- Esoteric as they may be, debt trusts are offering dividend yields that seem hard to ignore
- We look at where the risks taken might seem justified
The sharp rise in bond yields has had inescapable implications for many an asset class. With the UK 10-year government bond offering a 'risk-free' yield of more than 4 per cent, anything racier needs to justify its place in a portfolio with superior growth or income.
A flipside of that, however, is that some extremely high yields are available for those able to move up the risk spectrum in other asset classes. We’ve previously detailed the fact that big share price discounts and dividend yields can be found in the more established “alternative” investment trust sectors, with infrastructure standing out in particular. Investment trusts with a focus on debt are also offering some big yields. As our table shows, multiple trusts come with yields north of 7 per cent with some even in the double digits as of late November – although certain of these could be red flags.