Fund of the week: Saints buys into sin

This fund aims to deliver real dividend growth to investors with a diversified set of holdings, including tobacco stocks, commercial property, timber plantations and Brazilian government bonds

The Scottish American Investment Company (LSE: SCAM) is nicknamed Saints. But that doesn't stop manager Patrick Edwardson investing in sin. Of the investment trust's portfolio, 5% is in tobacco. The fund aims to deliver real dividend growth to investors so the sector's reliably high-yielding stocks make the grade.

'Saints', created in 1873, has produced impressive income growth. The dividend rose 64% in the ten years to 2009 the yield is currently 4.34%. Future dividend growth is supported by income reserves of up to 10p a share. However, a steady rise in the dividend hasn't been reflected in the trust's capital value the discount is currently 9.07%.

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