Over the past couple of years, the cost-of-living crisis has been a painful reality for many, impacting everything from rent and mortgages to groceries. this underscores the importance of making your money work harder for you..
A more reliable approach to mitigating the impact of inflation might be to invest in dependable dividend-paying trusts. While top dividend payers might not exhibit the explosive growth of technology funds, they can provide steady cash flow. If chosen wisely, these investments can offer capital growth and dividend yields that comfortably outpace inflation.
We have employed a combination of quantitative analysis and qualitative judgment to identify four investment trusts that stand out for their attractive dividend profiles and reliability.
New City High Yield (NCYF) aims to combine high dividend yields with capital growth and preservation. Managed by Ian Francis, NCYF takes a conservative approach to capital growth. The portfolio predominantly consists of high-yielding fixed-income securities from corporate and government issuers, with a small stake in high-yielding equities..
The presence of two bond funds in this list shouldn’t be too great a surprise, given the income advantages the asset class has. TwentyFour Select Monthly Income (SMIF) also showcases the income potential of bond funds. Unlike NCYF, SMIF focuses on debt issued by financial companies and asset-backed debt, primarily in Europe..
As the name implies, NextEnergy Solar Fund (NESF) holds a portfolio of primarily UK-based solar energy infrastructure and complementary energy storage assets. Since launch nearly a decade ago, NESF has built a 1,018MW portfolio of 103 operating solar assets, powering the equivalent of over 300,000 homes and declared dividends totalling £345m..
Henderson High Income (HHI) is the most conventional of the four trusts, favouring well-known UK dividend payers. However, HHI goes beyond the standard UK equity dividend strategy. Manager David Smith has steered the portfolio toward UK mid-cap stocks, capitalising on their attractive valuations, and has a small allocation to non-UK assets. HHI can also invest in global bonds, typically when the income and capital return profile of bonds is advantageous relative to equities..
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