Tougher regulatory requirements that were introduced following the financial crisis have reduced the willingness of the banks to lend to UK small and medium sized enterprises (SMEs). This has created a lucrative gap in the market that a number of closed-ended funds aimed at income investors have sought to take advantage of.
A good example is Hadrian's Wall Secured Investments (LON:HWSL), which floated on the London Stock Exchange last June. The fund raised £80m at launch and it has now allocated 96% of the net IPO proceeds. As soon as it is fully invested the objective is to pay a 6% annual dividend on the issue price of a pound a share and to generate a NAV total return of 7% to 8% per annum.
Like most other income orientated closed-ended funds the shares have moved on to a premium to net asset value (NAV). This currently stands at 11%, although even at this level they still offer an attractive prospective yield of 5.6%. The high premium adds an extra risk, although the Board has said that they would consider share buy‐backs if the price were to slip to a discount of more than 5%.
by Evil Knievil| Evil Diaries| 1 mins. to read There was no borrow this morning in Sirius Minerals (LON:SXX), now 26p. And I had been waiting this last thirty-six hours to pounce. The weekend blather on this stock was stupendous.
by Zak Mir| Trading| 1 mins. to read It is usually not wise to catch a falling knife in the financial markets, or indeed, anywhere else. But the example of Metals Exploration (LON:MTL) does suggest that sometimes rules are there to be broken.
by Robert Stephens | Equities | 5 mins. to read It's always easy to spot bubbles in asset prices after they have burst. Doing so beforehand is more challenging.
by Victor Hill | Equities | 9 mins. to read The Tories are going to win the forthcoming British general election on 08 June handsomely if the opinion polls are to be believed.
by Zak Mir | Trading | 1 mins. to read It would appear we are somewhat spoiled for choice as far as bouncing minnows are concerned, with recent favourites Bos Global, Wandisco and Versarian all doing well.
Material contained within Master Investor Magazine and its website is for general information purposes only and is not intended to be relied upon by individual readers in making (or refraining from making) any specific investment decisions. Master Investor Ltd. does not accept any liability for any losses suffered by any user as a result or any such decision.
Ingen kommentarer:
Send en kommentar