Merchants Trust
This £439.2m trust is yielding 5.6 per cent – the second-highest figure among UK Growth & Income trusts. Despite this healthy figure it is on a 3.3 per cent discount, according to AIC figures.
Iain Scouller, head of investment companies research at Oriel Securities, said: "The focus is on FTSE 100 companies and the trust is normally quite highly leveraged – this was equivalent to 22 per cent of NAV at 31 December 2012."
"The leverage has resulted in Merchants outperforming the FTSE 100 index benchmark total return over the past three and six months and one year."
Performance of trust vs index over 1yr
Source: FE Analytics
Data from FE Analytics shows the outperformance has been modest – a 15.52 per cent return over one year compared with 11.83 per cent from the index – and has come entirely in the last month.
However, with the yield on the FTSE All Share at 3.5 per cent, the 5.6 per cent this trust offers should be enough to pique income investors' interest.
The total expense ratio (TER) of the trust is 0.64 per cent. It is run by Simon Gergel (pictured).
Dunedin Income Growth Trust
Scouller also highlights this £385m trust, which is run by Aberdeen and is currently yielding 4.2 per cent.
The trust has been run by Jeremy Whitley since November 2009, and data from FE Analytics shows it has performed strongly since then.
Over the past three years it has made 60.92 per cent on a total return basis while its FTSE All Share benchmark has made 36.01 per cent.
Performance of trust vs index over 3yrs
Source: FE Analytics
The trust has a net gearing of 10 per cent and is sitting close to NAV, at a 0.2 per cent discount. The TER is 0.65 per cent.
Edinburgh Investment Trust
Neil Woodford’s £1bn investment trust is yielding 4.1 per cent, more than the 3.49 per cent of his Invesco Perpetual High Income fund.
Scouller said: "The defensive bias in the portfolio has not been particularly helpful to relative performance over the last few months, but has worked well over the past three years."
Performance of trust vs sector and benchmark over 3yrs
Source: FE Analytics
Data from FE Analytics shows that the trust has made 59.9 per cent over three years, while the FTSE All Share has made 36.01 per cent.
The trust is 19 per cent geared and is sitting on a 0.9 per cent premium. The TER is 0.72 per cent.
European Assets Trust
For exposure outside the UK, Scouller highlights the £126m European Assets IT, run by Sam Cosh and David Moss at F&C.
The trust is yielding 5.5 per cent; Scouller explained how they maintain this high rate: "The board resets the rate of dividend annually and this is partly financed by paying out capital."
"This method of generating yield may become more widespread following recent rule changes, which allow 'capital-dividends'."
Recent changes to the regulations allow trusts to use their capital reserves for dividend payouts, previously forbidden.
The trust has five FE Crowns after three years in which it has returned more than the four other European Smaller Companies trusts.
The trust has made 72.91 per cent over the past three years while the HSBC Smaller Europe ex UK benchmark has made just 20.31 per cent.
It has been a big beneficiary of the recent upturn in the markets, having made 31.27 per cent over three months while the benchmark has risen 26.64 per cent.
The TER is 1.64 per cent.
Henderson Far East
The £363.3m Henderson Far East trust is currently yielding 4.6 per cent, the best figure of any of the Asia Pacific ex Japan equity trusts, according to the AIC.
The trust has 17 per cent in China and the same amount in Australia, the latter often a key source of income for Asian income funds.
It also has a high weighting to Taiwan and Singapore.
It is on a slight discount of 0.2 per cent, with a low gearing of just 4 per cent.
Over the past three months it has been one of the best-performing trusts in the rising market, making 19.53 per cent while the Asia Pacific ex Japan sector has made 15.52 per cent.
However, over three years it has underperformed, making 39.25 per cent while the sector has risen 51.74 per cent, according to data from FE Analytics.
The TER is 1.67 per cent.