And if you are looking for somewhere to invest your funds, I’m going to take a look at two of my favourite dividend investment trusts and outline why I think they deserve a place in your Stocks and Shares ISA. 

Global finance 

My first investment trust pick for income investors is Law Debenture Corp (LSE: LWDB). This company’s a bit of an anomaly in the investment trust world because it’s essentially a financial services business with an investment fund attached. 

The financial business provides essential management services to pension providers and asset managers. This side of the company is growing rapidly. Revenues increased 9% in 2018 and management is expecting this trend to continue into 2019, which should support further dividend growth. 

Indeed, this side of the business has helped the investment trust build a 40-year track record of dividend increases. During this period, the firm has delivered annualised dividend growth of 4.5%. On top of the investment business, there’s the group’s investment trust portfolio, which is currently comprised of leading blue-chip FTSE 100 dividend stocks. 

Management has followed a similar investment strategy for the past few decades and, over the past 10 years, growth of the portfolio combined with the growing investment services business has produced a total share price return for investors of 240.3%. That means £1,000 invested in Law Debenture 10 years ago would have been worth £3,4351 at the end of 2018. 

At the time of writing, the shares support a dividend yield of 3.1% and trade at a discount to the net asset value of around 7%. The annual management charge is approximately 0.45%. 

International income 

Law Debenture’s portfolio is very UK-focused. Considering all of the uncertainty facing the UK right now, I think it’s also sensible to have some exposure to international stocks, and Murray International Trust (LSE: MYI) meets this aim perfectly, in my view. 

Murry International’s portfolio is invested around the world, predominantly in North America and Asia Pacific. Only 10% of the portfolio is invested in UK equities, and the rest is spread globally, invested in cash-rich, high dividend stocks such as Mexican airport operator Grupo Aeroportuario del Pacífico. 

Other global income investments included Taiwan Semiconductor, Unilever Indonesia and Chilean Chemical company Sociedad Química y Minera. 

This global income portfolio provides a steady income for the trust, which it then returns to shareholders. The current dividend yield is 4.4%. 

The one downside of this international portfolio is that it’s slightly more expensive to maintain than a domestic-focused investment trust. Murray International’s annual expense ratio is 0.7%, and the shares currently trade at a premium to net asset value of 3.5%. 

Still, I think it’s worth paying the extra money to get exposure to a broad basket of international income investments, managed by a highly experienced team. The firm’s senior investment manager is Bruce Stout who’s been investing internationally since 1987. That’s why I’m buying Murray alongside Law Debenture for my ISA today.

The post 2 dividend investment trusts I’m buying for my ISA appeared first on The Twelfth Magpie.

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Rupert Hargreaves owns shares in Law Debenture Corp and Murray International Trust. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Law Debenture Corp (LSE: LWDB) is one of my favourite investment trusts for this reason.

Strong track record

Law Debenture is not your average investment trust. This company is a financial services business with an investment trust attached, which was initially established to invest clients’ money. Its professional services arm and investment portfolio is a potent combination that has enabled Law Debenture to generate outstanding returns for investors over the past decade. 

Indeed, over the past 10 years, the firm’s total net asset value return is 169% compared to the FTSE Actuaries All-Share Index total return of 111%. The fund’s total share price return is 203% since June 2008.

And I expect this trend to continue. Law Debenture’s financial services business offers services such as corporate and pension trust management as well as governance solutions, all highly specialist sections of the market where reputation counts for everything and areas where companies are more than happy to outsource to lower costs. Profit after tax at this division increased 10.7% year-over-year for the half year ended 30 June 2018.

Alongside the professional services business, there’s Law Debenture’s investment trust. The portfolio is managed by James Henderson of Janus Henderson Investors. The main holdings are FTSE 100 dividend stalwarts such as Royal Dutch Shell and BP. Some 64% of the portfolio is invested in the UK, with the remainder spread across Europe North America and Asia. So, if you’re worried about the impact Brexit might have on your portfolio, this globally diversified investment trust offers plenty of diversification. Further, the annual management fee is less than 0.5%. 

The latest net asset value (NAV) is 697p per share so you can currently acquire this investment trust at a 12% discount to NAV. The current dividend yield is 2.8%.

Defensive income 

If Law Debenture does not interest you, Target Healthcare (LSE: THRL) might be a better buy. This company owns and operates specialist, purpose-built UK care homes on long leases. 

According to the group’s results for the year ended 30 June 2018, published today, the weighted average unexpired lease term of its current portfolio is 28.5 years. With income guaranteed for nearly three decades on the company’s care home portfolio, I’m confident that Target Healthcare will benefit any retirement portfolio. 

Today the group reported a 3.7% increase in NAV per share to 105.7, along with a 2.7% increase in its annual dividend to 6.5p. Based on these numbers, the trust is currently trading at a slight premium (6%) to underlying NAV and supports a dividend yield of 5.8%.

Target Healthcare might not be shooting the lights out regarding growth, but if you are looking for a long-term income champion, then it seems to me as if this healthcare real estate investment trust has all the hallmarks of an income play you can buy for your retirement portfolio and forget.

The post 2 top income investment trusts that could help you retire early appeared first on The Twelfth Magpie.

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Rupert Hargreaves owns shares in Law Debenture Corp and Royal Dutch Shell. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

It has the single goal of achieving long-term capital growth at a rate higher than the total rate of return from the FTSE Actuaries All Share Index by investing in a geographically diversified portfolio. Not only has it met this goal, but it has nearly doubled its benchmark return over the past 10 years. 

According to the full-year 2017 annual report, over the past decade, Law Debenture has produced a total return for investors of 154%, compared to the FTSE Actuaries All-Share Index total return of 85% over the same period. The performance has also exceeded that of its global peer group, which produced a total return of 137% over the past decade. 

Multiple income streams

It derives its income not only from investments, but also professional services provided by the wider group, giving it an edge over the rest of its investment trust peers. It also means the company is globally diversified across business lines, so it should be able to continue to produce positive returns even if markets tank. 

However, despite this advantage, and the trust’s positive performance over the past decade, the shares currently trade at an 11% discount to the reported net asset value of 670p per share. As well as this discounted valuation, the shares support a dividend yield of 2.9%, which is less than the wider market, but considering the firm’s record of capital growth, I’m happy to overlook the lack of income. 

To add to the trust’s appeal, it only charges 0.43% per annum and there’s no performance fee levied on top. 

Private investing 

Law Debenture’s performance history, diversified income stream and low charges show clearly that the trust is working to achieve the best returns for investors, and the same can be said for Caledonia Investments (LSE: CLDN)

Caledonia is another business that invests outside of the public markets to achieve the best returns for investors. The group owns stakes in bingo operator Gala Bingo, pub company Liberation and recently raised £80.2m from the sale of the Sloane Club, a private members club in London. 

Its returns are not as high as those of Law Debenture, which can be blamed, to a certain extent, on its business model. Indeed, it usually takes longer to realise value from private investments rather than those in the public equity markets as there’s no daily price for the assets. It can take several years for asset sales to be crystallised. Nonetheless, the trust has still produced an annualised 13% over the past five years, beating the FTSE All-Share by 3% per annum over the same period. 

And investors can currently snap up shares in this private equity business on the cheap. The last reported net asset value was 3,311p, around 20% above the current market price. As well as this discount, the stock also supports a dividend yield of 2%.

The post Is this an unmissable opportunity to snap up these 2 global investment trusts? appeared first on The Twelfth Magpie.

More reading

• The £15bn defence splurge that could send UK shares soaring in July
• Up 446% in 12 months! What’s next for the Ceres Power share price?
• How much is needed in an ISA to unlock £1,220 of passive income a year?
• Forget meal deals! Here’s how £8 a day could be worth £357,000
• Up 132% and surging, how is this FTSE 250 share STILL so cheap?

Rupert Hargreaves owns no share mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.