- These three companies highlighted by our dividend yield screen have interesting total returns prospects
- Changing business dynamics affect the pure income characteristics of the shares
Investors get used to where the best sources of income are, but business dynamics change and with that the levels and reliability of dividend distributions.
Apax Global Alpha (APAX) – an interesting investment fund that allows retail investors to invest in the booming private equity market, usually the preserve of pension funds, sovereign wealth and hedge funds. The fund targets 20 per cent total annual return, of which 5 per cent arises from the dividend. Unusually, the dividend is set at 5 per cent of net asset value (NAV) and is not connected to annual profits: with the core fund NAV unlikely to decline, distributions look stable (if unpredictable) with the added spice of high, but likely lumpy PE-style capital returns.