Going for growth

These three aim to deliver a combination of growth and income, to build your wealth while working and deliver income after you have stopped.

Perhaps the most exciting is JP Morgan Global Growth & Income (LSE: JPGI), the best performer on the Global Growth & Income sector measured over 10 years, up 257% in that time, and also over five years, when it returned 91%, according to Citywire. Past performance is no guarantee of future success, but management is clearly doing something right.

Income for sale

This £425m global fund was launched in December 1964 and aims to outperform the MSCI All Country World Index over the long-term with a high conviction portfolio of typically 50-90 stocks, built through research-driven bottom-up stock picking.

The trust aims to pay dividends totalling at least 4% of its net asset value each quarter, and currently yields a generous 3.68%. It trades at a small premium of 0.95%, which is a sign of a fund in demand. Check its top holdings against your own portfolio for clashes: 4.6% of the fund is in Google-owner Alphabet, with other US stocks Microsoft, United Health Group, Pioneer Natural Resources, Union Pacific, Citigroup and Visa figuring strongly.

Global reach

My next tip is another global trust, Invesco Perpetual Select Trust Global Equity Income (LSE: IVPG). Again, it aims to deliver long-term income and capital growth through a globally diversified portfolio of stocks. Launched in 2006 this is a smaller fund with just £68m under management but is another top performer returning 187% over 10 years, and 72% over five.

This is around 35% invested in Europe and also the US, with 18% in the UK, and the remainder in Asia-Pacific and Japan. The top three holdings are Royal Dutch Shell, Chevron and BP, and with Total at number six you are getting plenty of oil exposure. Orange, Pfizer and Nasdaq also feature in the top 10. This offers an attractive yield of 3.25% and trades at a slight discount of -1.08,

Premium fund

Finally, the Scottish play. Although actually, Scottish American Investment Company (LSE: SCAM), managed by Baillie Gifford, is another global fund and this one comes with a truly long-term pedigree, having been launched way back in 1873. Founder William Menzies thought he could offer a better income than the “pitifully low” 3.5% offered by the Bank of England at the time. Now it pays just 3%, although of course these are strange times.

The trust is up 154% over 10 years, and 64% over five. It  also has large exposure to Europe, around 36%, with a smaller US focus at 24%, and a spread of Asia-Pacific and international equities. Top holdings include Deutsche Boerse, Coca-Cola, Johnson & Johnson, Prudential, Hiscox and Microsoft. This is the largest trust of the three with £525m under management. It trades at a premium of 2.02.

Funds like these could even make you a millionaire. There is some crossover, so you may want to pick your favourite and match them with others. Then sit back and let the growth and income flow.

The post Forget the State Pension: these 3 funds could help you retire in comfort appeared first on The Twelfth Magpie.

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• Is there any value left in Lloyds shares now they’re over £1?
• How much would I need in a Stocks and Shares ISA to target £19,036 a year in second income?
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harveyj has no position in any of the shares 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.

Mark Barnett

In the UK equity space, the Perpetual Income & Growth Investment Trust (LSE: PLI) offers a promising income outlook with a dividend yield of 3.8%.

It’s an investment trust which is run by well-regarded fund manager Mark Barnett. He has been at the helm of the fund for nearly 19 years now, using a long-term, high conviction approach to select stocks. The fund seeks to achieve capital growth and real growth in dividends over the medium-to-long term.

Barnett is a valuation-driven stock picker that reckons attractive opportunities exist in areas which would traditionally be seen as uncorrelated to the wider market and economy. He is bullish on a number of UK domestically-exposed companies and has recently increased the portfolio’s UK domestic exposure via new investments in A J Bell, British Land, Eddie Stobart Logistics, McBride and Secure Income REIT.

Value for money

The trust also stands out for investors seeking good value for money. With shares in the fund trading at a 12% discount to its net asset value (NAV), prospective investors have the chance to buy a stake in the fund’s assets for less than the sum of its parts.

Perpetual Income & Growth’s discounted valuation reflects negative sentiment towards the fund after its recent underperformance against the benchmark FTSE All-Share Index. The fund has been underperforming the market for two consecutive years now, missing out from the commodities-led recovery in the stock market due to its limited exposure to mining stocks and greater domestic focus.

Longer term, however, its track record is still impressive with the fund achieving a cumulative NAV total return of 136% in the 10 years leading to 31 March 2018, against the benchmark’s gain of 91%. What’s more, fund fees are relatively low, with ongoing charges of just 0.7% last year, marking it out as an attractive core investment position.

Track record

The Scottish American Investment Company (LSE: SCAM) is another good option for investors seeking steady income growth. In the global equity income space, the fund has one of the longest track records for raising its annual dividends, with 37 consecutive years under its belt.

The trust is one of the oldest investment trust companies still in existence, dating back all the way to 1873, although it has since undergone significant changes in terms of its investment strategy and management. Its current aim is to grow its dividends at a faster rate than inflation by increasing capital and growing income.

Its portfolio is merely globally diversified, but also has exposure towards other asset types, such as bonds and property. Equities still account for 80.1% of total assets, and the trust’s largest stock holdings include Deutsche Boerse (2.1%), ANTA Sports Products (2.0%), Coca Cola (1.9%), CH Robinson (1.9%) and Prudential (1.9%). UK property investments account for a further 14.9%, while fixed income represents 5% of its assets.

Scottish American provides a dividend yield of 3%, with shares trading at a slight premium to NAV of 4%.

The post 2 top investment trusts for retirement income appeared first on The Twelfth Magpie.

More reading

• Why Barclays shares could have a huge second half of 2026
• Back below 500p, is it time to consider BP shares again?
• Is there any value left in Lloyds shares now they’re over £1?
• How much would I need in a Stocks and Shares ISA to target £19,036 a year in second income?
• After huge new nuclear deals, are Rolls-Royce’s sub-£15 shares set to power higher?

Jack Tang has no position in any shares mentioned. The Motley Fool UK has recommended British Land Co. 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.

Their closed-ended structure means an investment trust’s performance is unaffected by asset flows, enabling it to invest in some illiquid asset classes and emboldening management to take a longer-term view. As such, investment trusts have often performed better compared to unit trusts and other collective, or pooled, investments.

And when it comes to finding reliable, steadily growing streams of income, the investment trust sector has a long and proud history of dividend growth. This is helped by the fact that investment trusts can hold back some of the dividend income they earn, allowing them to supplement dividend payments to shareholders in leaner years — something unit trusts and other open-ended funds cannot do. As a result, there are now more than 20 funds that have increased their dividends for 20 or more consecutive years, according to data from the AIC.

UK equity income

JPMorgan Claverhouse Investment Trust (LSE: JCH) is one such fund, with 44 years of consecutive dividend increases under its belt. It aims to provide a combination of capital and income growth from a portfolio consisting mostly of UK stocks.

The company aims to hold between 60 and 80 individual equities in which the fund manager has high conviction, with the flexibility to invest across the breadth of the UK equity market. Large-caps such as Royal Dutch Shell (7.5%), HSBC (6.6%) and British American Tobacco (5.3%) dominate its top 10 holdings, but its portfolio is noticeably overweight on mid-caps Electrocomponents (2%), Synthomer (1.9%) and Fevertree Drinks (1.7%).

Sector-wise, the trust has the largest exposure to financials (28.5%), consumer goods (17.6%) and industrials (13.3%).

Dividends are paid quarterly, with the total paid last year amounting to 24.5p, giving its shares a healthy yield of 3.4%. Fees are reasonable too, with ongoing charges estimated to total 0.76% over the past year.

Global diversification

Another investment trust worth a closer look is The Scottish American Investment Company (LSE: SCAM). With 37 years of consecutive annual increase in shareholder payouts, this fund has a slightly shorter track record of income growth; however I reckon this is made up for by its superior recent performance and its more diversified investment strategy.

Although the focus of its portfolio is on global equities, the company also owns fixed-interest and direct property investments, which represent 5.8% and 13.8% of its portfolio value, respectively. European equities represent its single biggest weighting, accounting for 35.3% of its portfolio, and this is followed by North American stocks, which account for a further 23.6%.

Historic performance figures for the past three years are encouraging as shares in the fund delivered a total return of 64%, significantly beating Claverhouse’s performance of just 32%.

On the downside, shares in The Scottish American Investment Company trade at a slight premium to its net asset value of 7%, against Claverhouse’s current discount of 3%.

Shares in the company currently yield 3%, with ongoing charges of 0.87%.

The post Planning for retirement? Consider these dividend investment trusts appeared first on The Twelfth Magpie.

More reading

• Why Barclays shares could have a huge second half of 2026
• Back below 500p, is it time to consider BP shares again?
• Is there any value left in Lloyds shares now they’re over £1?
• How much would I need in a Stocks and Shares ISA to target £19,036 a year in second income?
• After huge new nuclear deals, are Rolls-Royce’s sub-£15 shares set to power higher?

Jack Tang has no position in any shares 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.