Peel Hunt has identified the biggest investment trust winners following the Bank of England's decision to cut rates to 5% from 5.25%.
Peel Hunt sees appeal in Greencoat UK Wind due to its “explicit inflation-linked dividend policy” and “strength of cash flow”, while Octopus Renewables Infrastructure Trust is a top value play given its 29% discount.
HICL Infrastructure could also be a decent value play given its 19% discount, which is wider than its comparable core infrastructure peers.
Top picks in the real estate sector include Primary Health Properties and Shaftsbury Capital (the latter “arguably owns the most prime portfolio in the listed sector, (so) should be well positioned to benefit”).
Oakley Capital Investments (AIM:OCI) got a mention as “one of the top-performing private equity trusts in the sector, while Apax Global Alpha (LSE:APAX), with its 28% discount offers an “eye-catching” yield of 7.1%.
Sequoia Economic Infrastructure Income was highlighted as a top pick in the private debt space for its 8.4% yield.
The Bank of England's decision was influenced by the return of UK inflation to the committee's 2% target in May and June, along with easing wage growth.
However, the expectation of inflation picking up later in the year contributed to the divided vote, with four committee members preferring to maintain the base rate.
Bank of England Governor Andrew Bailey, who voted for the rate cut, emphasised the need to balance the risks of higher inflation.
"The risks of higher inflation remain. We need to make sure inflation stays low," Bailey stated.
He projected inflation to rise to around 2.75% later this year but expects this increase to be temporary, with inflation stabilising next year.