Interactive Investor

23 investment trusts with 4% plus dividend yields

15th November 2021 11:36

Tom Bailey from interactive investor

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Included in the list are a relatively diverse range of trusts, spanning UK, global and Asian sectors.

Twenty-three investment trusts that invest primarily in equities have a dividend yield of 4% or higher, according to the latest data from investment trust analyst Stifel.

Included in the list are a relatively diverse range of trusts, spanning UK, global and Asian sectors.

The highest yielding is Henderson Far East Income (LSE:HFEL), with a yield of 7.9%. There were also several other Asian-focused trusts on the list, including Invesco Asia (LSE:IAT), with a 4.5% yield; JPMorgan Asia Growth & Income (LSE:JAGI) yielding 4.3%, and Aberdeen Asian Income (LSE:AAIF) with a yield of 4.1%.

The second-highest yielding trust was BlackRock Latin American (LSE:BRLA), at 6.3%.

UK equity favourites were also on the list, including JPMorgan Claverhouse (LSE:JCH), Merchants Trust (LSE:MRCH) and City of London (LSE:CTY). The latter, a member of interactive investor’s Super 60 rated list, has a yield of 4.9%.

Several global equity trusts are also included on the list. Notably, this includes Murray International (LSE:MYI), another member of the Super 60 list, with a 4.8% yield.

Most trusts on the list are trading on a discount, meaning the share price is lower than the underlying value of the assets held by the trust.

However, some trusts are trading on a small premium. Schroder Income Growth (LSE:SCF) has the largest premium at 1%. The largest discount is Majedie Investments (LSE:MAJE) at 15%, followed by Value and Indexed Property Income (LSE:VIP) at 14% ,and Aberdeen Asian Income (LSE:AAIF) at 13%.

Stifel says that many of the trusts on the list are established go-tos for income investors. As a result, many drew on their revenue reserves to increase or maintain dividend payments during the dividend drought following the Covid-19 pandemic.

While the list includes plenty of investment trusts with yields of more than 4%, the universe of 23 is smaller compared with the previous data six months ago, when 25 trusts were included.

However, three years ago, only 13 trusts had a dividend yield of 4% or higher. At the time, share prices were riding high, pushing down yields. 

Commenting on the data, Stifel notes: “For those investors prepared to take equity risk, the yields on these trusts may be attractive in the current low interest rate environment. Most of these trusts offer exposure to overseas markets, as an alternative to the UK. Many of them also have substantial dividend reserves, and have a good record of delivering annual dividend growth.”

Investment trust Yield (%)
Henderson Far East Income (LSE:HFEL) 7.9
BlackRock Latin American (LSE:BRLA) 6.3
Aberdeen Standard Equity Income (LSE:ASEI) 6
Henderson High Income (LSE:HHI) 5.9
BMO UK High Income (LSE:BHI) 5.6
European Assets (LSE:EAT) 5.4
Value and Indexed Property Income (LSE:VIP) 5.3
Shires Income (LSE:SHRS) 5.1
Merchants Trust (LSE:MRCH 5
City of London (LSE:CTY) 4.9
Murray International (LSE:MYI) 4.8
Majedie Investments (LSE:MAJE) 4.7
Lowland (LSE:LWI) 4.6
Invesco Asia (LSE:IAT) 4.5
JPMorgan Japan Small Cap G&I (LSE:JSGI) 4.4
JPMorgan Asia Growth & Income (LSE:JAGI) 4.3
Schroder Income Growth (LSE:SCF) 4.2
JPMorgan China Growth & Income (LSE:JCGI) 4.2
Aberdeen Asian Income (LSE:AAIF) 4.1
JPMorgan Claverhouse (LSE:JCH), 4.1
BlackRock Energy and Resources (LSE:BERI) 4.1
JPMorgan Russian (LSE:JRS) 4.1
BlackRock World Mining (LSE:BRWM) 4.1
Source: Datastream. Excludes trusts with market caps below £80 million

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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