Chris White, who runs the Premier Monthly Income fund, which has a yield of 4.4 per cent, has been buying the shares of Brokerage firm Tullet Prebon, as he feels the shares will have ‘three of four years of very significant earnings growth.’

Tullet Prebon is presently in the middle of a merger with the voice broking business of ICap, and White remarked, ‘the cost savings from that merger when it happens will be very material, and will lead to earnings growth.’

White added, ‘the shares already yield 5 per cent and looked reasonably lowly valued, it is a sort of self-help story, it doesn’t rely on the wider economy.’

Read more: The three FTSE 250 stocks I’m buying for income right now, by manager of £1.3 billion

He has also invested in the shares of GoAhead Group. This is a transport company which owns, amongst other assets, the Southern Rail franchise.

White commented that the company has a dividend yield of 5 per cent, ‘which is covered by the earnings of the bus business it owns, even if the Southern Rail industrial action continues. Industrial disputes have a habit of working themselves out.’ White started to buy the shares when they fell from £23 to £18.

He is also invested in house builders such as Galliford Try, and construction firm Kier Group, as he believes that further government action to stimulate the housing market in the UK is likely in the Autumn Statement.

The Premier Monthly Income fund has returned 77 per cent over the past five years. The largest investments in the fund are Royal Dutch Shell and Imperial Tobacco.

 

SOURCE: What Investment