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Passive income investments were popular in 2023. And I reckon it’s likely to be the same story next year. With that in mind, here are three top income investments to consider.
A top investment trust
First up is Murray Income Trust (LSE: MUT). This is an investment trust that aims to provide us with a “high and growing” income along with some capital growth. Managed by abrdn, it mainly invests in UK shares but also has some exposure to international stocks (which can help overall performance).
As I write this, Murray Income Trust has a yield of about 4.5%.
But I’d expect the income distributions to grow over time. Believe it or not, the trust has now registered 50 consecutive annual dividend increases. So, it has a great track record when it comes to income growth.
Over the last five years, this trust has outperformed the UK market. But there have been times in the past where it has underperformed. That’s something to keep in mind.
I like the portfolio though. Currently, the trust owns some legendary stocks including London Stock Exchange Group, RELX, and Microsoft.
A dividend growth fund
Next is the FTF Martin Currie UK Rising Dividends fund. This is a UK equity fund that focuses on stocks that are increasing their dividend payments. It currently offers a yield of a little over 4%.
I like the investment strategy this fund pursues. Generally speaking, companies that increase their dividend payouts tend to be good long-term investments as their share prices often rise as their dividends are increased.
I also like the holdings. Currently, Unilever, Diageo, and Reckitt are some of the top holdings in the fund. These are all rock-solid companies with excellent dividend track records.
One downside to this product is that it only owns UK stocks. So there is some geographic risk here.
Overall though, I think it has potential for 2024. Fees are quite low at 0.53% per year through Hargreaves Lansdown.
A renewable energy income play
Finally, we have Renewables Infrastructure Group (LSE: TRIG). This is an investment company that owns a broad portfolio of renewable energy assets (wind and solar farms, etc) across the UK and Europe. Its aim is to provide steady, sustainable returns to investors through dividends.
For 2024, City analysts expect a dividend payout of approximately 7.4p per share here. This means that the yield is near 7% at the moment.
Of course, analysts’ forecasts are not always accurate. But this company has a good track record when it comes to dividends. So, I’d expect the payout in 2024 to be attractive.
It’s worth pointing out that this income investment is riskier than the other two. That’s because the other two products are far more diversified.
Here, there is much more stock-specific risk. For example, poor weather conditions could result in lower cash flows and send the share price down.
Given the huge global shift to renewable energy, however, I think the stock is worth a closer look as we head into 2024.
