11 September 2023 - Investors in the VT Chelsea Managed Monthly Income fund will be celebrating this week when they receive a bumper dividend payment.
After a record year for dividends from investments picked for the fund, we are delighted to announce news about the dividend payment which will be paid to investors this week.
The final distribution for the year will be 1.276967p - almost 3.5 times the usual payment of 0.37p – and the highest dividend ever paid by the fund*.
A total 5.327p has been paid per unit to investors during the year and the fund has paid over 28p of income since it launched in June 2017*.
It is the fifth consecutive year that the final distribution has been paid – this despite the dearth of income generally during the Covid pandemic in 2020/2021, the volatility in markets following the Truss/Kwarteng Budget in 2022 and the high inflation and interest rates that have plagued markets over the past 18 months.
The income produced by the fund has been driven by many of the investment trusts held in the portfolio. Bluefield Solar, Greencoat UK Wind, Impact Healthcare, Assura, Sequoia Economic Infrastructure Income and the Renewables Infrastructure Group have all increased their dividends this year.
The fund has also been actively trading – selling or reducing exposure to trusts at lower yields and higher share prices and then buying them back at much better prices and higher yields.
More income has come from the fund’s increased exposure to bond funds as interest rates and then yields have increased.
Darius McDermott, one of the investment advisers to the fund, commented: “We cannot control what markets will do in the short term, but we can have a pretty good control of the income. We are seeing many excellent trusts now trading on 7%+ dividend yields and huge discounts. We hope to increase the fund’s dividend further in the future.”
“We’re incredibly proud that, as well delivering a consistently attractive income for investors, the fund has also been successful in generating excellent performance,” continued Darius. “Since launch, the total return has been 31.65% compared with 10.75% for the average fund in the IA Mixed Investments 20-60% Shares sector**. That makes it the second best performing fund out of a peer group of 133**.”
Sam Holder, operations director at Chelsea Financial Services, added: “In Chelsea Financial Services' 40th year, our clients are celebrating with us.
“In an era marked by global uncertainty and rising living costs, it’s fantastic that for the fifth consecutive year, the fund is not only paying another bumper dividend, but a record one at that. We would like to thank our clients for choosing to invest in the fund and we hope they enjoy this year’s extra payment.”
The VT Chelsea Managed Monthly Income fund aims to produce monthly income*** with some capital growth over the long term, but with lower volatility than global equities****. The fund has a target weighting of between 40% and 60% in UK and overseas equities, although it may also invest in other assets including bonds, property, gold, and targeted absolute return strategies. Exposure to assets will typically be via open-ended funds, investment trusts and exchange traded funds. The fund currently has £49.1 million assets under management and the current yield is 5.69%*****.
Clients will receive the dividend payment by the middle of next week.
*Please note these figures are for the income share class of the fund
**Source: FE Fundinfo, total returns in sterling, 5 June 2017 to 5 September 2023
***Income will be smoothed to pay a roughly level amount over 11 months, with a final adjustment payment in the 12th month, which may be more or less than the regular payment. ****Long term is 5+ years. The aim is to have lower volatility than global equities over a rolling 5-year period.
*****Source: Valu-Trac/Chelsea Financial Services, 31 August 2023
The VT Chelsea Managed Funds are for investors who prefer to make their own investment decisions, without personal advice.
Valu-Trac Investment Management Limited is the authorised corporate director (ACD) and investment manager of the VT Chelsea Managed Funds. Valu-Trac is authorised and regulated by the Financial Conduct Authority (FCA). Valu-Trac’s FCA registration is 145168. Chelsea Portfolio Management Services Limited will be the investment adviser for the VT Chelsea Managed Funds