Double -digit dividend performance is a occasional thing. It can also be a red flag for investors, although in some cases high performance shares carry dividends in a long term. Several FTSE 250 Actions now offer north of 10%.

For example, Bluefield Solar Income Fund (LSE: BSiF) gives 10.2%. Meanwhile, Foresight Solar Fund (LSE: FSFL) gives 10.1%.

Are I missing that I don’t have any sun fund shares?

Taking a long -term approach

The brief -term answer is: yes, I am.

Having a share of 10%+ profitability helps enhance my passive income streams. I have at least one, but not expected solar fund.

Over the past few years, Foresight has increased the dividend to action annually. Dividend pays quarterly. From the perspective of passive income, this can be attractive compared to rarer payments.

But although I lack dividends, what about the enhance in capital?

Here the photo is less attractive. The price of Foresight Solar Fund has dropped over the past five years 25%.

Accidentally, the action currently sells 25% less than the value of net assets.

Some red flags

Take care, however.

Why would the action sell less than the net assets for a quarter?

After all, shareholders could simply vote for the company’s development, selling assets and recovering much more money than their shares are now worth it.

Theoretically, they could. In practice, however, things are more complicated.

An attempt to implement the company’s assets is extremely complex. Who is to say that if Foresight Solar Fund tries to implement cash by selling its assets, he would be able to get a quote at which they are transferred in the balance sheet?

This 25% discount is for me a red flag, along with a long -term decrease in stock price despite the constant enhance in dividend. Apparently, some investors look beyond the juicy dividend profitability at the fund’s long -term perspectives.

The sector is mature to change

Managing the Foresight Sunny Income Fund is aware of this.

He also deals with possible explanations why solar funds, such as they themselves trade below their net assets. He also raised the perspective of mergers and acquisitions in the sector.

This can potentially assist unlock a certain value in the sector.

On the other hand, this can be bad news. After all, Lowball takes off offers can potentially destroy the value for many shareholders – something I am currently experiencing with my investment Three.

I don’t like uncertainty

The Foresight Solar Income Fund fund has been constantly putting its own actions lately. Doing this much below the net assets should assist create values ​​for shareholders.

The greater question is whether solar income funds, such as those run by Bluefield and Foresight, have a real long -term business model. Variable energy prices and changing weather patterns are a risk for both.

After establishing Foresight Solar Income Fund, which is to report its ephemeral results on Thursday (September 18), we should hear the current thinking of the management about the perspectives of the sector.

But I do not like the assessment of questions over the business model implied with huge discounts to the net assets of both these FTSE 250 shares (Bluefield Solar income with a 26%discount). I will not invest in them.