Low interest rates, annuities and gilt yields are driving investors towards assets such as infrastructure investment trusts, that offer stable, inflation-linked income. But with many broad infrastructure trusts trading at very high premiums to net asset value (NAV), it's worth considering renewable energy investment trusts, which also offer attractive yields but typically trade on lower premiums.
There are six renewable energy infrastructure investment trusts. Five focus on wind and/or solar generation, while John Laing Environmental Assets (JLEN) also invests in waste management.
The sector has an average yield of about 5 per cent compared with 4 per cent for broad infrastructure investment trusts, according to Winterflood Securities as at 19 August.