There are currently almost 48 investment trusts with dividend yields of 4% or above that invest mostly in equities, of which well over half are yielding over 5%.
Several of the top-paying investment companies are also 'dividend heroes', ie trusts that have an unbroken record of increasing divdiends for at least 20 years, and another handful have similar records stretching for at least a decade.
The high yielding list is topped by Henderson Far East Income (LSE:HFEL), which has a yield of 11.5% according to the Association of Investment Companies (AIC), which compiled the list, which excludes VCTs and alternatives such as infrastructure and private equity.
Managed by Janus Henderson, the trust is trading on around a 4.5% discount to the value of its net asset value, with the shares having fallen 28% over the past 12 months and almost 40% since the start of 2021.
Second in the list is Marwyn Value Investors Ltd (LSE:MVI) with a 10.8% yield, based on its 2.265p quarterly dividend paid all through 2022 year and which continued through 2023.
The investment company, which is managed by Marwyn Investment Management and has stakes in Vodafone Spain owner Zegona and posh welly boot-maker Le Chameau, is trading at a discount to NAV of almost 50%, having seen its shares sink to a three-year low late last year and mount a small rebound since.
In third is self-managed British & American Investment Trust Plc, owner of possibly the lowest-tech website on the LSE and one of the highest dividend yields of 9.2%.
Its shares having not exactly sparkled since 2018 and the share price total return over the past decade has been far from impressive.
Eight of the 48 trusts are dividend heroes, led by abrdn Equity Income Trust, which has increased its dividend for 23 years and offers a 7.7% yield, with the next being Athelney Trust and JPMorgan Claverhouse, both yielding 5.2%.
A further 13 of the trusts are not far off hero status, having increased their dividend between ten and 19 years in a row, including the high-placed Chelverton UK Dividend Trust.
Others in this category include Henderson High Income 6.6% yield), CT Global Managed Portfolio Income (6.5%), CT UK High Income (6.4%) and Lindsell Train Investment Trust (6.0%).
Fourteen of the 48 trusts are classified UK equity income sector, accounting for nearly a third of the highest yielding investment trusts.
AIC director Annabel Brodie-Smith said: “For investors seeking income, this list of high yielding equity investment trusts is a good place to start your research. These investment trusts offer access to equities in a wide range of regions and sectors from the UK and across the globe including commodities, infrastructure and biotechnology.”
As investment trusts can hold back up to 15% of the income they receive each year in a revenue reserve, this allows them to maintain steady growth in income.
However, as the AIC flagged, dividends are never guaranteed and investors need to do their own research.
Top 20 yielding investment trusts
- Henderson Far East Income (LSE:HFEL) 11.5%
- Marwyn Value Investors Ltd (LSE:MVI) 10.8%
- British & American 9.2%
- Chelverton UK Dividend Trust + 8.3%
- abrdn Equity Income Trust * 7.7%
- Blackrock World Mining Trust (LSE:BRWM) 7.3%
- European Assets Trust 7.0%
- Aberforth Split Level Income 6.9%
- Henderson High Income Trust PLC (LSE:HHI) + 6.6%
- CT Global Managed Portfolio Income + 6.5%
- JPMorgan China Growth & Income 6.5%
- CT UK High Income + 6.4%
- Shires Income plc (LSE:SHRS) 6.4%
- UIL 6.2%
- Lindsell Train Investment Trust PLC (LSE:LTI) + 6.0%
- JPMorgan Global Core Real Assets 5.8%
- Premier Miton Global Renewables Trust .8%
- abrdn Asian Income Fund + 5.3%
- Lowland Investment Trust Plc (LSE:LWI) + 5.2%
- BlackRock Latin American 5.2%
Source: theaic.co.uk / Morningstar (to 12/01/2024). Includes investment trusts in equity sectors and in the Flexible Investment sector. Excludes VCTs and alternatives. Excludes investment trusts where wind-up or restructuring plans have been proposed. Dividend Heroes indicated by * and net-generation heroes (10-19 years record) denoted by + .