Equities have sunk during the coronavirus-indiced selloff and now offer a range of opportunities that haven’t been seen since the financial crisis.
Those choosing to use the services of fund managers are being presented with a plethora of options to take advantage of the low prices in equities.
ETFs that follow the price of indices offer low-cost exposure to indices such as the FTSE 100 for investors who want to passively track any broad recovery in stocks.
iShares Core FTSE 100 UCITS ETF does just that with an ongoing cost of just 0.07% and a 5.8% distribution yield at the end of March 2020 when the FTSE 100 was around 5,500.
The passive versus active approach to money management rages on and actively managed funds in the UK are as still as popular ever, despite the growth of ETFs. This has, however, created benefits for investors in the form of lower costs for OEICs, Unit Trusts and Investment Trusts.
In the actively managed space, we would point to high income funds in Shroders Core UK Equity and the Aberdeen Standard Equity Income Trust that yield 6% and 10% respectively.
Expect these yields to change as we learn of more dividend cuts but both funds are dominated by high-quality FTSE 100 companies such as Shell, BP, GSK, AstraZenec and British American Tobacco, so we wouldn’t expect the adjustments to the fund yields are overly dramatic.
A theme we feel that will be as important beyond the coronavirus crisis as it was before is sustainability and making investments that provide a positive impact.
With this in mind we continue to be impressed by JLEN Environment Assets that reaffirmed its dividend as many FTSE 100 companies scrapped them all together. At 109p JLEN yields in excess 5.8%.
The JLEN Investment Trust invests in a portfolio of renewable energy assets including hydro, biomass, solar and wind. Demonstrating the forward-thinking nature of management, JLEN announced the acquisition of a biomass plant as the UK moved towards the peak of coronavirus, a decison investors should take confidence in.