Further to the last post about the possible benefits of Investment Trusts I see or rather heard the FT Money Show Podcast is talking about this too this week. The episode covers Family Trust where wealthy families like the Rothchilds hold a large stake so you can invest along side them. Coincidentally it also covers the Dividend Heroes and also the benefits of the IT structure and independent boards etc.
Along the way it also touches on investing for income and see the closed end structure as an ideal way to do this via alternative assets like property and infrastructure or Green energy etc. They did mention though that many of these (like the Green energy funds) stand on big premiums. If that sounds of interest you can listen to it here.
With premiums and discounts in mind I did notice some results from an interesting looking Property REIT yesterday, called Residential Secure income (RESI) which in common with many other REIT's is standing on a discount, around 15% in this case and offering a decent yield of around 5.4% with the price at 92p and the NAV having moved up to about 108p from launch. Unusually it invests, as its name suggests, in Residential Property let to Housing Associations, part rent part buy owners and in the main Retired folk. They are just about fully invested after coming to the market just over two years ago and are now paying their target dividend of 5p which they hope to grow in real terms over time and achieve an 8% total return. So while overall it may not be that exciting and could I guess go to a bigger discount it does seem like a reasonably attractive way of becoming a social landlord without all the hassle.
While housing is quite a battle ground in the election presumably this type of operation could face some political or regulatory threat or opportunities depending on the shape of the next government. So maybe dull and not without it's risks but seems an interesting play on residential property and the housing shortage at the affordable end at a discount with a decent and potentially index linked yield, unless I'm missing something.