The Investment trust income Heatmap

After the initial publication of the 80-20 investor UK income fund heatmap and the Global income fund heatmap members asked for income heatmaps for other assets and fund types.

This lead to the publication of the Alternative asset income heatmaps.

Investment trusts as income-producing funds

However, a popular request was also for the production of an investment trust income heatmap. Investment trusts lend themselves particularly well as vehicles to produce a sustainable income, as demonstrated in 2020, even as companies slashed their dividends. By contrast, income-producing unit trust funds universally cut their income payouts in 2020.

There are a number of reasons that investment trusts are able to produce a sustainable income stream. Firstly investment trust managers are able to hold back up to 15% of their gross annual income in reserve. This can then be used in future to help smooth the fund's income payouts to investors and maintain them year on year.