The Association of Investment Companies (AIC) has released a list of investment company sectors yielding over three percent, following a review initiated by the organisation in May.
Its report reveals that the highest yielding sectors are Debt - Structured Finance and Leasing, offering 9.2 percent and 8.3 percent respectively. Companies in the Debt - Structured Finance sector typically invest in securitised debt, while those in the Leasing sector generate income by renting out aircraft, shipping or industrial equipment.
Sectors rounding off the top five were Property - Debt, which yielded 6.5 percent, Debt - Direct Lending at 6.2 percent and Commodities & Natural Resources at 6.1 percent.
Sectors investing in alternative assets made up 11 of the 15 entries with Asia Pacific Income the highest-yielding equity sector at 4.7 percent.
Meanwhile, at the end of May, 15 investment company sectors were offering yields of over three percent, representing a wide range of assets and investment strategies. In some sectors, yields have been enhanced by discounts, with 10 of the 15 sectors trading at an average discount to their net asset value.
Annabel Brodie-Smith, communications director of the Association of Investment Companies (AIC), said: “There is an array of choice for income-seeking investors who are considering investment companies. Clearly substantial yields are available from sectors investing in alternative assets such as specialist debt, leasing, property and infrastructure. That said, there are four equity sectors amongst the highest-yielding and several have delivered healthy levels of dividend growth over five years.
She added: “It’s important income investors realise that higher yields can come with higher risks and investors need to do their investment research thoroughly. If investors have any doubts as to whether investment companies are suitable for them, they should speak to a financial adviser.”
The AIC was founded in 1932 and seeks to represent interests of the investment trust industry. It has 360 members, while the industry has total assets of approximately £190 billion.
