Helping your money work for you.

Equity income investing isn’t just for retirees seeking an additional income stream. Investors with a longer time horizon can also benefit, using dividend reinvestment to help grow their ISA or SIPP and build wealth over time.

Author

Aberdeen Investments

Date: 20 Jul 2026

Glorious summer weather is for pottering in the garden, bike rides and barbecues. It is not conducive to sitting in front of a screen, monitoring your portfolio, poring over performance tables or researching new investment options.

Indeed, many people favour a low-maintenance approach to their finances, regardless of the weather. 

They know that planning for retirement and building long-term wealth are hugely important – but it’s not how they would choose to spend their spare hours, so their investment priorities revolve around long-term steady growth, reliability and not too much market choppiness. 

If that’s the way you feel, it’s worth considering income investing – channelling your money into investment trusts designed to generate regular cash distributions to shareholders through a portfolio of dividend-paying businesses. Such an approach could well suit your needs even if you don’t yet need the investment income potential. 

In this article we’ll be focusing on equity income trusts, but income-focused trusts may also use other assets such as bonds, infrastructure or property. 

Equity income for income or growth

Equity income investing is actually a somewhat misleading title. It’s certainly true that the dividends that may be paid out by these investment trusts are great for retirees looking for additional income to supplement their pensions in a sustainable way. 

But what if you’re still working, decades from retirement and very much focused on building up your ISA or SIPP through regular contributions? The good news is that equity income trusts can also work very effectively if you don’t require an immediate cash flow.

Crucially, you don’t have to take your investment income as cash withdrawals. You have the option of automatically channelling it back into additional shares in the same investment trust, by reinvesting your dividends. 

If you hold your shares through an online platform (as most retail investors tend to do these days) you can easily arrange for any dividends you select to be reinvested automatically. The service is cheap to set up. Interactive investor, for example, charges just 99p per trade. If you hold your shares on the main register you can still participate by enrolling in a Dividend Reinvestment Plan (DRIP). Whichever way you invest, once up and running dividend reinvestment can be a remarkably painless way of boosting your long-term returns. 

Compounding at work

And it really can make a big difference. That’s because you’re taking advantage of a phenomenon known as compounding, whereby your new shares themselves generate dividends, which in turn can be reinvested into additional shares, and so on. 

Over the long term, compounding can have a profound effect on the value of your portfolio. As a simple example, let’s consider an investor, Ella, who has £1,000 to invest in an equity income investment trust. 

Ella is able to contribute an additional £100 per month, so £1,200 per year, to her investment. The share price rises by an average of 5% a year; the trust also yields 5% a year and the dividend payout grows at 2% a year. 

If Ella takes the dividend cash and uses it to fund an exotic holiday every year, after 10 years her investment is worth £16,700, a total return of 29% on her capital investment. However, if she reinvests them back into the trust, it grows to £21,000 over that time, providing a total return of 61%. 

Importantly, the gap widens exponentially – so after 30 years Ella’s trust with dividends withdrawn is worth £84,000 (a return on capital of 127%), but with dividends ploughed back in it’s worth more than 75% more, at £149,000. That’s a return of over 300% on the capital she’s invested. 

The attraction of potential dividend growth 

Investment trusts are a natural choice for income investors, because the trust structure allows them to hold back some of the dividends received from the underlying companies and build up reserves. That cash cushion can then be drawn on by the board to improve payouts to shareholders in leaner years, effectively smoothing dividend ups and downs. 

But some trust boards have gone further, committing themselves to a target of dividend increases each year. There are no guarantees, but the ability to draw on dividend reserves means that those trusts that prioritise income can generally stick to their knitting. 

Indeed, the importance of reliable dividend growth for shareholders reliant on investment income has been brought to the fore by the Association of Investment Companies (AIC). Its Dividend Heroes table comprises the 20 trusts that have achieved more than 20 years of growth. 

The AIC has also introduced the Next Generation Dividend Heroes to highlight the 30 names with between 10 and 20 years of dividend growth under their belts. 

Thus, for instance, Dividend Hero Aberdeen Equity Income Trust (AEI), with a current 5.2% yield, aims for dividend growth ahead of inflation each year; it has chalked up 25 consecutive years of dividend rises. Meanwhile Aberdeen Asian Income Fund (AAIF), yielding 5.1%, is a next generation hero with 16 years of uplift to its name. 

For these and the other dividend heroes, this status is highly prized, giving shareholders additional reassurance that the board will do all it can to protect its dividend growth track record over coming years.

Moreover, while dividend growth may seem less significant to investors looking at long-term total returns rather than an immediate income stream, it does mean that they receive a reliable and rising chunk of return each year – even if stock markets are struggling and capital growth is hard to come by.

A less volatile ride 

There are further advantages to equity income trusts for investors in search of a relatively quiet life in investment terms. 

The dividend-paying companies that attract equity income managers tend to be more mature, established businesses with strong earnings and little debt, well-placed to return cash to their shareholders. Such businesses also tend to show greater resilience in the face of market downturns. As a consequence, equity income investments may experience less volatility than their growth-oriented peers. 

But importantly, maturity does not necessarily equate to stagnancy. For example, a £10,000 investment in AEI, which invests in the managers’ best ideas across the market cap spectrum of UK income-paying businesses, would have more than doubled in value to £21,600 over the 10 years to 6 July, assuming dividends were reinvested.

AAIF’s focus on the dynamic Asian economies has served it even better over the decade, and £10,000 invested in July 2016 with dividends reinvested would have increased by 200%, to £30,000.  

Conclusion 

Equity investors seeking capital growth plus a secure, sustainable and rising income stream to keep them abreast of inflation will be well-served by equity income investment trusts such as AEI or AAIF. But they may also be an excellent choice for those with their sights on rewarding and reliable total returns in decades to come. 

Aberdeen Asian Income Fund important information: 

Risk factors you should consider prior to investing: 

• The value of investments, and the income from them, can go down as well as up and investors may get back less than the amount invested. 
• Past performance is not a guide to future results. 
• Investment in the Company may not be appropriate for investors who plan to withdraw their money within 5 years. 
• The Company may borrow to finance further investment (gearing). The use of gearing is likely to lead to volatility in the Net Asset Value (NAV) meaning that any movement in the value of the company’s assets will result in a magnified movement in the NAV. 
• The Company may accumulate investment positions which represent more than normal trading volumes which may make it difficult to realise investments and may lead to volatility in the market price of the Company’s shares. 
• The Company may charge expenses to capital which may erode the capital value of the investment. 
• Movements in exchange rates will impact on both the level of income received and the capital value of your investment.
•  There is no guarantee that the market price of the Company’s shares will fully reflect their underlying Net Asset Value. 
• As with all stock exchange investments the value of the Company’s shares purchased will immediately fall by the difference between the buying and selling prices, the bid-offer spread. If trading volumes fall, the bid-offer spread can widen. 
• The Company invests in emerging markets which tend to be more volatile than mature markets and the value of your investment could move sharply up or down. 
• Yields are estimated figures and may fluctuate, there are no guarantees that future dividends will match or exceed historic dividends and certain investors may be subject to further tax on dividends. 
• Derivatives may be used, subject to restrictions set out for the Company, in order to manage risk and generate income. The market in derivatives can be volatile and there is a higher than average risk of loss

Performance 

Discrete performance (%)

	31/05/26	31/05/25	31/05/24	31/05/23	31/05/22
Share Price	68.2	8.9	8.2	(1.3)	0.1
NAV	58.7	7.3	8.9	(5.6)	5.6
MSCI AC Asia Pacific ex Japan	51.7	8.0	9.6	(6.0)	(8.3)

Total return; NAV to NAV, net income reinvested, GBP. Share price total return is on a mid-to-mid basis.

Dividend calculations are to reinvest as at the ex-dividend date. NAV returns based on NAVs with debt valued at fair value.

Source: Aberdeen and Morningstar.

Past performance is not a guide to future results.

Aberdeen Equity Income Trust important information: 

Risk factors you should consider prior to investing:

• The value of investments, and the income from them, can go down as well as up and investors may get back less than the  
  amount invested.
• Past performance is not a guide to future results.
• Investment in the Company may not be appropriate for investors who plan to withdraw their money within 5 years.
• There is no guarantee that the market price of the Company’s shares will fully reflect their underlying Net Asset Value.
• As with all stock exchange investments the value of the Company’s shares purchased will immediately fall by the difference between the buying and selling prices, the bid-offer spread. If trading volumes fall, the bid-offer spread can widen.
• The Company may borrow to finance further investment (gearing). The use of gearing is likely to lead to volatility in the Net Asset Value (NAV) meaning that any movement in the value of the company’s assets will result in a magnified movement in the NAV.
• The Company may accumulate investment positions which represent more than normal trading volumes which may make it difficult to realise investments and may lead to volatility in the market price of the Company’s shares.
• Yields are estimated figures and may fluctuate, there are no guarantees that future dividends will match or exceed historic dividends and certain investors may be subject to further tax on dividends.
• The Company may charge expenses to capital which may erode the capital value of the investment.
• The Alternative Investment Market (AIM) is a flexible, international market that offers small and growing companies the benefits of trading on a world-class public market within a regulatory environment designed specifically for them. AIM is owned and operated by the London Stock Exchange. Companies that trade on AIM may be harder to buy and sell than larger companies and their share prices may move up and down very sharply because they have lower trading volumes and also because of the nature of the companies themselves. In times of economic difficulty, companies listed on AIM could fail altogether and you could lose all your money.
• The Company invests in the securities of smaller companies which are likely to carry a higher degree of risk than larger companies.

Performance

Discrete performance (%)

	31/05/26	31/05/25	31/05/24	31/05/23	31/05/22
Share Price	29.8	20.2	6.8	(8.2)	6.7
NAV	30.3	10.7	14.8	(12.7)	4.7
FTSE All-Share Index	21.6	9.4	15.4	0.4	8.3

Source: Aberdeen, total returns. The percentage growth figures are calculated over periods on a mid to mid basis. NAV total returns are calculated on a cum-income basis.

Past performance is not a guide to future results.

What is FIRE and can it help you retire early?

Achieving ‘FIRE’ – financial independence, retire early – involves extreme levels of frugality and disciplined investing, but can it really help you achieve early retirement and financial freedom?

By Sam Shaw

Do you dream of giving up the day job and enjoying the freedom that would bring? You’re not alone. But many don’t want to wait until retirement age winter years to kick back. Can the FIRE movement help?

FIRE – financial independence, retire early – is a personal finance strategy that involves extreme investing and frugality during your working life in order to enable early retirement and financial freedom. In theory.

The concept was first established in the US in the 1990s, and encourages a series of tactics that have the potential to allow someone to give up work in their 40s.

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So, how does FIRE work and can it really help you stop work sooner and ‘retire’ comfortably

What types of FIRE strategy are there?

There are number if ways you can approach a FIRE strategy. These include:

• ‘LeanFIRE’ requires strict frugality and living on a bare minimum budget to achieve your goals faster;
• ‘FatFIRE’ means putting significantly larger amounts away in the hope of a more luxurious retirement;
• ‘BaristaFIRE’ strives for an early retirement funded by a healthy income-generating investment pot, topped up with a part-time or low-stress job.

Katharine Photiou, managing director, workplace savings at Legal & General (L&G) says the approach that appeals to most people is likely the third, because it offers maximum choice for less sacrifice.

“We go from birth to nursery, into primary school, then secondary school, university or further education, then work… there’s all this structure and process. There’s no sense of freedom.”

She says the true benefit of FIRE-related movements is raising awareness of money matters.

“They shift the conversation from being one of ‘when can I retire’ to one of financial freedom. And anything that gets people thinking about their finances – especially encouraging youngsters to engage with their finances sooner – is positive.”

If FIRE taken to the letter feels extreme, she says thinking about the kind of life you want to live, what makes you happy or how much is enough are healthier conversations.

“At its heart, FIRE is about control, flexibility, choice and having options. Having a career break, reducing your hours, starting your own business or taking a sabbatical, these are all positive.”

What can the FIRE movement teach you?

Louise Matthews is an advertising copywriter who lives in North London. She stumbled upon the Rebel Finance School – which runs courses to help people better manage their money (and advocates the FIRE movement) – on Facebook.

“At first the group felt quite aspirational, and at times annoying,” she says. “People were talking about having a lot of money and it didn’t feel aligned to my situation. I almost left a couple of times. But since participating in the course, I’m finding it more helpful – plus a lot more people have joined who are just starting out and have debt questions.”

Matthews was self-employed for over a decade before taking a full-time job two years ago, seeking financial security as freelance life was looking more precarious.

“My partner started his own business about five years ago and hasn’t been able to contribute much to the household bills, so it’s pretty much all on my shoulders.

The couple doesn’t have a mortgage (they rent from a private landlord), nor any real savings besides a £3,000 nest egg set aside for their daughter. Matthews has around £50,000 saved into a pension.

“Finances-wise, we’re in quite a bit of debt, which was my impetus for doing the course. I have a personal loan with around £11,000 still outstanding (it was £25,000 so I’ve paid quite a bit off over the past two years), and another £14,000 on interest free credit cards.”

One lesson the course teaches is to try and put away £1,000 into an emergency fund before proactively paying off any debt.

Like many Brits, even though she’s only 42, she’s feeling the consequences of not starting sooner.

“I grew up with a mentality that money is fun money – ‘you only live once’ – that has made it hard to get out of debt. I used to say ‘yes’ to everything and worry about it later, hence having lots of interest-free credit cards,” she says.

Financial independence, or freedom, for Matthews isn’t about giving everything up to retire in her 40s, but about building better habits for a financially ‘freer’ future.

“What I’ve learnt is that [my lifestyle] isn’t sustainable. I don’t want to be in debt anymore. So my priority is to work hard to get out of it.”

Why investing earlier is so important

L&G’s Decades Ahead research estimates around nine million people aged 25-54 are currently not on track for an adequate retirement, taking into account basic needs, current income and housing costs.

Starting early and taking small steps beyond the bare minimum (like the 8% auto-enrolment through a workplace pension) has such a greater impact than thinking about saving huge amounts, says Photiou.

“A 27-year-old putting in just an extra £30 a month, at state pension age would have an additional £100,000. Just invest as early as you can, and stay invested.”

Alex King, founder of personal finance education platform Generation Money says it’s worth bearing in mind that, traditionally, the FIRE movement came from the US, so to beware guidance may be aimed at different audiences.

Done well, he says FIRE can deliver real freedom, but it relies on strong earnings, careful planning and navigating risks like inflation, market volatility and longevity.

Is FIRE for you?

There are limitations to such strategies.

Having a reliable income is a basic starting point. Being employed obviously helps, because of the employer contributions on offer.

It’s more challenging if you have dependants, be they children or elderly parents, says Photiou.

Anyone renting or paying off a mortgage has further outlay – especially high if they live in London or another major city.

“FIRE has clear appeal but works best for a specific group,” says King.

“In the UK, it favours higher earners who can save aggressively and benefit from higher pension tax relief, while keeping spending in check. At its core, it’s a simple mix of disciplined saving and smart use of tax wrappers like ISAs and pensions.”

So while the dream may be to kick back and relax for the next 40 years, the reality of ever achieving that looks quite different.

Recent years have thrown a series of cost-of-living challenges, with the majority of people undersaving and underinvesting.

Rules of thumb around optimal savings rates vary but assuming 8%-12% for a moderate retirement – based on a ‘normal’ retirement age, anyone hoping to retire sooner needs to do some serious budgeting.

In Australia, they suggest a 15% contribution rate, while in the US many suggest a ‘half your age’ savings rate (if you’re starting age 20, save 10% of your salary; if you’re starting at 30, 15%; those starting at 40 should save 20% and so on).

But these frameworks or ‘rules’ are blunt instruments, overlooking a multitude of factors.

Traditional retirement plans talk about a U-shaped expenditure path, with more outlay at the beginning, followed by a period of lower outgoings, which may pick up again if long-term care has to be factored in.

Photiou says: “The Australians call them the go-go years, the slow-go years and the no-go years.”

But if you’re looking at FIRE, you’ll likely be wanting more go-go, and less slow-go. So Photiou suggests a higher proportion of working life salary will be required.

Like the sound of FIRE?

L&G have kindly crunched some numbers for MoneyWeek using certain assumptions such as starting work age 22 and using the minimum, moderate and comfortable lifestyle costs as estimated by Pensions UK in its Retirement Living Standards.

3 key things to know before you start investing for passive income

Want to start investing to build a sizeable portfolio and second income? Here are some important considerations to take on board first.

Posted by

Ben McPoland

Published 8 September, 2025

You’re reading a free article with opinions that may differ from The Twelfth Magpie’s Premium Investing Services. Become a member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. 

Many people start investing because of the lure of passive income. This is understandable, as enough dividends flowing into an investing account may make it possible to escape the rat race and travel the world.  

So, rather than a boss breathing down your neck, you could instead be enjoying a cool ocean breeze on a Bali beach. It sounds wonderful, and lots of people have achieved it well before retirement age. 

However, without wanting to rain on anyone’s passive income dream parade, it’s vital to keep three things in mind when it comes to dividend investing.

Watch out for yield traps

The first is that not all that glitters is gold. I mean, just because a stock carries a massive dividend yield, it doesn’t mean the income is in the bag. It could be a yield trap.

Take WPP (LSE:WPP), for instance. The FTSE 100 advertising group currently has an 8% yield, which is the fourth-highest in the blue-chip index. It towers above the index’s 3.3% average and was 9%+ not long ago.

However, this is just the backwards-looking yield, and is the result of a falling share price. It doesn’t say what will come next.

WPP has lost 51% of its value this year. Often, this is a red flag. It signals that the market is deeply concerned about something, and this needs serious attention from would-be investors.

Dividends are not bullet-proof

Next, individual payouts are not guranteed. Returning to WPP, the firm just slashed its interim dividend by 50%, from 15p to 7.5p per share. So the real yield when investing today is under 8%.

In H1, WPP’s operating profit plunged 48%, while pre-tax profits crashed by 71%. This was due to falling client spending and fierce competition across the industry.

Meanwhile, investors are also concerned about the impact of AI on ad agencies, with new cutting-edge capabilities automating parts of ad creation and placement (the ‘where/when’ bit).

However, WPP has a new CEO at the helm, with a turnaround plan underway to survive in the age of AI. So it’s not inevitable that the company is doomed to perpetual decline.

Looking ahead, analysts see the dividend declining both this year and next. Yet, this still gives a well-covered forward yield of 6.3%, based on current forecasts. That’s around a fifth less than the headline 8%, though.

Personally, this isn’t a stock I am considering. The long-term income prospects seem too uncertain.

Tax realities

Third, most UK dividend income received outside of a Stocks and Shares ISA is taxed. So this needs to be taken into account.

Everyone gets a small dividend allowance of £500 per year. Anything above that is taxed, depending on your income band.

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.

Still worth pursuing

With those reality checks out of the way, I want to end on a positive note by highlighting how it’s possible to mitigate these three things.

On yield traps, basic research can be done to assess a company’s financial health and prospects. Meanwhile, owning a diversified portfolio of shares can help cushion any possible dividend cuts.

Finally, any income and returns generated in a Stocks and Shares ISA is tax-free, with the annual contribution allowance of £20,000 a year. Investing £1,000 a month at a 9% return could build a £1m ISA portfolio within 25 years.

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

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

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

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

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

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

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

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

Kevin Wallen
Publisher
Contrarian Outlook

NextEnergy Solar Fund Limited

(“NESF” or “the Company”)

 First Interim Dividend Declaration

NextEnergy Solar Fund, a specialist investor in solar energy and energy storage, is pleased to announce its first interim dividend of 1.77p per Ordinary Share in respect of the quarter ended 30 June 2026.

As previously announced, the Company’s dividend policy is to distribute 75% of operating cash flows as dividends to Ordinary Shareholders. The Board confirms that the first interim dividend has been declared in accordance with this policy.

The level of the first interim dividend reflects the seasonal generation profile of the Company’s solar portfolio, with electricity production and associated cash generation typically weighted towards the summer months. As a result, dividend payments may vary between quarters and are not expected to be evenly distributed throughout the financial year.

The first interim dividend of 1.77p per Ordinary Share will be paid on 30 September 2026 to Ordinary Shareholders on the register as at the close of business on 14 August 2026. The ex-dividend date is 13 August 2026.

The UK funds having an even better year than the record-breaking FTSE 100

Wednesday, August 5, 2026

Eve Maddock-Jones

Funds and Investment Trust Writer

The FTSE 100 is currently on track for its best year since its conception in 1984, defying a downturn in other equity markets which have been burdened by a fall in tech.

Year-to-date, the UK’s premier index is beating both the MSCI All-Country World Index and the S&P 500, with an 11.5% total return versus 11.3% and 9.8%, respectively, according to data from FE Analytics.

AJ Bell’s Head of Financial Analysis Danni Hewson said that part of this positive performance could be down to the rise in oil prices due to the ongoing war in Iran as the UK is home to some of the largest oil companies on the market, BP and Shell, alongside a strong earnings season from some of the FTSE’s big hitters.

While it’s been a strong year for the FTSE 100 so far, 95 out of 355 UK-focused funds have done even better.

AJ Bell took a deep dive into the dedicated UK funds which have beaten the main benchmark’s 11.5% total returns. And as a bonus, which ones have been doing so for many, many years now.

Small caps are leading the pack

One group storming ahead of the FTSE 100 so far this year is UK small-cap funds.

The Odyssean Investment Trust and Premier Miton UK Smaller Companies have made the best returns so far this year among UK funds, up 32.5% and 24.4%, respectively.

They were joined by fellow small-cap funds Stonehage Fleming AIM and the Henderson Smaller Companies Investment Trust.

These funds invest in smaller stocks in the £400-500 million range, versus those that are part of the FTSE 100 and valued at billions of pounds.

It’s not a blanket case that the small-cap sector as a whole has outpaced the FTSE 100 though. The blue-chip index is the highest returning UK benchmark this year, with the FTSE Small Cap making 9.1% year-to-date, a 23% disparity.

But, the small-cap sector is as a whole, doing better this year than it has been longer term.

Over five years the average IA UK Smaller Companies fund would have delivered some of the poorest total returns available, ranking 48th out of 51 sectors. But looking over the past six months and this pattern has shifted, with UK Small-Caps now moving into the top 10.

There are several drivers behind this but two main ones are depressed valuations making UK stocks cheap, and ongoing merger and acquisition activities.

Smaller companies often are more closely tied to the economic health of the country they’re listed in than the big fish of the market, making them more sensitive to factors like higher interest rates, something investors have become increasingly concerned about with the ongoing war and rising cost of goods.

But, smaller companies have started to become more insulated from these bouts of domestic dysfunction than they have been historically due to how globalised markets as a whole have become.

Data by Artemis found that roughly 40% of UK small-cap sales are generated overseas now. This is a far cry from the FTSE 100’s 75-80% rate, but higher than it was a decade ago.

This means that UK-quoted smaller companies with predominantly global revenues have served investors well, helping to insulate returns from UK specific issues.

Income funds

Around a third of the funds beating the FTSE 100 were income focused, a sector which tends to have a high exposure to areas like banks, defense, energy, and commodities, which have rallied this year.

Higher interest rates boosted bank profitability and cash generation, allowing firms such as NatWest, Lloyds and HSBC to increase dividends and share buybacks. Financial stocks were among the strongest contributors to UK equity income fund returns this year, with Lloyds and NatWest’s share prices growing 20% and 13%, respectively, this year.

Funds beating the FTSE over a decade

The FTSE 100’s stellar run has drawn obvious attention to portfolios affiliated with it, but AJ found that 13 funds have actually bested the benchmark for least a decade.

Artemis SmartGARP UK Equity has made the most since 2016 at almost 275%, combining the active management of long-time manager Philip Wolstencroft and the firm’s in-house namesake stock-screening software, which aims to help them find ‘growth at a reasonable price’.

Many of the funds achieving this outperformance are stalwarts of the UK equity space, such as Fidelity Special Values, Temple Bar Investment Trust, JOHCM UK Equity Income and its sister JOHCM UK Dynamic. All of them boast over £1 billion in assets under management and are among the most widely held UK-focused funds with AJ Bell DIY investors as well.

All four of the aforementioned have been run by the same respective managers for the past decade but having varying investment styles and thesis, with Fidelity standing apart the most as a value focused fund.

Renewables Infrastructure Grp (The) Dividend Declaration

RNS Regulatory News

Renewables Infrastructure Grp (The)

4 August 2026

The Renewables Infrastructure Group Limited

Interim Dividend

The Renewables Infrastructure Group Limited (the “Company”) is pleased to announce the second quarterly interim dividend in respect of the three month period to 30 June 2026 of 1.8875 pence per ordinary share (the “Q2 Dividend”). The shares will go ex-dividend on 13 August 2026 and the Q2 Dividend will be paid on 30 September 2026 to shareholders on the register as at the close of business on 14 August 2026.

For as long as the Company’s shares trade at a discount wider than 10% to NAV, the Board does not intend to offer a scrip dividend alternative.

Markets seem expensive: What do the numbers say?

Monday, August 3, 2026

Jeremy Ocansey

Senior Investments Strategist

As markets continued to new highs this year, the increases have made some investors nervous about a possible bubble.

The nerves are understandable, considering the amount of excitement around AI while a lot about its capabilities remains unclear. However, when we look at the numbers across most major markets, share price growth in the last year has been supported by rising earnings, rather than indiscriminate valuation expansion (see table below).

This is a different to the late 1990s, where the dotcom bubble was characterised by a sharp rerating of future growth expectations, with valuations expanding far faster than realised earnings. Today’s market is not valuation-cheap, particularly in the US, but the bulk of returns have been underpinned by stronger earnings. Investors have been paying up for growth, but they have also been receiving growth. 

The strongest earnings momentum remains in the US, Emerging markets and Asia Pacific, as seen in the dashboard below. Emerging markets earnings in Asia look especially strong in companies focussed on the AI hardware cycle. Korea and Taiwan have stood out in recent months within EM. Taiwan’s earnings strength, for example, is heavily linked to advanced semiconductor manufacturing (mostly from Taiwan Semiconductor Manufacturing Company – TSMC), led by demand for leading-edge logic chips from the US large cap tech firms. Meanwhile, Korea has also benefited from the rebound in memory pricing and the surge in high-bandwidth memory demand, where its large chipmakers such as Samsung and SK Hynix are globally dominant. These markets are narrow, but the earnings impulse is powerful, with the AI build-out flowing directly into exports, revenues, margins and upgrades across Emerging markets (see chart below). 

In the US, the earnings cycle has been dominated by similar themes surrounding artificial intelligence. Some of the largest tech companies in the US have increased their spending on building out AI capability and data centres, but have also been able to stay largely profitable. Double-digit earnings growth expectations therefore remain, while the wider US market in general has benefited from resilient consumer demand and productivity gains from AI investment. This explains why US equities have continued to compound despite elevated starting valuations, since earnings have done the heavy lifting.

Japan is also robust from an earnings momentum perspective, though for different reasons. Earnings have been helped by corporate governance reform, better capital discipline, rising buybacks, improved return on equity and a reflationary domestic backdrop. A competitive currency has also supported exporters, but the more durable story is improving corporate behaviour and a stronger nominal growth environment. This has meant Japan’s return on investment and company profit margins are improving at rates well above historic average trends in recent months.

In contrast, earnings growth has been slowest in China and the Eurozone. China’s weakness reflects the lingering property downturn, subdued household confidence, deflationary pressure and limited appetite for broad-based fiscal stimulus. Exporters and selected technology firms are performing better, but domestic demand remains too soft to generate a convincing earnings recovery. In the Eurozone, earnings are being held back by weak manufacturing, high energy costs, soft external demand and tighter monetary policy expectations.

Importantly, earnings revisions have broadly continued to rise despite the Iran war and challenging macro backdrop. This is because analysts have so far treated the shock as a risk to costs and valuations, rather than as a hit to demand. Higher oil prices are pushing up energy sector earnings estimates globally, while the technology companies driving profit growth have generally maintained guidance and margins (see below).

While earnings across the globe look strong for now, there’s always risks that this could change. But for now, those risks haven’t come to fruition. A prolonged Iran conflict could keep oil and gas prices elevated, keeping inflation expectations and bond yields elevated while tightening financial conditions. That would threaten margins, increase the scope for rate hikes and put pressure on equity valuations. Other risks are aplenty, such as rising supply from new IPOs, market concentration, disappointment in AI returns on investment, and tariff uncertainty, to name a few.

However, overall strong current earnings growth suggests equity returns can remain healthy for now, provided profit delivery can expand beyond the AI theme into the broader market. The key is to stay constructive but disciplined: earnings support risk assets, but diversification across regions, sectors and styles remains essential given the wide range of possible macro and geopolitical outcomes.

Below are the estimated xd dates for the SNOWBALL.

I prefer not to detail the holdings in the SNOWBALL as your snowball should be different to the SNOWBALL as it’s dependent on the number of years before your drawdown date.

The current target is to earn blended income of 1k a month which the SNOWBALL will earn this year but next year it’s doubtful that figure will be equalled.

Could your pension last to your 100th birthday? Here’s how

Friday, July 31, 2026

Sarah Coles

Related news

The number of people aged 100 or more has doubled over the past 20 years, raising the point that as life expectancy continues to grow so to must our pension calculations.

According to the latest government figures, there were 15,172 people who were at least 100 years old, two thirds of which were women.

When you’re planning for retirement, it’s easy to consider your own parents or grandparents as a benchmark, and assume you’ll live roughly as long.

However, this could mean you vastly underestimate how long you’ll live for – and how long your retirement income needs to last. This means that we all need to consider how we would keep paying the bills if we lived longer than average.

Let’s do the pension math’s

The first step is to use a pension calculator to see what you may be able to build by retirement and how long the income is likely to last. If there’s a shortfall, it’s worth considering boosting your pension contributions, planning for a longer working life, or rethinking your income expectations in your later years.

Most of these calculators will give you the option of factoring in the state pension. It’s worth doing the calculations both with and without, to see where you stand.

Nobody is suggesting that the state pension will disappear, but there’s always the chance the state pension age will rise or the triple lock will be replaced. When you’re forecasting so far ahead, you can’t guarantee state benefits will remain completely unchanged.

How you take retirement income matters

Drawdown offers real flexibility over how much you take from your pension, and when. It also gives you the opportunity to leave the pot invested for more growth throughout your retirement.

Plus, when you die, you can leave any unused pot to your family. However, as retirements get longer, it will be essential to ensure the money doesn’t run dry if you make it into your 90s or beyond.

It’s worth using an online drawdown calculator to see whether the withdrawals you want to make are likely to be sustainable. However, this can only ever be based on estimates, and you’ll face what’s known as sequencing risk.

This is where disappointing investment performance in the early years, coupled with larger withdrawals, can mean your pension doesn’t last as long as you had expected.

One way around this is a variable withdrawal strategy. The idea is to determine how much you can afford to withdraw from your pension in any given year – weighing up things like how the fund has performed, the value of the portfolio and your remaining life expectancy.

The idea is to adapt to market performance, so at times of market losses, you don’t end up eating into the capital. Then at times of better performance, you can afford to dip further into your funds.

This strategy can be complicated, so you may want to seek out some formal financial advice. Alternatively, some people will opt for a hybrid approach, with higher and lower limits over how much they take from the pension, based on performance and income needs. Others will opt to take a fixed percentage of the pot, but will revisit it regularly to make sure they’re not eroding their pot.

A variation on this theme, which can work for those with large pension pots, is to take just the natural yield from your investments. This is where you take the income from dividends produced by your investments, so you don’t eat into the capital itself.

This means the pot continues to grow and has the potential to keep up with inflation. You will need a substantial pot, with enough savings and investments elsewhere to give you flexibility over how much income you can take, but it’s a great way not only to protect an income for life, but also to give you flexibility if you need to dip into the pot for care needs.

If you opt for an annuity, you will have an income for life – regardless of how long you live. However, with a longer retirement it will be particularly important to consider inflation.

Prices in general have more than doubled in the past 30 years, so you need to understand the impact on your quality of life. You can opt for an inflation-linked annuity to overcome this, but you need to accept that the initial income will be much lower.

Taking the annuity route offers certainty, but it removes flexibility over how much income you can take, so you also need to think about how you would cover the cost of any one-offs, like adapting your home as you get older or replacing your car. It’s one reason why people often combine annuities and drawdown, either at the same time or at different stages of life.