generation of clean solar power. NESF will only select investments that meet the requirements of NEC Group’s Sustainable Investment Policy. Based on this policy, NESF benefits from NEC’s rigorous ESG due diligence on each investment. NESF is committed to reporting on its ESG performance in accordance with the UN Sustainable Development Goals framework and the EU Sustainable Finance Disclosure Regulation.

NESF has been awarded the London Stock Exchange’s Green Economy Mark and has been designated a Guernsey Green Fund by the Guernsey Financial Services Commission.

NESF’s sustainability-related disclosures in the financial services sector in accordance with Regulation (EU) 2019/2088 can be accessed on the ESG section of both the NESF website (nextenergysolarfund.com/esg/) & NEC Group website (nextenergycapital.com/sustainability/transparency-and-reporting/).

About NextEnergy Group

NESF is managed by NextEnergy Capital, part of the NextEnergy Group.  NextEnergy Group was founded in 2007 to become a leading market participant in the international solar sector.  Since its inception, it has been active in the development, construction and ownership of solar assets across jurisdictions.  NextEnergy Group operates via its three business units: NextEnergy Capital (Investment Management), WiseEnergy (Operating Asset Management) and Starlight (Asset Development).

NextEnergy Capital

NextEnergy Capital comprises the Group’s investment management activities.  To date, NEC has invested in over 325 individual solar plants for a capacity in excess of 2.3GW across it institutional funds. 
www.nextenergycapital.com

• NextEnergy Solar Fund (“NESF”) is a solar infrastructure investment company focused on the UK and other OECD countries, that is listed on the premium segment of the London Stock Exchange.  It currently owns 865MW spread among 99 individual assets in the UK and Italy, comprising a gross asset value of £1,094m.  NESF is one of the largest listed solar energy investment companies in the world.
• NextPower II (“NPII”) a private fund made up of 105 individual operating solar power plants and an installed capacity of 149MW, focused on consolidating the substantial, highly fragmented Italian solar market.  NPII was successfully divested in January 2022, a 2016 vintage vehicle that generated net IRRs to its investors in excess of 25%, versus a gross target of 10-12%.
• NextPower III ESG (“NPIII”) is a private fund exclusively focused on the international solar infrastructure sector, principally targeting projects in carefully selected OECD countries, including the US, Portugal, Spain, Chile, Poland and Italy. NPIII ESG is a fund that provides a positive social and environmental impact to the countries it has and will invest into. NPIII has completed its fundraise with a total of $896m, including a SMA raised.  The target of the fund was $750m.
• NextPower UK ESG (“NPUK ESG”) is a private unlevered fund investing in greenfield subsidy-free solar projects, with PPA’s, in the UK.  NPUK ESG was launched in December 2021.  The UK Infrastructure Bank is providing financing to the initial seed assets of the fund, and plans to invest up to £250m, half of the fund’s total target fund size, on a match-funding basis.

WiseEnergy

WiseEnergy® is NextEnergy Capital Group’s operating asset manager.  WiseEnergy is a leading specialist operating asset manager in the solar sector.  Since its founding, WiseEnergy has provided solar asset management, monitoring and technical due diligence services to over 1,300 utility-scale solar power plants with an installed capacity in excess of 2.2GW.  WiseEnergy clients comprise leading banks and equity financiers in the energy and infrastructure sector. 

www.wise-energy.com

Starlight

Starlight is NextEnergy Group’s development company that is active in the development phase of solar projects.  It has developed over 100 utility-scale projects internationally and continues to progress a large pipeline of c.2.5GW of both green and brownfield project developments across global geographies.

How it is doing

19 Jun 2024

NextEnergy Solar Fund Ltd (LSE:NESF) burnished its credentials as one ofFTSE 350’s top income stocks with an 11% increase in total dividends to 8.35p, giving a yield of 11%.

With the payout covered 1.3 times by earnings, the group has increased its target for the current year to 8.43p. It has also signed off a £20 million share buyback programme.

The guidance was given alongside full-year results, which revealed a modest decline in the net asset value (NAV) to 104.7p. NESF generated income of £80 million in the 12 months ended March 31, up £1 million on the year earlier.

Gearing was up marginally at 29.3% with the weighted average cost of capital 0.7 percentage points higher at 6.4%.

The Telegraph thinks CVC Income and Growth is a Buy for income seekers, while This is Money explains why RTW Biotech Opportunities could go off like a rocket.

By Frank Buhagiar•02 Jul, 2024•

Questor: This Hargreaves Lansdown bidder’s loan fund is a ‘buy’ for income seekers

CVC Capital Partners, which floated on the stock market in April 2024, is part of a consortium that recently bid 1,140p a share for the retail investment platform Hargreaves Lansdown. The Telegraph’s Questor tips CVC Income and Growth (CVCG) as a buy for income seekers. For over the past five years, CVCG’s sterling shares, which currently yield 7.5%, have generated a total return of +43.4% compared to the average +19.7% generated by six of the fund’s peers – and that average includes CVCG. Similar story over ten years with the fund returning +84.9%.

The majority of this sector-leading return has come from the fund’s quarterly dividends which are covered by income and gains made from the loans it provides to credit-impaired companies. Now, ‘Credit-impaired companies’ may set a few alarm bells ringing but The Telegraph tipster points out that, “The portfolio is evenly split between ‘performing credit’ where companies are meeting their loan repayments as they repair their ratings, and ‘credit opportunities’ where fund managers Pieter Staelens and Mitchell Glynn see the ability to buy undervalued debt ahead of a refinancing, rating upgrade or acquisition.” As the fund managers explain, a poor credit rating doesn’t necessarily make a business bad.

The key is picking the right business and the right kind of debt. Almost three-quarters of the 128 loans the fund holds are ranked senior. So, CVCG is first in line for repayment in the event the loanee goes under. The loans are also secured against assets, thereby protecting the fund further, while borrowers pay a margin over base rate on their loans adding another layer of protection. All of which leads Questor to conclude “the shares continue to offer good value for income investors.”

RTW BIOTECH OPPORTUNITIES: Innovation ‘super-cycle’ could see biotech fund go off like a Rocket

So says This is Money after speaking to RTW Biotech Opportunities’ Roderick Wong. For in the 15 years since he established fund manager RTW, which today oversees £5.5 billion of investments, never has “Wong been more excited about the investment case for life sciences and in particular biotechnology than now.” Two reasons cited for Wong’s bullishness: the sector’s emergence from a three-year bear market; and signs that biotech is in the ‘early stages of an innovation super-cycle’ thanks to new technologies. While AI may be stealing the limelight when it comes to technology at present, Wong believes investors should be taking a closer look at biotech too.

And for those wanting to invest in the sector, the £522m RTW Biotech Opportunities Trust he manages offers a diverse portfolio of companies at all stages of the corporate life cycle from start-ups to established listed businesses. For Wong likes to hold companies for their full life cycles. In the article, Wong says “We like to be in from the start when a company is private. We do our due diligence and then work closely with them, maybe taking a seat on the board, and gaining confidence as we go along. Yet unlike venture capitalists, we don’t exit when the company goes public. Often, we will stick with our investment and reap bigger rewards as a result.”

And the approach has generated sector-leading results. RTW Biotech Opportunities’ shares have generated a +45% return since the fund’s October 2019 launch. The average return from the biotech and healthcare sector? +22%. And that outperformance was achieved despite biotech having to endure a three-year bear market. Question is, what would the fund’s performance look like during an “innovation super-cycle”?

This Is Money

Compound growth: A powerful argument for investing long term© Provided by This Is Money

Investing over many years eventually reaches a ‘tipping point’ where your returns double what you’ve put in to date, highlights new research from Interactive Investor.

Putting £250 per month into investments returning 5 per cent a year would see a gain of £83 on your £3,000 total contributions, or 3 per cent, in year one.

This means that your returns after that year would represent just a small percentage of the total pot. 

But by year 10, the power of compounding would mean the portion delivered by investment growth would make up 30 per cent of the overall portfolio, and by year 20 it would be 72 per cent.

At year 26 it would hit 105 per cent – with a pot containing £78,000 worth of your monthly contributions over the period now worth £160,229.

Then you’ve reached the tipping point where your returns double what you’ve put in.

If you paid in the same amount but achieved an annual investment return of 7 per cent, it would take 18 years to reach the investment ‘tipping point’, calculates II.

You can use  This is Money’s long-term saving and investing calculator  to see how compounding works. When considering compounding, you also need to take into account inflation and charges.

Compounding returns offer a layer of protection against investment volatility, says Myron Jobson, senior personal finance analyst at II.

‘Generally, as your investment grows, compounding becomes more significant, and there’s a point where growth outpaces new contributions.

‘This varies for each individual’s investment strategy and market conditions. 

‘In our scenario, the investment tipping point is 26 years, but the reality is many investors will hit their financial goal, be it investing to buy a home or for retirement, a lot sooner.’

Five per cent growth: Impact of compounding interest over 30 years on £250 monthly contributions (Source: Interactive Investor)© Provided by This Is Money

Jobson explains: ‘The nature of investing means the annual rate of return isn’t fixed, meaning you can earn more or less in a given year, depending on the market environment.

Jobson adds that for pension savers, retirement investments are turbocharged by the tax relief and employer cash that are added to your own contributions.

‘This dual advantage not only amplifies the initial investment but also leverages compounding over time, accelerating the growth of the pension fund.’

Seven per cent growth: Impact of compounding interest over 30 years on £250 monthly  contributions (Source: Interactive Investor)© Provided by This Is Money

Pensions and the magic of compound growth 

Pensions are possibly the longest-term investment you will ever have, which makes them particularly fertile ground for compounding to work its magic.

Think of your own and your employer’s pension contributions as the seeds, tax relief as the water, your investment plan as the soil and compound growth as the sunshine, helping to grow what eventually becomes a mature pension pot for when you retire.

The investment ‘tipping point’: When do your returns overtake total contributions?© Provided by This Is Money

One of the beauties of pensions is that if you start paying into them early, as so many workers now do thanks to auto-enrolment kicking in at age 22 (set to come down to 18), you will benefit from around 45 years of compound growth from the investments within that pension.

In fact, assuming roughly similar average annual investment returns, the impact of compound growth for younger pension savers who maximise their workplace pension contributions in their early career rather than starting with lower contributions or even foregoing a pension altogether for more immediate priorities, can be really astonishing.

Someone who makes the same annual contribution of £2,000 a year for their whole working life, but misses five years of pension contributions in their twenties would have a pot £22,000 lower at retirement, at £121,450 rather than £143,215.

“Compounding can work against you too, in that percentage fees on investment products can add up the wrong way, magnifying the reduction in your investment pot over time”

However, if they choose to keep paying in when they are young and instead miss those five years of contributions when they are older, from 60 to 65, the impact on their pension pot is much smaller – with a pot size around £11,000 lower, at £131,895, highlighting the greater importance of contributions made early on to eventual pot size.

Unfortunately, compounding can work against you too, in that percentage fees on investment products can add up the wrong way, magnifying the reduction in your investment pot over time.

Of course if your investment grows by significantly more than the fee, the impact of this is reduced, but it’s worth keeping an eye on and making sure you aren’t being charged over the odds for an investment that isn’t delivering.

How to get the most out of long-term investing

Myron Jobson of Interactive Investor offers the following tips.

1. Take advantage of Isa allowances 

The shrinking capital gains and dividend tax allowances provide the impetus for investors to invest through a tax-efficient wrapper if they haven’t already done so.

The transfer, however, will involve selling and buying back shares, which could trigger a capital gains tax bill.

Over the long term Bed & Isa is likely to outweigh the charges that might apply.

2. Consider using your partner’s Isa allowance

You can also help reduce your taxable income by transferring assets between spouses or civil partners.

Each year you can shelter £20,000 from tax in an Isa – so £40,000 between two.

Only married couples and civil partners can transfer assets tax-free, meaning those who aren’t could potentially trigger a tax liability.

The investment ‘tipping point’: When do your returns overtake total contributions?© Provided by This Is Money

Money expert Becky O’Connor of PensionBee reveals the most useful – and profitable – real world sums.

Compound growth, which generates massive gains the longer you save and invest, is lesson number one… so what are the others?

3. Understand your risk profile

Risk is an inherent part of investing, but it’s a tough balance. Take too much risk, and you might find yourself racking up some painful investing lessons.

But taking too little (or no risk in the case of cash) is a risky strategy in itself. It could have a hugely detrimental effect on your finances in the future because you might not reach your goals.

And our risk appetite isn’t static. It can change as our circumstances change so needs reviewing regularly.

4. Diversify your investments

This reduces the risk of any one stock in the portfolio hurting the overall performance.

But diversification doesn’t just mean investing in different stocks. It also means having exposure to different sectors, assets, and regions.

5. Rebalance your investments

Trimming the excesses and redirecting funds into underperforming assets ensures that your risk-return equilibrium remains intact.

This calculated approach of buying low and selling high has the potential to bolster long-term returns.

Whether nearing retirement or sprinting towards a shorter investment horizon, rebalancing grants the opportunity to recalibrate allocations to achieve the desired financial destination.

6. Review costs and fees

Investors cannot control the market, but they can control how much they pay to invest. Understand the costs associated with your investments – not least the platform charge.

7. Drip feed your investments

A good and proven way of lowering your investment risk is by investing small amounts regularly. Most often, investors do this by drip-feeding investments monthly to help smooth out the inevitable bumps in the market.

The advantage is that you also buy fewer shares when prices are high and more when prices are low – a process known as pound-cost averaging.

8. Set clear goals

Define your financial goals and time horizon before making investment decisions. Avoid making impulsive decisions based on short-term market fluctuations. Stick to your investment plan.

£££££££££££££££££

Pensions are possibly the longest-term investment you will ever have, which makes them particularly fertile ground for compounding to work its magic.

Buying your own house is most probably the best investment u will ever make as not only do u have compound interest working for u, u also have somewhere to live as u wait for the magic to happen.

First the chart. It includes dividends earned but re-invested wherever your want is.

U will notice the 2 year period where the share price flatlined, so belt and braces, the importance of dividends.

If u bought near to the low u have achieved the holy grail of investing in that u can take out your stake and re-invest in a higher yielder, while still receiving a dividend on a Trust that sits in your account at zero, nil cost.

Part of the dividend is paid from capital but u wouldn’t care tuppence where the cash came from, when u spend it. In fact it means u don’t have to sell any shares to achieve the yield.

Tristan Hillgarth, Chairman, commented:

“I am delighted to report a 23.6% increase in the Company’s dividend for our current financial year. Since we adopted the enhanced dividend policy in 2016, shareholders in the Company have seen an increase in their dividends of 613%, equivalent to over 24% per annum, and we have delivered nine consecutive annual dividend increases.

“This growth is a function of the outstanding returns that our Portfolio Managers have generated over this period, assisted by the fact that they are unconstrained by the requirement to achieve a certain level of income. This allows them to select the ‘best’ stocks, rather than those that fit a specific income profile.

“Our capacity to part-fund dividends from our significant level of realised capital profits provides JGGI with the means to meet our shareholders’ desire for income, combined with clarity over dividend payments for the coming year.”

Now those who have been paying attention will know that 4% is not 7%, so if u want to buy u might need to pair trade it with a higher yielder, although IF the share price keeps rising the next dividend yield will also rise on your buying price.

If u had bought at 250p the current fcast dividend is 22.8p a yield on your buying price of 9%

The Trust usually trades above NAV as it’s been an outperforming Trust.

Should u buy today, maybe not unless u have a De Lorean parked in your garage but one to include in your buy list the next time Mr Market gives u the chance to buy.

Kepler

Bull

• Merger of assets leads to further benefits that come with increased scale
• Strong relative and absolute performance over multiple time frames
• 4% of financial year-end NAV dividend policy can offer good income

Bear

• Consistently trades at a premium to NAV, which can impact returns if premium falls
• Growth bias may enhance volatility compared with other strategies in the Global Equity Income sector
• Dividend may experience some volatility in tandem with NAV