Investors in London Stock Exchange-listed funds enjoyed solid returns for years but as the global airline industry is pummeled by coronavirus, some of those investors are looking for the exits

So-called specialty aircraft-leasing funds have generated steady income for investors, but many are now bailing as dividend payments are suspended.

LONDON—The coronavirus pandemic has upended the airline industry, halting travel and grounding planes. Now, the sector’s pain is spreading to a little-known corner of the market where investors have enjoyed heady returns for years.

So-called specialty aircraft-leasing funds have generated income for investors hungry for yield. These funds buy jets from the likes of Boeing Co. BA 5.36% and Airbus SE and lease them to global air carriers such as Thai Airways International THAI 14.67% PCL and Emirates Airline.

In recent weeks, many of those investors have fled or incurred big paper losses as some London Stock Exchange -listed funds suspended dividend payments and held discussions with lenders to renegotiate payment schedules.

Two of the five LSE-listed aircraft funds have suspended dividend payments and share prices are down between 42% and 74% since mid-February.

Excerpt from WSJ
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