UK income trusts see premiums rocket as investors hunt for yield

The heavy market sell-off over the past month has pushed preiums in the closed-ended UK income sector to near all-time highs as investors hunt for income, according to analysts.

Several popular income trusts, such as Neil Woodford’s Edinburgh investment trust and Henderson’s newly launched International Income fund, headed up by Ben Lofthouse, have moved onto double-digit premiums. Analysts including Oriel Securities’ Iain Scouller, and Charles Cade of Numis Securities said investors have flocked to the sector in an attempt to preserve income amid volatile markets. Scouller and Cade said the move has left the sector looking expensive, with premiums excessive. “Over the past couple of weeks we have seen many discounts narrow and we think this partly refl...