High Yield Investment Trusts - AIC Sector and Yield table (October 2022)

[Itsallaguess]

Below is a table of AIC-listed Investment Trusts which yield 3.5% or higher as at October 1st 2022.

The table is shown grouped by AIC sector, and then ranked in descending order of yield for each sector, and also shows relevant Discount or Premium information, along with the 5-year dividend growth-rate for each Investment Trust, and with an additional column showing the relevant OCF charges including performance fees.

Please note - the company names in the table below are URL links to the respective AIC 'Portfolio' page for each investment, which will then show the underlying holdings, geographic breakdown, and other useful company-specific information. From there, other tabs on each AIC page can then lead to areas such as Overview, Performance, Dividends, Charges, and others...

If anyone wishes to replicate this type of data-set themselves at any time, there are some simple instructions at the bottom of this post on how to do that...




I've dip-checked the above data, but please do note that it should be used only as a starting-point for further investigation, and it should certainly be the case that you should carry out your own due-diligence on any data that you may use for any subsequent investment decisions that you might wish to make...

A good source to cross-check some of the above data, if anything does look interesting or even suspicious, is the TrustNet website, which also gives yield and discount information for these types of investments - https://www.trustnet.com/

Here are some instructions to be able to generate up-to-date yield-data in the future, using the above excellent AIC website -

1. Open the AIC website (https://tinyurl.com/yawfc9zy)

2. Select the 'Choose your AIC Sectors' button, and then click 'Deselect all sectors' and then 'Reselect all sectors, followed by a manual un-selection of all the lower 'VCT' sectors group.

3. From within the 'Sectors' window, select the link on the bottom right labelled 'Select your data points', which will then open the data-points selection window.

4. In the 'Data points' window, click 'Deselect all', and then manually select TIDM, Management Group, AIC Sector, Traded Currency, Total Assets, Discount/Premium, 5yr Div Growth Rate (% pa), Ongoing charge including performance fee, Dividend Cover (yrs), and Dividend Yield (%)

5. Close the 'Data points' window

6. Select the 'Finish and Save / Print' button, and in the window that appears, make sure to un-select the 'Include AIC sector weighted averages' box, and then select the box marked 'Enable Print Mode', before closing that window

7. The presented AIC data can now be copied and pasted into a spreadsheet, and then filtered by sector or yield as required.

• Please also note that if you don't select the 'Enable Print Mode' option during the above process, and you then try to copy the data into a spreadsheet, then it's likely to only copy some of the data...

Cheers,

Itsallaguess

[Itsallaguess]

I got some flak on my last post saying that DIY investors might spend 40 hours a week managing their wealth.

Flak is fair, you want to know the source.

That's the average amount of hours that our DIY clients report they used to spend, to the nearest 5.

I don't wish to detract from the rest of your interesting post, but just in relation to the above points, I hope that we're able to accept that investors who might head towards a 'wealth manager' might in many ways be classed as a self-selecting cohort, and to find that time-saving might be high on their agenda should come as no surprise.

That's not to say, of course, that those investors that don't make their way to your door also feel the need to spend such huge numbers of hours managing their investments as well though...

Cheers,

Itsallaguess

[simoan]

I am an asset manager.
I thought I could add a little to this very useful post by listing the research we do after one creates the shortlist.
We don't use investment trusts greatly. But we prefer them to unit trusts and many 'smart' ETFs if the portfolio size means we're forced to buy funds. We do use them where the broker can't deal there direct (e.g. India, Vietnam)
Permit me to assume you've already worked out your optimal risk and therefore your asset allocation.
a) exclude the trusts that have majority holdings in the markets you don't want to invest in anyway, because of your asset allocation (see above). You can't tell what they invest in just from the name.
b) remove those that do not produce performance (gains plus dividend) which is at least equal to the average of the market you are considering over the last 10 years (if that was not part of your initial screening)
c) take the top 10 holdings and read for each their last quarterly earnings reports. Look for those who are still reporting increased turnover, and reasonable margins albeit reduced [Oct 2022] which I think we're going to have expect for the next year
d) if more than half (by % held) of the top 10 are analysed by you as likely to drop their earnings for two years or more then you would probably assume that the investment trust yield would drop as well - so exclude from your shortlist
e) remove those that have NAVs wildly outside the value indicated by current price, and which you can't explain or understand
f) those that remain, place on a 'big list' waiting for the right time to buy. We get an initial sense of the 'right' time by applying what we call the 'when to buy' guidelines
1. the 26 week moving average is trending up
2. the current price is within 15% of the moving average
3. the bid offer spread has not gone wild
4. the security is liquid enough to deal at a limit price through your XO broker
I got some flak on my last post saying that DIY investors might spend 40 hours a week managing their wealth. Flak is fair, you want to know the source. That's the average amount of hours that our DIY clients report they used to spend, to the nearest 5. I can always expand on the content of the 40 - about 5 to 10 hours of that is spent sifting through securities with a routine like the above. We've been doing triple time since the pandemic and Ukraine. It's tougher than it used to be.

Interesting that you don't take the gearing of the Trust into consideration. I notice a "gearing" column is also absent in iag's very useful table. Given what is happening with interest rates currently, and the declines we are seeing in the markets, I would've thought the debt structure of the company was at least of passing interest. I would always start with reading the latest Annual & Interim Report myself. A lot of the rest of your process just sounds like overkill to me - paralysis by analysis. I certainly don't understand why anyone would go as far as using Technical Analysis for an IT.

All the best, Si

[Itsallaguess]

I notice a "gearing" column is also absent in iag's very useful table.

Given what is happening with interest rates currently, and the declines we are seeing in the markets, I would've thought the debt structure of the company was at least of passing interest.

That's a good point, and especially with regards to future interest rates.

I'm always happy to improve the data-sets that I post up if I can, so I'll make sure to include Gearing in next month's High Yield Investment Trust thread.

Cheers,

Itsallaguess

[simoan]

I notice a "gearing" column is also absent in iag's very useful table.

Given what is happening with interest rates currently, and the declines we are seeing in the markets, I would've thought the debt structure of the company was at least of passing interest.

That's a good point, and especially with regards to future interest rates.

I'm always happy to improve the data-sets that I post up if I can, so I'll make sure to include Gearing in next month's High Yield Investment Trust thread.

Cheers,

Itsallaguess

Sorry, it was just an observation, not a criticism. Mostly IT’s have long duration debt, but they also use short-term bank debt, RCF’s etc. Gearing is great when the market is going up but not good when it goes into reverse.

Personally, when I look at some trusts, I can’t believe they’re on premiums or only slight discounts given their level of gearing. Merchants is one such example with 12% gearing and it’s dividend is barely covered. By contrast Edinburgh IT rolled over its debt last week replacing 7.75% debentures with new 2.42% debt of the same amount. That’s pretty lucky timing and immediately enhanced the NAV. They’ve also reduced gearing to around 4% (the 7% figure on AIC website is incorrect).

[Itsallaguess]

Sorry, it was just an observation, not a criticism.

No problem - that's exactly as I saw it.

The gearing data is there, so it's not a problem to incorporate it next time round.

We did a similar thing a while back with the addition of the useful 'ongoing-charges' column, so anything beneficial that can help without overloading things is a positive step.

Cheers,

Itsallaguess

[taken2often]

Thanks again for this Post. Due to the recent correction I have started to top up on high yield ITs. I am buying smaller amounts as I intend to follow the market down. Years ago I used to say to my self the market cannot go down any further and sure as hell it did, and it was a long slow haul back up. Worse is still to come, due to Covid, Energy, wages and general inflation. The paper loss to date is massive but I invest for income so this is a buying opportunit and a massive IHT saving if I pop my cloggs during this period.

[kempiejon]

Thanks again for this Post. Due to the recent correction I have started to top up on high yield ITs. I am buying smaller amounts as I intend to follow the market down. Years ago I used to say to my self the market cannot go down any further and sure as hell it did, and it was a long slow haul back up. Worse is still to come, due to Covid, Energy, wages and general inflation. The paper loss to date is massive but I invest for income so this is a buying opportunit and a massive IHT saving if I pop my cloggs during this period.

I just keep plodding, adding month after month to a varety of lines. Of course if you buy smaller amounts you'll push your costs as a percentage up slightly but if helps you sleep at night why not, thyough if you're sure you'll follow the market down, wait and ride it up instead. I know I can't judge direction of travel or rate of change so I don't bother, I add surplus cash when I have it. If you're worried about falling prices accumulate a bit more cash.

[taken2often]

I agree I will buy down and up as I do not keep any cash in the SIPP and ISA, always reinvest. Tending to avoid individual shares so is Preference and ITs
Bob

[88V8]

Below is a table of AIC-listed Investment Trusts which yield 3.5% or higher as at October 1st 2022.

Resurrecting this post because Triple Point are in danger of becoming yet another casualty of the short-termist attitude amongst some institutional investors who look to liquidate trusts trading at a significant discount to NAV. In this case, 33%.

In his substack - to which I recommend you subscribe - the Oak Bloke delves into this trend, and suggests that in this instance holders can and should vote down the proposal.
Does that include you?

V8 (apologies that the data has vanished from my table extract...)

[yieldhog]

In his substack - to which I recommend you subscribe - the Oak Bloke delves into this trend, and suggests that in this instance holders can and should vote down the proposal.

I don't have any of this particular Trust but do have two other trusts that are liquidating supposedly because of their large discounts. It's an annoying trend especially for fixed income trusts that were bought before interest rates began to clinb a few years ago. The two funds I have are NBMI and VSL. I voted against both proposals but they both got approved.

In the case of VSL, I doubled down to reduce my average cost and, other things being equal, I hope to make a profit by the end of the liquidation process. On NBMI I will probably break even if I include interest payments.

One of the main attractions of closed end trusts is the ability to buy when they are at a discount. Closing them down when the discount gets too big seems to go against the purpose and spirit of them.

Y

[yieldhog]

Just a heads up for anyone holding VSL, especially if it's held in ii

I got an unexpected VSL dividend payment this week and thought it might be something connected with the liquidation of the fund but on further investigation found it was a dividend that should have been credited to my SIPP in July. I called ii and got a somewhat muddled answer as to why it got missed. The December dividend was credited on the correct date.

I usually check off all expected dividend payments every month but on checking my records I see that I was expecting a dividend in June but have a question mark next to it but must have forgotten to follow up.

Happy Christmas all,

Y