Investors in The Diverse Income Trust (LON:DIVI) face an important decision as the board proposes giving shareholders the option to roll into the Premier Miton UK Multicap Income Fund. In this interview, fund manager Gervais Williams explains the trust’s long record of income growth, why persistent discounts and redemptions have forced a rethink, and why a multi-cap income strategy could be particularly powerful as undervalued UK smaller companies move into a potential catch-up phase.
Key moments
00:11 – Introduction
Gervais Williams, Fund Manager at Premier Miton Investors, joins Giles to discuss the future options for shareholders in The Diverse Income Trust.
00:28 – Long-term performance and dividend resilience
Williams outlines the trust’s history since launch in 2011, highlighting strong NAV growth and a dividend that continued rising even through the widespread UK dividend cuts of 2020.
01:31 – Why changes are being proposed
He explains how investor flows away from UK equities have led to persistent redemptions and a widening discount to NAV, increasing costs for remaining shareholders.
02:42 – Benefits of rolling into the Premier Miton UK Multicap Income Fund
Williams details how a unitised fund structure removes the discount to NAV and avoids the fixed cost pressures that can impact smaller investment trusts.
03:49 – Why multi-cap investing still matters
Despite recent dominance by mega-caps, Williams argues that broader diversification across company sizes can provide resilience and income growth.
04:20 – Opportunity in undervalued UK smaller companies
He highlights the potential for a catch-up trade as many UK small caps remain deeply undervalued compared with their underlying growth.
05:10 – Income stocks in the next downturn
Companies generating strong cash flow could become opportunistic acquirers during the next recession, potentially accelerating earnings growth and returns.
Premier Miton Investors is a UK asset manager offering a range of actively managed funds and investment trusts. Its strategies span equities, income, fixed income and multi-asset portfolios, with a focus on long-term capital growth and income generation for investors.
