Just a quick note on European Assets Investment Trust that I hold which invests in European Small Cap. equities. It offers a 6% yield and has just announced a 27% increase in the dividend it is going to pay for next year. How this works is best explained by the following extract from their announcement today:
"The Board is pleased to confirm that the Company's stated distribution policy will be continued such that the annual dividend will be equivalent to 6 per cent of the net asset value per share at the end of the preceding year. The net asset value per share has recorded an increase over the year which results in a 27 per cent increase in total 2014 dividends for the Company to Euro 0.699 per share (2013: Euro 0.5502 per share, net). The 2014 dividends will be paid in three equal instalments of Euro 0.233 per share on 31 January, 30 May and 29 August 2014. The January dividend payment of Euro 0.233 will be paid to shareholders on the register on 17 January 2014, having an ex-dividend date of 15 January 2014. Dividends are declared in Euros and paid in Euros (bearer shares) or in Sterling (registered shares)."
The point to note from this is that while it is a nice yield - as we all know shares can fall as well as rise so it could just as easily be cut next year if the Net Asset Value (NAV) falls over the next 12 months. However, I'm happy to run with it as European equities are still looking reasonable value and this trust offers a good way to participate in the small cap area with a good yield to boot, the total return in sterling over the last year was 37.8%.
Other points to note are that as an Investment Trust it can trade at a discount or a premium to NAV, but currently stands around par. It also has the ability to borrow (gear) which can magnify gains and losses and this is currently at 7%. The Management charge is 0.8%. If you are hungry for income the shares go ex dividend the latest €0.233 payment just announced on 15/1/14 for a yield of 2%. If it is of interest you can check out fact sheets, reports and presentations etc. at their website.