by Dave Baxter, Investors’ Chronicle, November 16, 2023:
The idea that investment trusts provide a reliable income through thick and thin has truly been tested in recent years, from the UK equity dividend suspensions of 2020 to the bond sell off seen over the last two years and the consequences that has had for yield-rich ‘alternative’ assets. Many trusts have indeed kept their promises on income, but not without plenty of volatility and disruption for shareholders as the sector comes under strain.
That’s evident enough from a glance at our two investment trust income portfolios. The two hypothetical £100,000 portfolios, put together by IpsoFactor Investor chief executive David Liddell and Trust Research director Simon Moore, both generated good levels of yield between the start of October 2022 and the end of September 2023…
James Carthew’s portfolio
Carthew, like Liddell, has a big position in Murray International..
Carthew also has some other equity exposure in the form of positions in Aberforth Split Level Income (ASIT) and International Biotechnology (IBT)..
The research head also picks equity and bond vehicle Henderson High Income (HHI), noting that this should be a form of “less risky exposure to the cheap UK” because of its partial use of fixed income assets…
In keeping with this, he also makes good use of other assets outside the equity universe, with 30 per cent of the portfolio in different infrastructure plays, 17.5 per cent in property and 12.5 per cent in fixed income offering Invesco Bond Income Plus (BIPS).
..Take GCP Infrastructure, which recently ceased merger talks with GCP Asset Backed Income (GABI) and traded on a discount of around 40 per cent to net asset value (NAV) and a share price dividend yield north of 10 per cent at the time of writing.
When it comes to infrastructure Carthew also likes Gore Street Energy Storage (GSF)..
The portfolio also includes property exposure via Tritax Eurobox (BOXE)..
More “conventional” real estate exposure can be pretty cyclical, and Carthew describes his position in Abrdn Property Income (API) as “the most speculative of the lot”,
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