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Income Investor: dividend danger and turbo yields

Dividend cover is at its lowest level since the financial crisis. Should you be worried? And we examine funds with 'turbo' yields.

 
Income Investor: dividend danger and turbo yields

Dividend cover, a measure of the sustainability of payouts, has fallen to its lowest level since the financial crisis. Should you be worried? We investigate in the latest edition of Income Investor.

Plus, we take a look at funds with 'turbocharged' yields. Typically labelled 'enhanced', or 'maximiser' income funds, these funds can offer high yields through the use of 'options'.

But this can come at a price, with a limit to the returns investors can receive from winning stocks. We've highlighted the performance of the various funds available, and spoken to experts about their suitability.

We hope you find it a useful and enjoyable read!

You can access issue 17 of Income Investor here.

If you have any problems please use this printable PDF version instead.

2 comments so far. Why not have your say?

MP

Nov 12, 2015 at 17:22

Sadly I think this article rather misses the issue about dividend cover and investment trusts. It talks about dividend cover in the underlying investments rather than the dividend cover of the traditional investment trusts. Dividend cover calculations for investment trusts seem to have become even more complicated now given that some dip into capital and others don't, and the constant issuing of new shares by some trusts has destroyed the revenue reserves per share. At the very time investors are looking for smoothed, reliable income from trusts, the trusts themselves are playing a different tune.

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Jon Snow

Nov 12, 2015 at 18:39

The yield figures in the table on page 10 need checking.

I haven't checked them all but the Schroder Asian Income Maximiser yield quoted of 4.2% looks more like the yield of the Schroder Asian Income fund to me. The Maximiser fund (class Z income) is yielding just over 7% according to Hargreaves Lansdown.

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