If you’re looking for a reliable source of dividend yields to add to your portfolio then an investment trust could be well worth considering.
Investment trusts have been among the most popular funds for investors for decades, and some of the longest-lived have stood the test of time largely thanks to their ability to offer a reliable dividend yield to investors.
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“This means they can smooth dividends over time which helps investment trusts maintain long track records of reliable dividends,” adds Brodie-Smith.
Other types of investment fund don’t have this ability, which enables some investment trusts to keep increasing their dividend yield, year after year.
“Investment trusts can also pay some of their capital returns as a dividend which can boost their yields,” says Brodie-Smith.
Additionally, they can borrow money to make larger investments, known as ‘gearing’.
“Gearing can boost performance including dividends if performance is strong but can act as a drag if it’s poor,” says Brodie-Smith.
The highest-yielding investment trusts right now
According to research from wealth manager Stifel, these are the 11 highest-yielding investment trusts as of 18 August 2025.
|
Investment trust |
Dividend yield (%) |
Discount/premium (%) |
|
Henderson Far East Income |
10.8 |
3 |
|
Aberdeen Asian Income* |
7.1 |
-10 |
|
Montanaro UK Smaller Companies* |
6.4 |
-11 |
|
Aberdeen Equity Income |
6.2 |
0 |
|
European Assets* |
6.0 |
-8 |
|
Henderson High Income |
5.9 |
-7 |
|
Merchants |
5.3 |
-7 |
|
JPMorgan Asian Growth & Income* |
5.2 |
-9 |
|
Shires Income |
5.1 |
-4 |
|
Schroder Income Growth |
5.1 |
-7 |
|
BlackRock American Income* |
5.1 |
-5 |
Source: Stifel via the AIC
Trusts marked with an asterisk in the table above pay out a fixed amount of their net asset value (NAV) in the form of dividends every year.
“Typically, they pay out around 4% to 6% of NAV and at times when NAVs fall, the dividends will automatically be cut,” said Iain Scouller, managing director, investment funds at Stifel, and William Crighton, vice president, investment funds equity research at Stifel, who authored the research.
The highest-yielding investment trusts have an overseas focus, especially to Asian and US stock markets.
“There are also a number of stalwart UK equity income trusts appearing on the list including City of London [which is 23rd on the list], Merchants and abrdn Equity Income,” note Scouller and Crighton.
What is a dividend yield?
When we talk about an investment trust’s (or any stock’s) dividend yield, this refers to the amount that it pays in annual dividends per share expressed as a percentage of the share price.
As such, a high dividend yield tends to indicate an asset that pays a larger amount of income to investors relative to the price they pay to own it.
“For those investors prepared to take equity risk, we think the yields on these trusts are relatively attractive,” say Scouller and Crighton of the investment trusts in their report.
But dividend yields are not the only measure that investors should consider before buying an investment trust. Other variables are the management fees incurred, the investment trust’s regional or sectoral focus, the strategy and approach of its management team, and the premium or discount at which it trades.
Because investment trusts are closed-ended funds, their shares trade at prices that don’t necessarily match the value of their assets (net asset value or ‘NAV’). Investment trusts whose market capitalisation (market cap) is greater than their NAV are said to trade at a premium (positive in the third column of the table above) while those whose market cap is less than their NAV are described as trading at a discount (negative in the table).
