Investors today have hundreds of such financial vehicles to choose from depending on their investment style and objectives. So they don’t need to diversify across a basket of assets without having to sacrifice their broader investing strategy, either.

With this in mind, here are three top trusts and funds to consider.

The property trust

Real estate investment trusts (REITs) like The PRS REIT (LSE:PRSR) are renowned as stable and generous income shares. This company — which specialises in the ultra-stable residential rentals sector — offers even more safety, as accommodation demand remains steady at all points of the economic cycle.

Under REIT rules, it must pay at least 90% of annual earnings from its rental operations out in dividends. For this financial year (to June 2026) its dividend yield is a FTSE 100-beating 4.4%.

PRS REIT’s share price could dip again if interest rates fail to drop as significantly as the market hopes. Higher rates depress property stocks’ net asset values (NAV) among other things, hitting earnings.

But given steadily rising rents, I’m confident it will remain an attractive long-term dividend stock.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

A UK shares trust

Investors looking for larger yields might want to consider Chelverton UK Dividend Trust (LSE:SDV), too. Its forward dividend yield is an impressive 9.4%.

The downside is that this investment trust is focused on small-to-mid-sized British companies. This is a potential issue as — unlike blue chips with stronger balance sheets — their dividends can be more volatile during economic and industry downturns.

That said, Chelverton’s investment in a broad range of businesses helps to spread this risk. Today it has holdings in 66 companies including insurer Chesnara, building materials retailer Wickes, and antenna manufacturer MTI Wireless Edge.

This has enabled the trust to raise annual dividends for 14 years on the bounce.

An alternative ETF

The Invesco US High Yield Fallen Angels ETF (LSE:FAHY) doesn’t invest in the stock market. This means its price performance isn’t subject to the same volatility that often befalls equities.

Instead, this trust holds corporate bonds that have been downgraded to below-investment-grade status. It’s a strategy that leaves it more exposed to default risks. However, this also gives the opportunity to achieve higher returns through better dividend yields.

For 2025, the dividend yield here is a chunky 6.7%.

This Invesco fund also aims to reduce potential default risk on overall returns by holding a wide selection of bonds. Today, this stands at 70. In addition, no single holding constitutes more than 3.76% of the total portfolio.

Some of the bonds it holds are from healthcare provider CVS Health, media company Paramount Global, and aluminium business Alcoa Nederland.

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Investing in an exchange-traded fund (ETF) can greatly reduce the impact of such eventualities on an individual’s overall returns. By holding a wide variety of dividend-paying shares, these funds spread risk and can offer a more consistent dividend even if some companies held in the fund falter.

With this in mind, here are three great dividend-focused ETFs to consider today. As you can see, their forward dividend yields beat the FTSE 100 average of 3.7% by a comfortable margin.

Continental colossus

The WisdomTree Europe Equity Income UCITS ETF (LSE:EEI) holds shares in 255 businesses in the UK and on Mainland Europe. For this financial year its dividend yield is a meaty 6.6%.

This high yield can be explained partly by the large proportion (around 21% of the total fund) of British shares that it holds. Largely speaking, companies on these shores have a stronger culture of paying large and growing dividends than their continental counterparts.

Less than a third of its capital is tied up in its 10 largest holdings (which include banking giant HSBC, utilities operator Enel, and energy producer TotalEnergies), and its exposure extends across a wide variety of sectors.

Returns may disappoint in the event of a eurozone-wide slowdown. But on balance, I think it’s a well diversified ETF to consider.

Dividend angel

The Invesco US High Yield Fallen Angels ETF (LSE:FAHY) doesn’t invest in equities. Instead, it focuses on corporate bonds that are below investment-grade status.

More specifically, it’s designed to track “the performance of ‘fallen angels’ — bonds which were previously rated investment-grade, but were subsequently downgraded to high-yield“.

Some 97.5% of its portfolio is dedicated to instruments with an investment rating of BB or below. This creates greater danger for investors, but it also results in a sky-high dividend yield. The forward dividend yield here is a robust 7%.

Some of the ETF’s largest holdings include bonds from healthcare provider CVS Health, aluminium producer Alcoa, and chemicals manufacturer OCI Global. In total, its portfolio comprises 74 different holdings, providing investor returns with protection against one or two possible defaults.

World beater

As its name implies, the iShares World Equity High Income UCITS ETF (LSE:WINC) is loaded with yield-rich companies from across the globe. Consequently, its forward dividend yield is an enormous 9.1%, putting it in the top seven highest-yielding ETFs currently available in the UK.

In total, the product holds shares in 328 different businesses from across the globe. This broad geographic footprint can help it absorb localised problems better than funds that are focused on certain regions.

What’s more, this iShares ETF holds non-equity assets like US government-backed securities and cash. It’s a strategy that provides even greater stability over time.

It’s also worth noting the fund’s high exposure to technology shares like Microsoft, Nvidia, and Meta. While such shares can be more volatile across the economic cycle, they also have significant growth potential.

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The ETF

The Invesco US High Yield Fallen Angels ETF (LSE:FAHY) doesn’t, unlike most London-listed funds, invest in local or global equities. Instead, its portfolio’s loaded with below-investment-grade bonds.

Today, more than 97% of the fund’s tied up in debt instruments with ratings of BB or B. Some of the corporate bonds it holds are from medical specialist CVS Health, clothing manufacturer VF Corp and media giant Paramount Global.

Why’s this important? A focus on riskier bonds obviously comes with a higher level of risk. But the higher yields these bonds subsequently offer also mean the fund’s dividend yields are substantially above the ETF average.

For 2025, this stands at a very healthy 7%. And with 87 different holdings, the fund’s structured to cushion the impact of potential defaults on overall investor returns.

The FTSE 100 share

Now, BAE Systems (LSE:BA.) doesn’t offer up the same sort of eye-popping dividend yields as this. For 2025, its yield is a healthy-if-unspectacular 2.8%.

Yet I believe the defence giant remains a top-tier dividend stock to consider. As the chart shows, the dividend on BAE Systems shares has risen every year for more than a decade. This has allowed investors to offset the impact of rising inflation on their wealth.

BAE Systems’ progressive dividend policy is thanks to its impressive cash flows and the dependable nature of defence spending. Even during economic downturns, the Footsie firm can expect new orders for its equipment to keep rolling in (its order book was a record £74.1bn as of last summer).

Past performance isn’t always a reliable guide of future returns however. In the case of BAE Systems, a range of problems, from supply chain issues and rising costs to disappointing project execution, could impact future earnings and dividends.

But, on balance, I’m optimistic the blue-chip weapons builder will remain an impressive passive income share.

The FTSE 250 stock

As a real estate investment trust (REIT), Urban Logistics (LSE:SHED) is set up to provide a steady flow of dividends.

Under sector rules, companies of this type must pay a minimum of 90% of annual rental profits out to shareholders. That’s in exchange for the favourable tax environment they enjoy.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

This doesn’t necessarily guarantee a large and stable income over time. The trust’s weighty exposure to cyclical sectors (like parcel services and retail) could leave earnings, and therefore dividends, vulnerable during economic downturns. Higher interest rates also have an impact on profits.

But on balance, I think Urban Logistics is pretty rock solid for dividend income. Like the aforementioned ETF, it’s well diversified to limit the risk of tenant defaults on overall returns (its top 10 tenants account for just 32% of total rents).

On top of this, Urban Logistics has long-term contracts in place to limit the threat of falling occupancy. As of September, its weighted average unexpired lease term (WAULT) was 7.6 years.

For this financial year (ending March), the dividend yield on Urban Logistics shares is 7.5%. This nudges higher to 7.6% for next year.

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Here are two I’m considering today:

The dividend yields on these stocks sail past the FTSE 100 average of 3.5%. And a large sum spread equally across both could help me spread risk and achieve a huge second income.

To give you a taste, a £10,000 investment would give me dividends of £790 in 2025 alone, based on current forecasts.

I’m optimistic, too, that they can provide healthy dividend income long beyond next year. Here’s why I’m considering buying them when I next have cash to invest.

Invesco US High Yield Fallen Angels ETF

My first selection is an exchange-traded fund (ETF). By holding a collection of different assets, these instruments can help me spread risk while I also hunt for a high yield.

The Invesco US High Yield Fallen Angels ETF doesn’t eliminate danger entirely. In fact, its focus on below-investment-grade bonds leaves me more exposed to credit risk than many other debt-based funds. Just 4% of it is invested in bonds with a BBB- rating or above.

However, with 82 different holdings, it provides me with diversification across multiple issuers and industries, reducing the impact of any single bond default on my overall portfolio.

Major holdings here include bonds in data storage provider Western Digital, broadcaster Paramount Global and bank Western Alliance.

With a 7% dividend yield, I think this ETF’s risk-reward profile is very attractive. And with quarterly distributions, it could offer a regular income stream for me to reinvest.

Triple Point Social Housing REIT

The second high yield share I’m considering is a real estate investment trust (REIT). In exchange for certain tax perks, trusts like Triple Point Social Housing REIT has to pay at least 90% of rental profits out in dividends each year.

This doesn’t guarantee that it will provide a bigger dividends than non-REITs or other UK shares. Earnings and therefore dividends can lag if, for example, higher interest rates depress net asset values (NAVs).

However, the 90% rule means REITs are legally mandated to return at least some of their earnings, unlike most other income-bearing securities. Thus investors can still enjoy some peace of mind.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

I like Triple Point because it focuses on the specialised supported housing (SSH). This part of the housing market is not as sensitive to broader economic conditions. And so rents (and therefore dividends) tend to remain stable from year to year.

What’s more, specialised housing providers like this have significant growth potential as population changes drive a demand boom. The Personal Social Services Research Unit thinks SSH demand will jump 30% between now and 2030.

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Here are three such investments on my list today. As you can see, the dividend yields on these London Stock Exchange-listed instruments sail above a forward average of 3.6% for FTSE 100 shares.

Dividends are never guaranteed. But if forecasts are accurate, a £15k investment spread equally across these shares and this ETF would give me a £1,080 passive income in 2025.

I’m confident, too, that dividends will march higher over the time. Here’s why I’d buy them if I had the cash on hand to invest today.

Greencoat UK Wind

Energy producers like Greencoat UK Wind are often considered some of the safest dividend stocks to buy.

Keeping turbines in good working order can be an expensive, earnings-damaging business. But companies like this also enjoy excellent profits visibility thanks to their ultra-defensive operations. This can make them more stable dividend payers than many other UK shares.

Electricity demand remains stable whatever economic, political, or social crisis comes along. And so Greencoat UK Wind, which produces power from 49 sites and sells it onto energy suppliers, enjoys a steady flow of income it can pay to its shareholders.

While dividends are never guaranteed, Greencoat’s vow to pay “an attractive and sustainable dividend that increases in line with RPI” has been in effect since its IPO a decade ago.

In fact, dividends in 2023 rose almost 30% year on year, soaring past retail price inflation (RPI) of 13.4%. Greencoat is able to keep this record up as the majority of its contracts are linked to either RPI or consumer price inflation (CPI).

Given the bright outlook for renewable energy demand, I think Greencoat UK could be a top dividend payer for years.

Invesco US High Yield Fallen Angels ETF

The Invesco US High Yield Fallen Angels ETF provides a way for investors to profit from the bond market. More specifically, it aims to measure “the performance of ‘Fallen Angels,’ bonds that were previously rated investment grade and were subsequently downgraded to high yield bonds”.

Around 85% of credit ratings on its corporate bonds are rated BB, with the remainder at B.

While ratings go much lower, these sub-investment-grade securities mean that investors are still exposed to a higher level of credit risk than other bond-holding funds. A downgraded rating is a sign of problems with the bond issuer’s underlying financial health.

However, with this greater risk comes the potential for greater reward. And in this case the dividend yield is a whisker away from 7%.

What’s more, the fund has an ongoing annual charge of 0.45%, which provides solid value. It’s another way I’d consider targeting a huge passive income next year.

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