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View the article online at http://citywire.co.uk/wealth-manager/article/a740037

Nick Sketch: investment trusts with an edge in income

by Nick Sketch on Mar 12, 2014 at 00:01

It is also easier to back narrower sectors that look particularly attractive – there are no UT equivalents for Medicx or Target Healthcare , or for Reits such as Shaftesbury, Segro and Derwent.

Infrastructure investments are also hard to reach via UTs. The reality is that our taxes are paying a return to investors and the sector offers predictable revenues, high yields and some protection from inflation.

With the supply of new assets apparently continuous, care needs to be taken over timing purchases to avoid an unsustainable premium in the price paid, and this sector is not risk-free, but income yields of 5-6% (and long-term total returns probably 1% or 2% higher) can justify their place in many portfolios, particularly if income-biased or tax-sheltered.

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Look up the funds

  • Findlay Park American GBP
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Look up the shares

  • Shaftesbury PLC
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  • SEGRO PLC
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  • Derwent London PLC
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Look up the investment trusts

  • TwentyFour Income (Ordinary Share)
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  • Target Healthcare REIT (Ordinary Share)
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