Investor sentiment towards UK and European markets is strengthening as confidence in US stocks declines, according to a recent Hargreaves Lansdown survey.
The study found that investor confidence in North America dropped 17% in March, with concerns over new US policies. Meanwhile, sentiment towards the UK surged by 16%, and confidence in European markets jumped by 48%.
With renewed interest in UK investment trusts, here are two promising options for investors seeking exposure to local markets.
1. Schroder European Real Estate Investment Trust (SERE)
The Schroder European Real Estate Investment Trust (LSE: SERE) is currently trading at a 35.2% discount to its estimated net asset value (NAV) per share. Recent gains suggest further upside potential, with shares recently priced at 67.8p.
The trust focuses on high-value real estate in key European cities, including Paris and Berlin. These locations benefit from strong infrastructure, economic resilience, and affluent populations, making them attractive long-term investments.
For income-focused investors, this real estate investment trust (REIT) could be particularly appealing. Under REIT regulations, it must distribute at least 90% of its annual rental income as dividends. For the current financial year (ending September), it offers a 7.5% dividend yield.
2. Supermarket Income REIT (SUPR)
Another UK-focused property trust, Supermarket Income REIT (LSE: SUPR), is also trading at a discount, with shares priced at 73.8p—17% below its NAV. Its dividend yield stands at an impressive 8.3%, adding to its attractiveness for value investors.
Despite potential risks such as rising interest rates and the shift towards online retail, Supermarket Income REIT remains a solid investment. It focuses on food retail properties, a sector known for resilience and stable revenue streams.
The trust’s portfolio includes properties leased to major UK supermarket chains like Tesco and Sainsbury’s, ensuring reliable rental income and low vacancy risks. With the UK’s growing population driving food retail demand, this trust could deliver consistent long-term returns.
Should You Invest in UK Investment Trusts Now?
While US markets still offer opportunities, rising confidence in UK and European stocks suggests that local investment trusts could be undervalued.
Both Schroder European Real Estate Investment Trust and Supermarket Income REIT provide discounted entry points and strong dividend yields, making them appealing for investors seeking long-term income and capital growth.
