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It is attractive for income investors, with a current yield of 5.1% and a steady monthly dividend payment. It converted to a UK real estate investment trust in June 2019, which means it must pay out at least 90% of its tax-exempt income. The trust’s performance has struggled amid a 32% allocation to retail and retail warehouses, which have been hit by company administrations and store rationalisation programmes. Its shares have gone from a 5% premium in March 2017 to a 13% discount at the end of 2019. But that masks a decent longer-term rise in net asset value, up 15% and 40% over three and five years respectively.
The quality and diversity of the portfolio are plus points, as are various limits that help to maintain diversification and reduce risk. For example, no single property can account for more than 15% of gross assets at the time of acquisition, and the largest five properties must be no more than 40% of gross assets. There are also limits on the proportion of short-leasehold properties (with less than 60 years remaining) and the proportion of the portfolio in different sectors. The trust owns properties located throughout the country but had 58% of its assets in London and the South East at the end of 2019.
Shares in the trust have consistently traded at a small premium, such is the demand for the steady and reliable stream of income it generates but dipped closer to net asset value in 2019.
Past performance of the underlying constituents is not a guarantee of future performance. The value of investments, and any income from them, can fall as well as rise so you could get back less than you invest.
Annual performance can be found on the factsheet of each fund, trust or ETF. Simply click on the asset’s name and then the performance tab.
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