High yielding IT suggestions?

[fullbreakfast]

I'm in the process of allocating a portion of my SIPP to a sub-portfolio of investment trusts offering good yield - in this context I'm thinking 4.5% plus, though higher is better if there is a reasonable prospect of the yield being sustainable. Each holding will make up no more than 4% of my SIPP, which itself is not my entire retirement pot, so I can look at the riskier end of the IT spectrum.

So far I have bought:
Black Rock Commodities Income (BRCI)
Ecofin Global Utilities and Infrastructure (EGL)
Palace Capital plc (PCA) (OK - not an investment trust, but similar - invests in UK ex-London commercial property)

Does anyone have further suggestions? Of course I'd like to avoid duplicating the sectors I've already covered, though generalists with some overlap would be fine. Outside my SIPP I also hold some VCTs (Baronsmead and Northern) so probably also better for me to avoid anything specialising in UK micro-cap.

Thanks for any thoughts.

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[SalvorHardin]

One that immediately springs to mind is Henderson Far East Income, which currently yields 5.8%. Around half the portfolio is invested in China, Taiwan and Australia, with the rest spread around most other South-East Asian markets. Typically 40% to 50% is invested in financials and telecoms.

Another is European Assets Trust, which currently yields 5.5%. A bit of an oddity in that its dividend is reset at the start of every calendar year to be 6% of the previous year-end’s NAV.

Since you’re already in Palace Capital, you might wish to look at a few UK REITs. There are quite a few which meet, or come close to, your criteria. For example, British Land yields almost 4.3% whilst Regional REIT (student accommodation) yields 7.5%

If you’re prepared to be a bit more adventurous, there are a lot of REITs in North America with 5%+ yields. I hold Lexington Realty Trust, which currently yields 5.7% net of US withholding tax. It owns 193 properties in 40 states. Offices and industrial properties make up just over 80% of its properties.

A word of caution to investors who aren’t familiar with REITs (Real Estate Investment Trusts). REITs are not investment trusts. Rather they are property companies who must pay out the vast majority of their rental income but in return pay these dividends without tax deductions. Investors who want a Property Investment Trust should start by looking at TR Property.

[Dod1010]

I have the same quest, to replace my holding in London & St Lawrence which currently yields/was yielding around 3.8/4%. I am less ambitious than you and am struggling to find ITs yielding over 4.0% never mind over 4.5% which I would be willing to buy. I am not interested in buying at a premium and that rules out most infrastructure trusts. I am thinking of buying Murray Income but even that is struggling to get much growth in its dividend; current yield 4.1%.

I suspect that you may have to pare your expectations.

Dod

[fullbreakfast]

One that immediately springs to mind is Henderson Far East Income, which currently yields 5.8%. Around half the portfolio is invested in China, Taiwan and Australia, with the rest spread around most other South-East Asian markets. Typically 40% to 50% is invested in financials and telecoms.

Another is European Assets Trust, which currently yields 5.5%. A bit of an oddity in that its dividend is reset at the start of every calendar year to be 6% of the previous year-end’s NAV.

Since you’re already in Palace Capital, you might wish to look at a few UK REITs. There are quite a few which meet, or come close to, your criteria. For example, British Land yields almost 4.3% whilst Regional REIT (student accommodation) yields 7.5%

If you’re prepared to be a bit more adventurous, there are a lot of REITs in North America with 5%+ yields. I hold Lexington Realty Trust, which currently yields 5.7% net of US withholding tax. It owns 193 properties in 40 states. Offices and industrial properties make up just over 80% of its properties.

A word of caution to investors who aren’t familiar with REITs (Real Estate Investment Trusts). REITs are not investment trusts. Rather they are property companies who must pay out the vast majority of their rental income but in return pay these dividends without tax deductions. Investors who want a Property Investment Trust should start by looking at TR Property.

Thanks SalvorHardin for the the very detailed reply. All of your suggestions merit further investigation, so I shall be busy!

I have looked briefly at the Regional REIT web site and according to that they mainly invest in "quality offices and industrial units located in the regional centres of the UK outside of the M25 motorway" rather than student accommodation - which would actually make it more attractive to me. I only put a "half stake" into PCA (bit less than 2% of SIPP) so might bring my overall exposure to UK real estate up to a full stake by putting the same amount into Regional.

Not having previously looked at REITS I see the tax treatment of the dividends is a little fussy, however not an issue in a SIPP so I've no worries on that score.

[fullbreakfast]

I have the same quest, to replace my holding in London & St Lawrence which currently yields/was yielding around 3.8/4%. I am less ambitious than you and am struggling to find ITs yielding over 4.0% never mind over 4.5% which I would be willing to buy. I am not interested in buying at a premium and that rules out most infrastructure trusts. I am thinking of buying Murray Income but even that is struggling to get much growth in its dividend; current yield 4.1%.

I suspect that you may have to pare your expectations.

Dod

Well, some higher yielders are definitely out there - so I suspect the key is your approach to risk, which I'm assuming would rule out a lot them?

For an infrastructure trust you might want to look at EGL, mentioned in my first post, which sits at a modest discount to NAV (trading around 122p, NAV around 139p) and has a very healthy yield.

[genou]

I'm in the process of allocating a portion of my SIPP to a sub-portfolio of investment trusts offering good yield -

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If your SIPP is US registered, you can get gross returns from US REITs -

have a look at such things as

MPW ( Medical Properties Trust Inc ) 6.5%
OHI ( Omega Healthcare Investors Inc ) 7.2%
TWO ( Two Harbors Investment Corp ) 9.5%

These are definitely DYOR holdings, as you have to be happy you understand what you are buying.

[baldchap]

Strangely enough I have also been looking at BRCI & EGL, and also HFEL which was mentioned.

I recently invested in UEM, which is like EGL but for emerging markets if you like utility/infrastructure type investments.

[77ss]

I have the same quest, to replace my holding in London & St Lawrence which currently yields/was yielding around 3.8/4%. I am less ambitious than you and am struggling to find ITs yielding over 4.0% never mind over 4.5% which I would be willing to buy.

One needs to decide exactly how much importance one places on a high dividend, vis-a-vis other factors. I am currently looking at a couple of private equity ITs, which give a bit of diversification, as well as a reasonable yield.

F&C Private Equity - running yield 3.81%.
Standard Life Private Equity - running yield 1.66% - low, but with a commitment to increase it to 3.69% next year.

[SalvorHardin]

Sorry about labelling Regional REIT as student accomodation.

That will teach my to be a bit more sober when I post (cut and paste went a bit wrong). And not to post whilst watching last evening's IPL match.

[tramrider]

You might find RECI Real Estate Credit Investments of interest, with a 6.6% yield. It is different from a normal REIT as it invests in short-term bond-like loans on property. It seems to have a good 5 year record, but not so good 10 year record:

http://www.theaic.co.uk/companydata/BZGFP/performance

Tramrider

[midgesgalore]

IC article:
http://www.investorschronicle.co.uk/2017/04/12/funds-and-etfs/investment-trusts/equity-trusts-still-yield-over-despite-market-rises-wcP1LdgEsLsDme1ogLh5EM/article.html
All these trusts are yielding > 4% at, 7/April/2017
European Assets, Henderson Far East Income, BlackRock Commodities, Merchants, Henderson High Income, Dunedin Income Growth, F&C UK High Income, Value and Income, Murray Income, Aberdeen Asian Income, Murray International 

midgesgalore

[Dod1010]

None of the high yielders mentioned appeal to me for a variety of reasons, Ecofin (EGL) seems to be one of these reconstructions which may or not work out fine but I do not really like the sound of it. Pure private equity funds are usually boom or bust in my experience, and geographical specialisation?

I suspect I will go with Murray Income although a lot of its holdings are the usual suspects. Or, I may buy back into British Empire again and take a chunk of money out of ITs and buy Admiral, the latter hopefully protecting my income.

Dod

[OhNoNotimAgain]

IC article:
http://www.investorschronicle.co.uk/2017/04/12/funds-and-etfs/investment-trusts/equity-trusts-still-yield-over-despite-market-rises-wcP1LdgEsLsDme1ogLh5EM/article.html
All these trusts are yielding > 4% at, 7/April/2017
European Assets, Henderson Far East Income, BlackRock Commodities, Merchants, Henderson High Income, Dunedin Income Growth, F&C UK High Income, Value and Income, Murray Income, Aberdeen Asian Income, Murray International 

midgesgalore

Why does anyone give this mishmash of lazy journalism any time of day at all?

Those collectives are invested in such a disparate collection of assets and geographies that any semblance of comparison is nonsensical. Then add in the complications of gearing and discounts and to make an investment decision is farcical. To add insult to injury it then lists one year returns as if that is any measure of anything.

How are these data supposed to help investors in any way to select an investment manager, an asset class, a sector or a region to invest in?

Rob

[mc2fool]

How are these data supposed to help investors in any way to select an investment manager, an asset class, a sector or a region to invest in?

Ah well, you see Rob, every journey starts with a first step, and for those whose destination includes a high yield it makes sense to start with a list of high yielders, which one can then look into in more detail to see if individual entries fit one's other criteria.

Of course, nobody should consider only yield, don't you agree

[richfool]

FB, I would be inclined to look at MYI (already mentioned) and JPGI (the latter announced a 4% yield which maybe part funded from capital), both from the Global G&I sector.

Additionally AAIF (Aberdeen Asian Income), (also previously mentioned), which is a steady Asia Pacific trust with a good yield 4.18%. Plus perhaps MUT from UK G&I which has a good yield around 4.1%

[Wasron]

I've been adding ITs to my SIPP recently and have bought most of those mentioned. I also added Funding Circle (FCIF) and Bluefield Solar Income (BSIF) as I was looking for high yielding trusts with a weak correlation to the FTSE 100.

JLEN was considered as a substitute for BSIF, but I preferred solar to a mix of solar and wind in the end.

[Longtermyieldman]

If aiming for an overall yield of 4.5 percent I'd buy a mix of ITs paying distributions paying a little more and less than that figure, rather than regarding it as a threshold and rejecting those below it.

That being so, ITs I've been in for some time and rate, which would give an overall yield in the vicinity you seek if bought in roughly equal quantities, would include:

Princess Private Equity
F&C Private Equity
City of London
Diverse Income
Finsbury Income and Growth
Murray Interational
Henderson Far East Income
European Assets
Perpetual Income and Growth
BlackRock World Mining

This portfolio is nicely diversified by manager, geography, sector/type and style and most hold useful revenue reserves so should be able to weather the occasional storm without big cuts to distributions.

[OhNoNotimAgain]

How are these data supposed to help investors in any way to select an investment manager, an asset class, a sector or a region to invest in?

Ah well, you see Rob, every journey starts with a first step, and for those whose destination includes a high yield it makes sense to start with a list of high yielders, which one can then look into in more detail to see if individual entries fit one's other criteria.

Of course, nobody should consider only yield, don't you agree

You cannot control returns. All you can do is select the level of the risk you desire.

Rob

[mc2fool]

You cannot control returns.

Nobody has said you could. The discussion is about yield, not returns.

[midgesgalore]

IC article:
http://www.investorschronicle.co.uk/2017/04/12/funds-and-etfs/investment-trusts/equity-trusts-still-yield-over-despite-market-rises-wcP1LdgEsLsDme1ogLh5EM/article.html
All these trusts are yielding > 4% at, 7/April/2017
European Assets, Henderson Far East Income, BlackRock Commodities, Merchants, Henderson High Income, Dunedin Income Growth, F&C UK High Income, Value and Income, Murray Income, Aberdeen Asian Income, Murray International 

midgesgalore

Why does anyone give this mishmash of lazy journalism any time of day at all?

Those collectives are invested in such a disparate collection of assets and geographies that any semblance of comparison is nonsensical. Then add in the complications of gearing and discounts and to make an investment decision is farcical. To add insult to injury it then lists one year returns as if that is any measure of anything.

How are these data supposed to help investors in any way to select an investment manager, an asset class, a sector or a region to invest in?

Rob

Hi Rob
It is difficult making any investment purchase - all the things you say. If making an investment choice was easy we would all be gazillionaires.

I just take these articles for what they are and they are factual as stated; we need to do our own research and not leave it to others but meanwhile the article presents > 4% yielding trusts so now they are on the radar if the paying reader previously didn't know.

midgesgalore