High Yield Investment Trusts - AIC Sector and Yield table (September 2023)

[Dod101]

I've held HFEL for a while now as an alternative to IAPD (a high yield Asia Pacific ETF) the ETF has performed better TR but yield has been lower. I bought into NCYF more recently as I think bonds will do well both income and capital terms in the years ahead. I will admit I probably bought too early, but it's difficult to pick the bottom. I think they will do well as we are close to the bottom for fixed interest, but could well be wrong. I may buy more soon.

It is an interesting question. Bonds may well recover capital wise if you believe that interest rates will drop significantly. I am not sure they will but who knows? Until their maturity of course they will give a decent income. I have a few bond funds which are bombed out capitalwise but obviously the income keeps rolling in. A modest part of my portfolio though.

Dod

[daveh]

I decided that with interest rates rising and bond and gilt prices falling now was the time to buy bond funds and gilts to lock in good yields ( I'll admit my gilt purchases have been more about ytm and avoiding tax on cash interest) but with the bond fund I was thinking now was a good time ( a few months ago) to lock in good yields. I'll admit I was probably a bit premature, but waiting until interest rates had definitely peaked would be too late.

[Charlottesquare]

In their recent Annual Report HFEL shows a capital return which has been negative for each of the last five years whilst managing a steady increase in the dividend.

Furthermore recent figures show a discount to NAV of only 2.06% and a yield of 11.01%.

Something does not feel right. I think that is the dilemma. Part of the answer is that they seem fairly successful at writing share options to boost the dividend income. If there is not something like that why would the other comparable trusts not be getting a comparable yield?

I will leave HFEL to others.

Dod

It looks to me more that their portfolio keeps giving them dividends despite the NAV of the investments they hold dropping- their biggest holding is BHP and with the special divs this is possible. I think the own money back case is slightly oversold, the dividend they pay seems to be covered in the main by income.

P12 of the 2022 annual report gives the detail.

https://www.fundslibrary.co.uk/FundsLib ... vGjErb&r=1