We'd like to remind Forumites to please avoid political debate on the Forum... Read More »
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are - or become - political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
This is a scenario where investment trusts can do the work for you. Take, for example, JP Morgan Global Growth & Income:
And investors now benefit from JGGI’s dividend policy, introduced in 2016, which pays at least 4% of the net asset value. In part, JGGI is able to make this commitment because as an investment trust, it is able to hold capital reserves. It also has the freedom to borrow money to buy assets, known as gearing - providing the means to buy attractive stocks without the need to sell existing assets. “The 4% dividend we pay each year is made up roughly 50% from the yield of the underlying stocks in the portfolio, and 50% from our capital reserves,” Woodhouse explains. “That’s a sustainable model, allowing the capital to grow.” A yield of that margin from stocks alone in the current market would be risky at the very least: “The market would have some scepticism about the sustainability of any stock that is yielding above 4%,” Woodhouse observes. “Yield is not easy to find in the world today - so I believe a 4% yield is a very good proposition for our shareholders.”
Its current largest holdings are many growth tech stocks that wouldn't get you anything like 4% (Microsoft, Amazon, Nvidia, Taiwan Semiconductor) and then other sectors, like United Health and LVMH.
