3 high-dividend investment trusts to consider for passive income
Dividends are never, ever guaranteed. Even the most dependable dividend share can slash, postpone, or even cancel shareholder payouts when a crisis rears its head. However, investment trusts that carry a basket of equities can take the sting out of this threat.
By holding a wide selection of shares, these trusts draw income from a mix of companies, industries and regions, thus reducing the impact of dividend shocks from one or two holdings.
With this in mind, here are three top investment trusts to consider. Today, their forward dividend yields comfortably beat the FTSE 100‘s 3.3% average.
Asia focus
Henderson Far East Income (LSE:HFEL) seeks to capture the enormous investment potential of Asian markets. From a dividend perspective it’s a high performer, having risen annual payouts each year since 2007.
Dividends are also on the large side, and for this year its yield is an enormous 10.2%.
Focusing just on Asia means it carries greater regional risk than global funds. Yet this strategy also leaves it laser-focused on some of the world’s largest and fastest-growing economies like China, India and the Philippines.
In total, this Henderson Fund holds shares in 73 different companies, ranging from cyclical shares such as Taiwan Semiconductor Manufacturing and HSBC to defensive stocks including Power Grid Corporation of India. This balances the portfolio nicely and provides a more stable return across the economic cycle.
Euro star
The European Assets Trust (LSE:EAT) has a more continental flavour than Henderson Far East Income. Some 70% of its funds are wrapped up in eurozone nations, with non-euro-trading European nations accounting for almost all the rest.
Again, this narrow regional strategy carries higher risk. But that’s not all — as with those other trusts we’ve discussed, more than 90% is allocated to shares in cyclical and sensitive industries. This can leave it vulnerable during economic downturns, as illustrated by recent dividend cuts.
The good news though, is that this allocation means each of the trusts can outperform when conditions improve. In this case, major holdings include building materials supplier Heidelberg Materials and Bank of Ireland.
European Assets Trust carries a robust 5.9% dividend yield for 2025. Despite its recent problems, I think it’s worth serious consideration.
Closer to home
The Chelverton UK Dividend Trust (LSE:SDV) has raised yearly dividends reliably since the early 2010s. For 2025, it carries a Footsie-busting 8.4%.
You’ll see this is another investment trust focused on a specific region. In this case, its success is highly geared to Britain’s economy which — if many forecasters are correct — could experience prolonged growth issues. Some 92% of it is tied up in UK-listed shares, which may be a problem.
Yet Chelverton’s ability to overcome similar issues over the last decade and deliver healthy regular growth is a good omen. Since 2020, annual payouts have grown at a decent yearly rate of 6.3%.
The trust holds shares in 66 companies in total spanning multiple sectors. These are as diverse as financial services, consumer goods, energy and telecoms, providing excellent balance.
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HSBC Holdings is an advertising partner of Motley Fool Money. Royston Wild has positions in HSBC Holdings. The Motley Fool UK has recommended HSBC Holdings, Taiwan Semiconductor Manufacturing, and Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
