I Start investingI found it difficult to generate diversified investment when I had enough cash to buy a few shares. Buying a mutual trust turned out to be a great solution to this problem.
39-year dividend growth
Merchant trust (LSE: MRCH) We have provided a dividend yield of 4.9% and have increased the dividend for 39 consecutive years.Trusts usually make large investments FTSE 100 A company that pays regular dividends. Top Holdings at the end of November is included GlaxoSmithKline, British American Tobacco When National grid..
This conservative strategy is unlikely to win medals due to rapid growth. However, merchant managers can increase their profits by using their debt to buy stock. This has been working well lately — the Merchants Trust stock price rose more than 20% in 2021, while the FTSE 100 stock price was less than 15%.
Debt increases the risk because it can increase losses in the event of a market crash. Another risk I can see is that GlaxoSmithKline, the trust’s largest holding, plans to reduce its payments next year.
However, Merchants Trust has a long track record with experienced managers. I am pleased to deposit some of my cash in this trust in 2022.
Dividend from solar power generation
My next choice is renewable energy stock Foresight Solar Fund (LSE: FSFL).. Despite its name, Foresight is also an investment trust.
Foresight was listed on the London Stock Exchange in 2013 and is one of the oldest renewable energy stocks on the market. As the name implies, it generates most of the income from investments in PV assets. The total capacity of these exceeds 1GW.
The UK is clearly not the most attractive place for solar power, but Foresight is not limited to the domestic market.I also have trust Solar assets Expanding to battery storage in Australia and Spain.
Foresight shares currently offer an attractive 6.9% dividend yield. The main risk I can see is the gradual withdrawal of government subsidies for solar power in the future. This exposes uncertain wholesale electricity prices and can put pressure on dividends.
For now, Foresight’s 6.9% payment looks safe to me. I am thinking of adding it to my portfolio this year.
This investment trust provides a defensive 5% income
In my view, supermarkets are one of the most defensive businesses in the world. No matter what else is happening in our lives, we always need to shop for groceries on a regular basis.
One of the investment trusts that has achieved stable performance in recent years is Supermarket Income REIT (LSE: SUPR).. This real estate investment trust specializes in purchasing real estate in supermarkets and leasing them to businesses such as: Tesco When Sainsbury..
Leasings in large supermarkets are generally long and payments are well defined. For example, we recently acquired Tesco Supermarket, which has a current lease term of 17 years. This means that the trust has a good grasp of future cash flows — useful for dividends.
The risk I can see here is that the real estate market in supermarkets is currently very strong. The price is quite high. If interest rates rise or real estate prices fall, I think supermarket income REIT dividends may be squeezed.
But the current situation still looks comfortable to me. The expected dividend yield for 2022 is 5% and we are considering supermarket revenue in our portfolio.
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Roland Head There are no positions in any of the above stocks. The Motley Fool UK recommends British American Tobacco, Foresight Solar Fund Limited, GlaxoSmithKline, and Tesco. The views expressed about the companies mentioned in this article are those of the author and may differ from the official recommendations made by subscription services such as Share Advisor, Hidden Winners, and Pro. Here at The Motley Fool, given the various insights, A better investor than us.
Three investment trusts to purchase with income of 5% or more in 2022
https://www.fool.co.uk/2022/01/02/3-investment-trusts-id-buy-for-a-5-income-in-2022/ Three investment trusts to purchase with income of 5% or more in 2022