THE MUSIC TRUSTS THAT COULD HELP YOUR SHARES SING
FOR investors who also love their music, two song-focused investment trusts may appeal – Hipgnosis Songs and Roundhill Music Royalty.
Both make money for investors by buying back catalogues from famous musicians and then earning an income (royalties) every time the music is played on radio or via someone’s phone. In recent days, it emerged that Hipgnosis Songs could end up owning the rights to Pink Floyd’s back catalogue. The fund already owns the rights to more than 65,000 songs from artists such as Amy Winehouse, Nirvana and Rihanna.
Both trusts pay quarterly dividends, equivalent to 4.6 per cent a year. past five years, the trust has created total returns for investors of 36.8 per cent.
Some of these trusts – the likes of 3i Infrastructure, International Public Partnerships and HICL – are a victim of their own success, with share prices driven up by keen investor interest. So anyone wanting to join the party should tread carefully because the steady income they receive could be compromised by capital losses further down the road.
RENEWABLE ENERGY
INVESTMENT trusts that invest in renewable energy have stakes in wind and solar farms, making money for investors from the energy the farms generate which is then sold on.
Britton says their attraction is twofold. He explains: ‘You are backing green energy generation and receiving an attractive income.’
Hollands likes SDCL Energy Efficiency Income. The trust invests worldwide – from projects in the United States that convert cattle manure and food waste into green gas, through to companies such as Swedish-based Vartan Gas which supplies gas (most of it biogas) to homes and businesses in Stockholm. Hollands says: ‘It’s well positioned to take advantage of the tide of green regulation sweeping across Europe – and the development of energy-efficiency sectors in both the United States and the UK.’
The £1billion fund pays investors quarterly dividends, equivalent to an annual income of 4.7 per cent. Over the past three years, it has generated a total return of 28.0 per cent – it was launched in late 2018.
Other interesting trusts in this space include US Solar – a £292 million fund invested in more than 40 solar projects across the United States. It is the only London-listed trust to focus on US solar and is currently providing an income of 6.6 per cent a year.
Another is Gresham House Energy Storage which invests in facilities that enable energy from wind and solar power to be stored – and then passed on to customers when needed. It currently controls about 30 per cent of the battery storage market.
The trust pays quarterly dividends, delivering an annual income of 4.2 per cent. The only drawback is that the shares look expensive.