Twenty equity closed ended funds yielding 4% or over in UK

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Research from Oriel Securities suggests that there are over 20 closed ended equity funds in the UK investment trust universe, each with a market capitalisation of over £70m, that are yielding above 4%.

“For investors prepared to take equity risk, these may be attractive for income investors at a time of exceptionally low interest rates. In addition, the property, infrastructure, renewable energy and debt fund sectors also continue to offer attractive yields,” Oriel said.

The 4% figure compares favourably against the FTSE All Share yield of 3.4%. For some trusts this has occurred because of falling share prices, and in other cases they have benefitted from their ability to leverage.

A number of the funds identified have yields around 5%. Some of the funds are trading at discounts to their net asset value per share, while others are trading at a price that implies a premium against NAV.

 

Fund Market Cap (£m) Yield (%) Discount (%)
European Assets Trust 183 6.6 4 disc.
BlackRock Commodities Income 103 6.1 4 prem.
BlackRock World Mining 633 5.9 6 disc.
Henderson Far East Income 351 5.6 3 prem.
Merchants Trust 496 5.1 3 prem.
Shires Income 71 5.1 2 prem.
Henderson High Income 183 5.0 4 prem.
British Assets 373 4.9 4 disc.
Middlefield Canadian Inc 114 4.8 2 disc.
Scottish American 320 4.3 3 prem.
Dunedin Income Growth 394 4.3 2 prem.
BlackRock Latin America 169 4.2 8 disc.
Murray Income 514 4.1 2 prem.
 Murray International* 1,359 4.1 11 prem.
BlackRock Latin America 176 4.0 8 disc.
City of London IT 1,086 4.0 3 prem.
JPM Russian 200 4.0 10 disc.
JPM Global Emerging Inc 349 4.0 5 prem.
Schroder Income Growth* 176 4.0 2 disc.
F&C Capital & Income 230 4.0 3 prem.

Source: Oriel Securities

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