by Cherry Reynard from interactive investor, 14 January 2025:
January is often the grimmest month for your personal finances..
Unlike the income desert that investors encountered in the wake of the global financial crisis, it is pretty easy to generate a decent level of income today..
However, ensuring that income beats inflation, and is sustainable, is a different challenge. At the same time, interest rates are scheduled to fall, which could dent the income from cash savings and from government bonds..
James Carthew, head of investment companies at QuotedData, says: “Janus Henderson’s stable of UK equity income trusts include Lowland, where the yield is about 5.1%, in part thanks to its -7.6% discount..”
Carthew suggests looking at some of the infrastructure investment trusts.. He likes BBGI Global Infrastructure, which trades on a -19.4% discount and has a yield of 7.2%..
Another option is GCP Infrastructure, which Carthew says is still trading “on far too wide a discount and far too high a dividend yield” – with the discount -34.8% and the yield at 10.2%. He adds: “It is making progress with its capital recycling programme, buying back shares and paying down debt, and says it has some exciting opportunities for new investments.”..
For those brave enough to explore higher-yielding options, Carthew points out that investors could pick almost any trust in the renewable energy sector and receive a very high, growing dividend..
Renewable energy infrastructure trusts remain on large discounts, which could give them an additional bounce if the share price recovers. There have also been tentative signs of a share price recovery and Calder believes this may build as interest rates fall. Carthew also highlights Greencoat UK Wind, trading on a -22.9% discount and 8.2% yield, as well as Bluefield Solar Income Fund, which is on a -32.3% discount and 10.4% yield.
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