DIVI targets an attractive and growing level of income with long-term capital growth, investing in a diversified portfolio of primarily UK-listed equities. It has a stronger focus on small and very small market capitalisation stocks than is typical of the UK Income & Growth peer group. As a stock specific portfolio there is no benchmark but the trust targets an initial yield of around 4% for the period to 31 May 2012 and income growth higher than other income funds.
The Diverse Income Trust (DIVI) aims to provide shareholders with an attractive income, as well as capital growth, over the long term through a bottom-up approach to investing in UK equities across the market capitalisation spectrum. This gives the manager a wider opportunity set from which to pick stocks and dial down portfolio risk. DIVI has also profited from put options that boosted cash levels when the market was extremely weak. Although DIVI’s income may decline in the short term, as many UK companies have recently cut their dividends, the board has recently maintained the third interim dividend, which suggests it expects this to be a transitory feature for the trust.