Do you need income? Go beyond the obvious

Daily Telegraph – Your Money

By James Connington


Real estate and infrastructure investment trust

Regular property funds are already hugely popular among individual investors, but specialist listed real estate and infrastructure funds offer an alternative. These are investment companies that buy and manage property or infrastructure assets to generate an income. Those assets can range from solar farms to care homes. Many of these funds offer yields of 5pc or more, often with inflation protection through rises in rent or energy prices, depending on the focus of the fund.

Vincent McEntegart, a “multi-asset” investment manager at fund company Kames, said: “People perceive the listed property sector to be more risky than regular property funds, as the share price fluctuate. But these funds allow you to target segments that are performing strongly, such as medical properties.”

In Britain, he picked Tritax Big Box. This property trust invests in warehouses and logistics facilities used by retailers such as Amazon. Its shares currently trade at 9pc premium to the value of its assets; the yield is 4.5pc and last year’s charge was 0.93pc.

Another UK-based option is Bluefield Solar Income. Richard Curling, who manages Jupiter’s Fund of Investment trusts, said renewable energy infrastructure companies generally traded at lower premiums than highly popular general infrastructure trusts such as HICL and John Laing. “Solar is more reliable that wind, as solar radiation is pretty constant in the UK,” he said. Bluefield is his solar choice. The trust trades at an 8pc premium but still yields 6.6pc. Last year’s charge was 1.24pc. In the US, Mr McEntegart likes Medical Properties Trust, which yields 7pc. As it is listed on the New York Stock Exchange, investors should be able to buy it via stockbrokers that offer international share dealing.

Kames also holds US-listed Welltower in its multi-asset funds. It invests in care homes and health facilities and yields 4.7pc.

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