Edison issues research - The Diverse Income Trust
OREANDA-NEWS. The Diverse Income Trust (DIVI) is a UK equity income fund that is differentiated by investing across the market capitalisation spectrum. At 31 December 2015 around one-third was invested in the largest 350 UK stocks with the balance in smaller quoted stocks. Since launch in 2011 it has grown substantially, and has outperformed both the broad UK market and the high-yielding large- and mid-cap sector in total return terms in three of the last four years. It has also outperformed the majority of its sector since launch. A further element of differentiation comes through a FTSE 100 put option. This runs through to March 2017 with a strike level of 6,000, and also provides an element of downside protection covering around one third of the portfolio.
DIVI's objective is to provide an attractive and growing level of dividends, coupled with some capital growth over the longer term. It invests in a diversified portfolio primarily of quoted or traded UK companies, with a bias to small- and mid-cap stocks. It may also invest in FTSE 100 companies where the manager believes this will increase shareholder value. As a stock-specific portfolio, there is no benchmark, but DIVI targets income growth higher than other income funds.