Investment Trust Dividends
The current fcast for the Snowball is £9,120.00 with a target of 10k.
The plan is to double the 10k within ten years to an income on seed capital of 20% by re-investing at a yield of 7%, held within a tax free wrapper.
Better if you can add fuel to the plan by adding capital.
The control share VWRP is valued at £122,709.00 The current comparison using the 4% rule is income of £4,908. If we use a figure of 5k, the VWRP total would need to grow to £490,836.00. GL with that.
There are only three.
One. Buy Investment Trusts that pay a ‘secure’ dividend to buy more Investment Trusts that pay a ‘secure’ dividend.
Two. Any Investment Trust that drastically changes their dividend policy must be sold even at a loss.
Three. Remember the rules.
Very few pockets of the investment universe have escaped the tariff turmoil, but could the real estate sector prove a safe haven while volatility and uncertainty prevail?
With global markets sent into a tailspin following “Liberation Day” in early April – when the US president imposed penal, “reciprocal” tariffs on every nation in the world, before performing several U-turns – investors seeking a place to hide during the uncertainty may do well to look at listed property.
Since 2 April, the date of President Trump’s infamous unveiling of the tariffs at the White House Rose Garden, the average share price of UK listed real estate companies has risen 1.7% compared to a 2.5% drop in the MSCI UK Index, as shown in Figure 1.
Source: Morningstar, Bloomberg, Marten & Co
This is an indication that financial markets view real estate as a relative safe haven compared to most other sectors. Buy why has real estate been a bright spot during this time of market stress and can it last going forward?
We should remind ourselves that real estate has suffered a prolonged period of pain since interest rates spiked in 2022 and values plummeted. Values have already suffered a 20%-30% decline since 2022 with yields around 150-200 basis points higher. This may have helped cushion the blow in the current risk-off environment, with the sector coming from a low base and at the beginning of a period of recovery.
As central banks wrestle with their rate setting agendas in the face of inflationary pressure and heightened recession risk, markets are expecting several cuts from the Bank of England and the European Central Bank this year. Lower rates tend to be positive for the real estate sector, given the sensitivity of the sector to market rates.
Lower interest rates may not translate into lower property yields, however. Whilst companies tend to continue paying rent and lease costs during downturns, slower growth would have the effect of dampening occupier demand and put the brakes on rental income growth, which may cancel out the positive effects of lower market rates.
In terms of US tariffs, real estate has limited direct exposure. Most property companies operate domestically and have just a limited amount of rental income deriving from US companies. Although direct impacts from tariffs are limited, indirect effects such as lower exports, higher uncertainty, lower investment and weakening labour markets could slow or stall the real estate sector’s recovery.
Oxford Economics has revised down its outlook for European commercial property, trimming its all-property capital growth forecast from 2.0% to 1.5% per annum over 2025 and 2026, stating it expects slower demand to hit rental growth and persistent uncertainty to lead to a flatter yield profile.
The industrial sector is most directly impacted by tariffs, with European manufacturing and exports set to take a hit. It is anticipated that demand will slow in the near-term as businesses delay decision making.
Longer-term though, it could be the case that fragmented global trade would require more warehouse space. This was the case following Brexit, where supply chains had to be reconfigured separately for the UK and continental Europe, which led to higher inventory requirements.
Supply chain resilience was already a trend benefiting European logistics, with several shocks including Covid and the Suez-canal incidence in recent years, and this has yet to play out. The UK and EU defence spending commitments could also act as an offset to any demand-side weakness caused by tariffs. In the UK defence spending projections have been upped to £13.4bn and 2.5% of GDP by 2027.
UK commercial real estate’s defensive characteristics and income-generating traits make it an ideal safe haven for investors. Add to this that a recovery is in full swing – with MSCI data for 2024 showing that capital values rebounded to their highest levels since 2022 and income growth topping 5% since early 2023 – and now could be the real estate sector’s time to shine.
Ugly – but the current share price is even uglier. But I need some more mist to lift before attacking.
The forward looking statements were uniformly grim, but the comment on realising a “substantial” part of the current NAV (some 53p or so) in 2025 may suggest all is far from lost here.
Any of us who do OK out of this will require access to decent PTSD care. Dear oh dear.
Monevator
More significantly, Pfau found that no country – not even the US – could replicate William Bengen’s original 4% SWR finding.
Why? Because Bengen, the author of the 4% rule, relied upon a dataset containing better US historical returns than the one used by Pfau. Both archives are well credentialed. Both offer a version of the past. But the differences between the numbers reveal there’s nothing inevitable about the 4% rule – even if you invest solely in the US.
Should US assets exhibit a moderately worse sequence of returns in the years ahead than they did in the past, then future American investors may have to anchor on a 3% rule – or something nastier still.
That’s a plausible outcome. Hence retirement researchers have turned to international datasets and Monte Carlo studies to challenge the assumptions embedded in the US’s exceptional past returns. (I’ve previously used one such database to determine a World SWR of 3.5%.)
Monte Carlo methods, or Monte Carlo experiments, are a broad class of computational algorithms that rely on repeated random sampling to obtain numerical results. The underlying concept is to use randomness to solve problems that might be deterministic in principle. The name comes from the Monte Carlo Casino in Monaco, where the primary developer of the method, mathematician Stanisław Ulam, was inspired by his uncle’s gambling habits.
The first approximation for the six month figure is £4,637.00, which is on trend for the current fcast for 2025 of £9,120.00.
The target of 10k may still be possible not a certainty.
The Danger to Certain (Overvalued!) Stocks and Funds – Including GAB
The real risk here is that more short-term volatility will kick in as this “vibe-induced wall of worry” causes some investors to sell, triggering others to sell, and so on. That’s what happened in 2022, and that’s what we’ve seen in the last few months.
Of course, this is a buying opportunity for the patient, but not all assets are good buys in such an environment.
Which brings me back to 11.6%-yielding GAB. It’s a value-focused CEF that holds great stocks like American Express (AXP), Mastercard (MA) and Deere & Co. (DE). That makes it a solid buy most of the time – but not now. Here’s why:
GAB’s Big Premium Puts It at Risk
A key thing to keep in mind with CEFs is that they tend to have a fixed share count for their entire lives, and as a result can trade at different levels in relation to the value of the investments they hold.
In GAB’s we’re looking at an 8.6% premium. In other words, buying GAB now would mean buying Mastercard, American Express and the like for more than we would if we simply bought them on the open market.
Not good! And it’s why we really want to avoid GAB now, with more volatility likely.
Worse, GAB’s premium has shot up in recent weeks, not because the fund’s market price is skyrocketing (it’s flat year-to-date, including reinvested dividends), but because the selloff has caused its NAV to fall steeply, while its market price has levitated.
GAB’s Wile E. Coyote Moment
A fund that has an unusually high premium, a total price return that’s hovered near breakeven year to date and a negative total NAV return year to date is exactly the kind of fund that’s perfectly set for a sudden, steep selloff when investors notice. And if the “vibes” stay depressed, investors will notice sooner rather than later.
But there is a silver lining here: When that moment comes, the mainstream crowd will probably overreact to the downside, creating a big discount on GAB. That’ll be a great time to buy, so put GAB on your watch list while we wait for that to happen.
Forget “Vibes”: These 5 MONTHLY Dividends (Yielding 11.6%) Are Primed to Soar
While overhyped funds like GAB wobble under the weight of soft data and rising premiums, we’re zeroing in on something that is VERY rare indeed: 5 cheap dividend funds kicking out a huge 11.6% average payout.
Okay, maybe the fact that these 5 dividends are cheap now isn’t entirely surprising, given the selloff we’ve seen. But I think you’ll agree that this is: These 5 powerful funds pay dividends monthly.
And with a yield like this, you’re looking at $11,600 per year on dividends on every $100K investment. That’s $967 a month!
I think you’ll agree that it’s rare to find even one monthly payer among the popular names of the S&P 500. But CEFs give us many more to choose from, including these 5 cash-rich funds.
When today’s panicked investors discover just how solid these funds’ monthly payouts are, I expect them to flock into them, sending their prices higher (and compressing their discounts down to nothing).
Contriain Investor
Professional fund buyers reveal their most recent buys and sells, and share their outlook for the months ahead.
23rd April 2025
by Lucy Loewenberg from interactive investor
Global markets have been experiencing a notable pick-up in volatility after US President Donald Trump’s tariffs sparked a trade war. This led to a downturn in stock markets and growing concerns over economic instability. But professional fund buyers always take a long-term view on the current economic environment and find new ways of positioning their portfolios.
Every quarter, our multi-manager panel participants reveal their current bull and bear points. They also discuss the new funds and investment trusts they have bought, increased their holdings in, and trimmed or sold.
Peter Hewitt, manager of CT Global Managed Portfolio Trust
Reason to be bullish: growth in both the UK and Europe has been flatlining over recent quarters. There are, however, signs that as we move through the year some modest upward momentum will emerge. Germany announced a major boost to defence and infrastructure expenditure, while in the UK strong real wage growth should feed through to improved consumer spending. Interest rates in both areas look set to fall further.
Reason to be bearish: the uncertainty around US policy has reached heightened levels and appears to have begun to affect business confidence and investment plans. Tariffs will reduce growth and raise inflation in the US. Growth will slow in the US as a consequence. This is a concern for equity markets.
Bought: having been out of favour for a considerable period, European equity markets look better placed particularly at a time of much higher level of uncertainty, which is affecting the US. That’s why Hewitt has bought JPMorgan European Growth & Income Ord
JEGI
A trust he describes as the best performer in the European sector over most time periods, run by an experienced team. “They employ a disciplined investment approach, which tightly controls country and sector weightings but allows stock selection to generate consistent outperformance,” he says. A dividend equal to 4% of year-end net asset value is paid out in quarterly instalments over the next year.
Increased: Hewitt has increased his holding in Oakley Capital Investments Ord
OCI
A private equity investment trust.He says: “There are good indications that it looks set for a stronger next few years in terms of net asset performance.”
Hewitt notes that the underlying performance from key holdings in the portfolio continue to be strong. In addition, prospects for realisations over this year have improved, which could result in uplifts to the net asset value. The trust has cancelled its dividend to devote more resources to share buybacks, the aim being to narrow the discount, which remains wide at -33%.
Sold:Care REIT Ord
(previous name Impact Healthcare) has been sold following receipt of a bid by a US real estate investment trust called CareTrust REIT Inc
CTRE
Care REIT owned a portfolio of care homes across the UK, but did not operate them. Recent full-year results saw a small rise in the net asset value and the forecast of another increase in the dividend for the shares to yield 8.5%, before the bid.
The price tag represented a premium of 33% to Care REIT’s closing price on 10 March. Hewitt says the share price was on a discount of over -33%, which has been persistent for some time. The offer came in at a -9% discount to asset value and was recommended by the board.
“Although this represented a useful uplift, it is disappointing that a well-run company has been acquired at a discount to net asset value,” says Hewitt.
How US and global fund managers are responding to the sell-off
Vincent Ropers, co-manager of IFSL Wise Multi-Asset Growth & IFSL Wise Multi-Asset Income
Reason to be bearish: the unpredictability of Donald Trump’s policies is creating a chaotic economic environment globally with a level of uncertainty usually reserved for crises. The use of tariffs is threatening a global trade war, which is likely to dampen growth and fuel inflation.
Reason to be bullish: global economies, particularly in the US, remain on a relatively strong footing so far, however, so talks of a recession could be premature if cooler heads prevail in trade negotiations over the next few weeks leading to a reasonable, and manageable, middle ground.
Bought: Ropers added a new position in the newly launched Achilles Investment Company Ord
AIC
This small investment trust (£54million) will target other investment trusts in the alternatives space — property, infrastructure, private equity — which trade at wide discounts and where an activist strategy could help maximise value for shareholders. “The managers are well known in the industry, and to us, being part of a joint venture with Odyssean Capital that we own,” says Ropers.
He believes that Achilles’ approach to working alongside existing investors to realise value in a small number of investment trusts without a hidden agenda should benefit shareholders.
Increased: he added to his positions in listed infrastructure and renewables over the quarter, via a basket of investment trust names where he thinks the pain suffered over the past couple of years could be starting to come to an end. These include HICL Infrastructure PLC Ord
HICL International Public Partnerships Ord
INPP
Renewables Infrastructure Grp TRIG0.88%, Greencoat UK Wind UKW1.62%, Bluefield Solar Income Fund BSIF0.94% and Foresight Solar Ord FSFL1.74%.
Ropers says that many trusts in the sector over-issued shares at a time when they were seen as the only place to get a reliable income when government bond yields were low. “In a higher-rate environment, valuations had to be adjusted, and these trusts now need to prove their worth to investors faced with more income-generating choices,” he says.
Discounts of -25% to -35% and attractive dividend yields provide a margin of safety, adds Ropers.
He adds: “From a timing standpoint, the sector has attracted interest from private buyers and activists recently, and boards are under pressure to show willingness to address the wide discounts.”
This, he thinks, could provide an interesting entry point into the sector.
Sold:he also exited Care REIT following the bid by a US-based competitor. “The bid illustrates how the wide discounts in the listed property sector are now pricing in a lot of downside risk and can present opportunities,” he says.
Tihana Ibrahimpasic, portfolio manager, multi-asset team, Janus Henderson
Reason to be bearish: even if there is some roll-back for specific countries, we think that the unexpectedly high tariffs implemented by the US are going to have a meaningful drag on both the US economy and elsewhere.This will occur through a real income squeeze in the US due to higher goods prices and a demand reduction for major exporting economies elsewhere.The risk of recession has jumped meaningfully higher since the implementation of reciprocal tariffs.
Reason to bebullish: we don’t see large imbalances in the economy and so believe that any recession could be relatively mild by historical standards, with it being mostly a policy choice.
Bought:Ibrahimpasic opened a position in the Janus Henderson Tabula Euro AAA CLO ETF. This is a recently launched strategy, based off a long-standing track record of the European Securitised Debt team at the firm. “This strategy offers exposure to an appealing asset class from a yield and diversification perspective, with minimal interest rate duration,” says Ibrahimpasic.
Increased: she has added to her position in the Muzinich Global Short Duration Investment Grade fund, which is run by an experienced team. “It seeks to invest in high-quality paper with an average duration of around 1.5 years,” says Ibrahimpasic. Most of its assets are invested across Western Europe, while banking and diversified financials are leading industry exposures.
Sold: she closed a small position in the Janus Henderson Global Sustainable Equity fund, which invests in growing companies with durable, competitively advantaged business models, and high sustainability credentials. “The decision was primarily based on seeking more regional equity exposure as opposed to investing in a global strategy,” says Ibrahimpasic.
Simon Evan-Cook, manager of the Downing Fox Funds
Reason to be bullish: real wages are still growing faster than the cost of things that people want to buy with those wages, which means they can buy more of those things. This is good news, albeit most economists see it as bad news. But that’s economists for you.
Reason to be bearish: tariffs are clearly the talk of the town at the moment. Even if the tariffs themselves don’t cause an economic slowdown, the fear and uncertainty caused by them could still do the trick.
Bought: global equity fund Nutshell Growth was recently added. It is managed by Mark Ellis, who founded Nutshell Asset Management in 2019. Evan-Cook appreciates the fact that it’s underpinned by a focus on high-quality companies.“But we are also impressed by the manager’s potential to add to returns by more actively trading between his holdings,” he says.
Increased: there have been no major changes for Evan-Cook this quarter, but one holding he did top up was the WS Havelock Global Selectfund. It is a global equity fund managed in a value style that, hesays,“has been doing a good job, and is well positioned to continue doing so”.
Trimmed:Evan-Cook reduced his exposure to the US dollar slightly in mid-March. “The dollar has some wonderful properties as a haven asset, but the recent noises coming out of the US government are threatening that, so we felt it prudent to reflect that in our portfolios,” he says.
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