Where’s the clever money going in the course of 2016? The consensus is that we could be in for further bumpiness: the EU referendum and US election should see to that, regardless of economic progress or otherwise across the regions.
On the marketviews.wpengine.com website, a poll of users’ asset class preferences for 2016 made quite interesting viewing: equities is well ahead, on 44%, but a further quarter of respondents favour commodities. Surprisingly, over a fifth choose cash over either bonds or property (both of 19%).
Meanwhile, however, with the 2016 Isa season now in full swing, there is no shortage of commentary providing ideas for how to invest your £15,240 allowance.
Income is a widely favoured theme. For those in need of an immediate and meaty income, Fundexpert.com recommends four funds which together will provide a payout of almost 6.5% – more than 50% over the current FTSE 100 yield – though this comes at the expense of capital growth in the future.
The Maximum Income Portfolio includes Henderson Asian Dividend Income, Schroder Income Maximiser, Fidelity Enhanced Income and Liontrust Global Income.
For investors who prefer the idea of an income that increases steadily over the years, hopefully outpacing inflation, the Association of Investment Companies (AIC) has published its annual Dividend Heroes – the investment trusts with the longest histories of year-on-year dividend growth.
Top of the table are City of London, Alliance Trust and Bankers, with a massive 49 years of dividend increases under their belts. But the AIC highlights 19 trusts with 20 years plus of dividend growth.
A further 18 trusts have increased their payouts annually for at least the last 10 years, according to the AIC’s supplementary round up of next generation dividend heroes.
A newcomer to this diverse line-up is Murray International on 10 years of increases; it is also paying a notably substantial 5.3% yield (as well as delivering 9% share price growth while the Global Equity Income sector as a whole has lost 1.5% over the past six volatile months).
Investors looking for a steadily growing income as well as capital growth over the years are targeted by Money Observer, with its Model Portfolio Lima (a higher-risk portfolio providing a growing income).
Lima is the top performer of Money Observer’s 12 portfolios over the four years since they were launched, with a total return of 80% to 1 January 2016.
The portfolio comprises three investment trusts: Scottish Mortgage, Troy Income & Growth and Lowland; plus Artemis Global Income, Invesco Perpetual Income, Schroder Oriental Income and PFS Chelverton UK Equity Income funds.
Finally, Bestinvest’s Jason Hollands has come up with a shortlist of investment trusts that could suit Isa investors. His picks include the following:
• Scottish Mortgage: a global one-stop shop with a ‘guns blazing, high-conviction approach’
• Henderson European Focus: as a great way into ‘our preferred developed market at the moment’
• Personal Assets: ‘a high emphasis on capital preservation’ for more cautious investors
• Pacific Assets: ‘the risks and challenges facing Asian markets are now well reflected in share prices’
• Standard Life Equity Income: ‘With the outlook for dividends deteriorating, we think an approach that provides maximum flexibility make sense.’
• F&C Commercial Property: a ‘high quality bricks and mortar trust’ at relatively good value.