The path to financial freedom dry
However, ardent investment company fans looking for elusive yields might look at Bluefield Solar Income Fund BSIFthis is a London Stock Exchange-listed investment company which owns operational solar power plants and it is trading at a slight discount to NAV, unlike most other infrastructure companies. Most of the revenues are underpinned by long-term contracts under the UK government's renewable energy incentives schemes and these contracts have built-in inflation-linked increments.
While the CF Woodford Equity The path to financial freedom dry Fund and Merchants Trust option with no intrinsic value exposure predominantly to large-cap income stocks, investors might consider diversifying their sources of UK dividends further down the market cap spectrum to funds that allocate more into mid- and small-cap stocks.
These parts of the market are more domestically focused, where the earnings outlook is better than the FTSE Consider some exposure to European yield-generating stocks.
Anyway, I am sharing the few things about financial freedom as promised in my last post.
European shares are more attractively valued compared with long-term trends than either US or UK stocks and the combination of the recently announced QE programme by the European Central Bank, and the fillip provided by the fall in energy prices, should provide a supportive backdrop to European equities at a time when those investing in sterling are doing so from a favourable exchange rate. The underlying stocks in the fund are based on the Schroder Income fund, although covered call options are used to sell the upside on some stocks in order to produce extra income.
It pays a yield of 6. The other area I would look at is bonds.
Three of the four holdings are effectively high-yield bond funds and even the Henderson Strategic Bond fund has a significant weighting in high yield. If bonds are being held to provide extra protection and diversification then there are better options, albeit with lower yields. BlackRock Commodities Income - one to sell?
I like the team, but it hasn't been a great area to be invested in for the last three or four years. I have no idea when this sector will turn, therefore I wouldn't advocate selling, just a warning flag that it is quite a risky position. The collapse of base metal and oil prices will likely mean that will see corporate profit warnings and possible dividend cuts, which would impact on the performance of this particular fund, exposed as it is to what is happening in this sector.
It is a high-risk fund as demonstrated by its performance, having fallen by 25 per cent in the past three years. Psychologically it can be difficult to sell a holding which is showing a big loss.
However, what matters is its future prospects. This remains a high-risk fund, and while it could bounce back, it could just as easily fall further. If this fund is held it should be in the alternatives section with a much lower weighting.