The average UK growth & income trust has outperformed its open-ended counterpart by 6% per annum over the last ten years. Kieran Drake, research analyst at Winterflood Securities, explains why.
For more than three years now, the Bank of England's base rate has been 0.5% history. Such low interest rates have led many investors to look elsewhere for income and one of main the beneficiaries has been the UK equity income sector, which provides investors a reasonable level of income combined with the potential for capital growth. The FTSE All Share, for example, has a current dividend yield of around 3.5%. Revenue reserves Once investors have identified the sector as one which will meet their income requirements, they have a choice between open-ended and closed-ended funds. It i...
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