The unloved UK stock market has been enjoying a rare moment in the sun. After years in which international investors dismissed London as stodgy and provincial, a rebound in share prices has lifted the fortunes of one of the City’s stalwarts: UK Equity Income investment trusts.
The sector has returned 14% over the past year, 79% over five years, and 105% over the last decade. That performance has been accompanied by reliable dividends — an average yield of 4.1% — and shares in the sector now trade at a modest discount of 3.5% to net asset value, compared with 13.9% for the average investment trust. The question nagging investors is whether this resurgence can last.
At a webinar hosted by the Association of Investment Companies (AIC), a cluster of fund managers struck an optimistic note. Ian Lance of Temple Bar Investment Trust [LON:TMPL] argued that valuations remain the best guide to future returns. On both measures —…
