Bestinvest reacts to the AIC's list of high-yielding investment trusts

The Association of Investment Companies has released a list of the 42 investment companies with a yield above 3% and a five-year track record of increasing dividends (see below).

Jason Hollands, Managing Director of investing and coaching platform Bestinvest, comments: “In recent years, dividends have been off the radar of many investors who instead have focused on low or non-yielding companies with growth potential. However, the shift into a very different environment of high inflation and rising borrowing costs, means dividend generating investments deserve greater attention again. In times of uncertainty and zig-zagging share prices, funds and trusts able to deliver regular pay-outs provide some degree of certainty over returns.

“The AIC’s list of 42 high-yielding investment companies certainly contains some trusts worth considering – particularly the five that also appear on Bestinvest’s carefully researched ‘Best Funds List’.

“But it is also worth flagging that one of the advantages investment companies have compared to open-ended funds e.g. OEICs and unit trusts, is the ability to hold some reserves back in the good times, to help fund dividends in more difficult times. This can help create a more consistent pay out profile. In contrast, open-ended funds will only distribute the natural income generated by the underlying shares or bonds which is variable depending on the earnings cycle.”

The five investment companies in the AIC’s list that are also on the Best Funds List are:

International Public Partnerships

Schroder Oriental Income

Utilico Emerging Markets

TR Property

Mercantile