Funds that can power up your portfolio

MANY investors prefer to buy a diversified fund to gain exposure to utility stocks. Some funds hold shares in these companies and others hold debt in the form of corporate bonds.

Tortoise Ecofin Global Utilities and Infrastructure Trust looks beyond our borders. Jean Hugues de Lamaze, managing director, says that the vast majority of the companies he holds in the fund have issued some form of communication on earnings and dividends for the year ahead and, by and large, he expects dividend income from his holdings to be within 5 per cent of last year’s figure. The fund yields 4.3 per cent. It is up 27.1 per cent in the past three months, 20.2 per cent in the past year and 49.7 per cent in the past three years.

Teodor Dilov, fund analyst at Interactive Investor, likes Utilico Emerging Markets Investment Trust which also yields around 4.3 per cent. The company is exposed to Brazil, China and India as its top three countries. It is up 18.9 per cent in the past three months, down 22.3 per cent in the past year and down 10.4 per cent in three years.

Russ Mould, at AJ Bell, likes the Legg Mason Global Infrastructure Income fund, which has a high allocation to the three traditional utility areas in many countries, with 85 per cent of the fund invested in the generation or transmission of gas, electricity or water.

It is up 18.7 per cent in the past three months, 4.6 per cent in the past year and 20.1 per cent in the past three years.

Mould says an alternative would be the First State Global Listed Infrastructure fund which has around 50 per cent in utilities but as a consequence has a low yield at around 3 per cent. He says: ‘Both of these funds bring good diversification to most private investors’ portfolios.’

It is up 15.1 per cent in the last three months, down 5.4 per cent in the past year and up 9.5 per cent in the past three years.