Investment Trusts Quarterly: Growth and income

Published on 13 January 2012
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The Fed has advised that it plans to keep short-term interest rates close to zero until at least mid-2013, if US economic growth remains weak. The eurozone crisis and faltering UK growth suggests that the same applies here. The substantial growth in alternative asset classes offering attractive yields, such as infrastructure and floating rate debt, illustrates investors’ demand for income that limits or diversifies risk and offers some protection against inflation. Investment trusts with traditional equity income mandates are also in demand and are still trading at historically tight levels. Many are trading at premiums to their NAVs, despite recent volatility in equity markets.

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