View more on these topics

Investment trusts hike income payments

Income payments are increasing in frequency and size from investment trusts, new data suggests.

Data from broker Winterflood Securities cited by the Financial Times shows that between 2013 and 2017, the proportion of trusts that paid some form of dividend for the year rose from 69 per cent to 82.

The proportion of the 321 surveyed that paid a yield above 5 per cent also doubled from 10 per cent to 20 per cent

Commentators have put the uptick in investment trust sales down to an increase in demand for income in a low rate environment.

The Association of Investment Companies tells the FT that increasing yields are also down to a shift in the buying strategies of trusts, which are starting to favour higher-income investments like debt and infrastructure over equities.

Investment trusts get a bad press – but are they worth a look?

The AIC says: “We are seeing such a strong demand for income among investors that many trusts are now paying a dividend and perhaps paying at least some of it from capital to meet the demand.”

Investment trusts have been allowed to pay investors dividends out of their capital reforms since new flexibilities were introduced in 2012.

Recommended

FCA logo glass 2 620x430

FCA looks to soften Mifid II fallout

The FCA is reviewing Mifid II following criticisms that millions of savers are being provided with misleading or false information, The Financial Times reports. Speaking at the FCA’s asset management conference in London on Tuesday, chief executive Andrew Bailey said introducing some aspects of Mifid II had “not gone as we hoped it would and […]

Jason Butler: The real reasons people take professional advice

Since I ceased operation as a practising financial planner almost three years ago, I have spent a lot of time researching the type of help and advice people need with their finances. While online tools can help, there are many situations when a person needs an individual and tailored approach from a human adviser. But […]

Ros Altmann
15

Ros Altmann: My solution to the DB transfer advice debacle

The six million people in defined benefit pension schemes who could be enticed by the high transfer values on offer are causing much consternation among parliamentarians, the regulator and financial advisers. The FCA has found a significant proportion of transfer advice to be unsuitable or questionable. Its latest consultation suggests big changes to the way […]

3

SJP fund changes put segregated mandates under the spotlight

Experts are debating whether the segregated mandate model is coming under pressure as one its most prominent users, St James’s Place, makes a raft of fund manager changes. In January, SJP replaced Axa Investment Management as the manager of its £3bn Balanced Managed Unit Trust after 11 years running the mandate, replacing it with US-based […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com