High Yield Investment Trusts

At this recent AJBell virtual event, Rhys Davies provides a balanced understanding of the current opportunities and risks in the high yield bond market, including:

  • High yield bonds – what they can offer the investor and where that can sit in a portfolio
  • The market today and what it looks like in a Covid-19 world
  • An overview of the two investment trusts he manages – City Merchants High Yield Trust Limited and Invesco Enhanced Income Limited

Investment risks

  • The value of investments and any income will fluctuate (this may partly  be the result of exchange rate fluctuations) and investors may not get back the full amount invested.

    The Invesco Enhanced Income Limited and City Merchants High Yield Trust Limited have a significant proportion of high-yielding bonds,  which are of lower credit quality and may result in large fluctuations  in the NAV of the product.

    The Invesco Enhanced Income Limited and City Merchants High Yield Trust Limited use derivatives for efficient portfolio management which may result in increased volatility in the NAV.

    The use of borrowings may increase the volatility of the NAV and may reduce returns when asset values fall in the Invesco Enhanced Income Limited and City Merchants High Yield Trust Limited.

    The Invesco Enhanced Income Limited and City Merchants High Yield Trust Limited may invest in contingent convertible bonds which may result in significant risk of capital loss based on certain trigger events.

    When making an investment in an investment company you are buying shares in a company that is listed on a stock exchange. The price of the shares will be determined by supply and demand. Consequently, the share price of an investment company may be higher or lower than the underlying net asset value of the investments in its portfolio and there can be no certainty that there will be liquidity in the shares.

    As a result of COVID-19, markets have seen a noticeable increase in volatility as well as, in some cases, lower liquidity levels; this may continue and may increase these risks in the future.

Important information

  • This document is marketing material and is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell securities.

    Past performance is not a guide to future returns. Data as at 30.04.2020, unless otherwise stated.

    Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice.

    If investors are unsure if this product is suitable for them, they should  seek advice from a financial adviser. For details of your nearest financial adviser, please contact IFA Promotion at

    For more information on our products, please refer to the relevant Key Information Document (KID), Alternative Investment Fund Managers Directive document (AIFMD), and the latest Annual or Half-Yearly Financial Reports. This information is available using the contact details shown.