Investment Trusts - Southbank Investment Research

Participant

Hello David
Just wanted to ask your view on Investment Trusts. There are several that fit the profile of paying consistently high dividends of 5% or more over several years. Of course they have the added benefit of providing diversification which I know is rightly important in your investment considerations. Merchants Trust for example pays over 5% and holds many of the high yielding shares in your portfolio. Any thoughts on including or excluding investment trusts in your portfolio? I know British Land is now set up as a REIT but it doesn’t really offer the same level of diversification as other investment trusts. Many thanks

Stephen Bland

Moderator

TDL is about individual HY share portfolios so no plans to include ITs though I have nothing against them. Readers can add them or any indeed any share to their HYP but that is entirely their own decision in which I can play no part. As you may know I am prohibited from giving personal financial advice so will not say much more on this.

What I can say in general is that I see little point in adding an IT which duplicates a lot of the shares held individually in an HYP because this would not improve diversification much. As a generality readers wishing to add an income IT to their HYPs should consider those based on different shares entirely, which would then satisfy one of the crucial requirements of HYP construction – diversification.