By ANNE ASHWORTH, Daily Mail, 18 September 2023:
National Savings & Investments (NS&I) has mostly avoided controversy during its 162-year history…
You can shield a chunk of your cash in this safety-first option which gives you scope to explore more adventurous long-term income opportunities.
Some of these lie in the investment trust sector which also has its beginnings in the Victorian era of thrift.
At present, some income trusts offer dividend yields of 4 per cent-plus.
Partly as a result of higher interest rates, their share prices are at a deep discount to the value of their net assets, making them an attractive growth prospect.
If a trust is at a 10 per cent discount, you are getting £1 worth of shares for 90p. This could turn out to be a bargain, if you are ready for a gamble.
Heading off-piste: From infrastructure to pop music
..’Alternative’ income trusts that invest in areas such as ‘big box’ logistics, infrastructure projects, pop music rights and renewable energies have been particularly hard hit by interest rate rises…
Yearsley says: ‘Take for example, Downing Renewables & Infrastructure, which yields 5.88 per cent and is on a 25 per cent discount. It invests in hydro and solar and has this year acquired a grid network in Sweden…
GCP Infrastructure has an even wider discount of 34.8 per cent – and yields 9.8 per cent. This will raise eyebrows, but Matthew Read, at the analytics group QuotedData, points to the trust’s inflation-proofed revenues from its portfolio of UK infrastructure debt.
Read says that the Abrdn European Logistics Income trust is at 30.8 per cent discount despite strong demand for its ‘big box’ logistics and ‘last mile’ urban warehouses.
This trust is my alternative income pick. I believe the market’s perception of its prospects is overly pessimistic.
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