A subscriber wrote to me a couple of weeks ago asking my thoughts on Macquarie Infrastructure Co. Trust (MIC) as a potential dividend opportunity. Just days before I received this email, I was personally looking for a fund or REIT that invests in parking lots (especially in San Francisco) and was not very successful in my search. MIC caught my interest not only because it invests in parking structures but because it is the oldest and largest fund of Australia’s Macquarie Bank. A recent article in Fortune magazine titled Would you buy a bridge from this man? by Bethany McLean discusses Macquarie Bank and its infrastructure funds like MIC in great detail.
If the hedge fund manager in the article, Jim Chanos, is to be believed, some of their funds are set up like Ponzi schemes. I would personally stay away from MIC if there is even an iota of truth in that allegation. I can see why MIC caught this subscriber’s fancy as it pays a 6% dividend yield and has appreciated almost 40% over the last year. In a period of market volatility and pullbacks like the 366 point drop in the Dow we experienced on Friday, stocks and funds with high yields are indeed attractive. As an alternative to MIC, given below are a few potential investments that yield roughly 6%,