Investment income gem

Some people have asked me where do i find my income stocks.

Well quite often i just come across them by chance whilst checking on the performance of my portfolio. The next share is a classic case. I was looking at one of my favourite share information sites www.digitallook.com when i noticed the name of a company. The Small Company Dividend Trust. As someone who is always seeking new income generating opportunities I immediately thought this share was worth further investigation; particularly as one of the shareholders had just shelled out near £30,000 on over doubling his stake.

The company which invests in shares in high yielding shares on the UK market has the following investment policy

The Company's funds will be invested principally in companies with a market capitalisation of up to £500 million; a maximum of 20 per cent. of the Company's portfolio may be invested in companies without reference to their market capitalisation at the discretion of the Investment Manager. The Company's portfolio will comprise companies listed on the Official List and companies admitted to trading on AIM. The Company will not invest in preference shares, loan stock or notes, convertible securities or fixed interest securities or any similar securities convertible into shares. The Company will not invest in other investment trusts or unquoted companies.

It is currently trading close to its year low at 163.75p and well short of its high of 241p. The company is small with a market cap of just over £26 million. However, its big attraction is its' yield. The company pays quarterly dividends which are projected to total 13.85p for the forthcoming year putting it on a income yield of almost 8.5%.

If income monkeys do decide to take the plunge, they will be some fairly distinguished company. One of the directors is no less than the former Chancellor of the Exchequer Norman now Lord Lamont of Lerwick who has taken the opportunity of the slump in the price to top up on his holding.

INCOME MONKEY VERDICT
For those income monkeys that want exposure to the UK stockmarket without the risks inherrent with investing in a single share or stock, this trust is an ideal way of benefiting from rising valuations whilst taking a tidy income into the bargain.