Hunt for Income  

Can investment trusts save income investors?

  • Explain the real-life impact of dividend cuts on income investors
  • Identify features that allow investment companies to smooth income
  • Explain how an investment company’s revenue reserve works
CPD
Approx.30min

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As interest rates remain lower for longer, the hunt for income continues.

Nick Britton is head of intermediary communications at the AIC

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CPD
Approx.30min

Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

  1. True or false, ‘revenue reserve’ is a feature of investment companies that allows them to hold back up to 15 per cent of the income they receive in any year from their investments.

  2. What is a common misconception about revenue reserves?

  3. Investment companies in the AIC’s Infrastructure sector trade at an average premium of;

  4. Which of the points below is NOT listed as an advantage of paying dividends from capital profits?

  5. True or false. A potential downside of this practice for some investors is the taxation differential between income and capital. Dividends from capital profits are treated just like normal dividends for tax purposes.

  6. What has softened the blow when it comes to the hit on income investors’ portfolios this year?

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  • Explain the real-life impact of dividend cuts on income investors
  • Identify features that allow investment companies to smooth income
  • Explain how an investment company’s revenue reserve works

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