For sustainable inflation-proof income you need a blend of assets. While some investors prefer to allocate holdings themselves for those who prefer to leave it to the professionals here are five flexible investment trusts with multi-asset portfolios that pay a yield.
Personal Assets (PNL) Gold Rated
Morningstar analysts called Personal Assets trust "outstanding". Jackie Beard, head of closed-end research said that although fund manager Sebastian Lyon was only appointed by the board in March 2009, he has demonstrated his skills well at his own Troy Trojan fund since 2001.
Lyon’s process is focused on the long term and, while this is not an absolute return fund, he looks to preserve capital in falling markets while acknowledging his style is unlikely to take him to the top of the performance tables when markets rally hard. He dislikes companies that destroy capital and he often buys stocks that are unloved, with a longer-term mind set than many peers.
Scottish American (SCAM) Silver Rated
Scottish American Investment Company offers something a little different from other allocation funds, said analyst Szymon Idzikowski - but is only suitable for more risk-tolerant investors.
The portfolio can hold between 60 and 100 equities; it has been near the top of this range recently because of high volatility in the markets. Bonds, properties, and forestry take the number of holdings nearer to 140.
British Assets (BSET) Neutral Rated
It’s early days for the new manager of British Assets, but Beard thinks shareholders are in safe hands.
This fund’s income level is one of its key attractions for current and potential investors, so maintaining this is of paramount importance. To that effect, fund manager Phil Doel is in charge of the UK equity core portfolio and, while he sets the asset allocation overall, he uses his colleagues for the UK satellite, emerging-markets, global high-yield, and corporate-bond portfolios. At the forefront of every investment decision in this fund is the need to meet the income target.
Asian Total Return (ATR) Bronze Rated
For both fund managers, Robin Parbrook and King Fuei Lee, this is their first time in charge of a closed-end fund, so they are less familiar with their structural differences than some of their peers—the use of gearing being one such example. That said, they bring solid expertise in stock-picking and portfolio construction and a proven track record at their open-end fund. Further, the emphasis on capital preservation means the use of gearing will likely be limited.
Henderson Diversified Income (HDIV) Unrated
The fund manager's aim is provide shareholders with a high level of income and capital growth over the long term by investing selectively across fixed income asset classes including secured loans, high yield and investment grade corporate bonds.
