18 investment trusts for income investors

The Association of Investment Companies’ Dividend Heroes list highlights 18 trusts that have increased their dividends over the last 20 years, eight of which have done so for half a century

Here at MoneyWeek, we’ve long been fans of buying investment trusts for income (and just buying investment trusts in general). 

Investment companies make for an attractive investment in inflationary times. Their ability to store up to 15% of the income they receive each year allows them to build up a rainy fund that they can use to pay dividends even during turbulent times. 

In fact, there are 18 trusts that have increased their dividend over the last 20 years or more. 

Eight of these have increased their dividends for over half a century, navigating the peaks and troughs of the market during this time

“It’s remarkable that there are now eight dividend heroes with at least half a century of consecutive annual dividend increases,” says Annabel Brodie-Smith, communications director of the Association of Investment Companies (AIC).

“These dividend heroes are no strangers to difficult times, having raised their payouts to investors through the high inflation of the 1970s, recession of the 1990s and the global financial crisis in 2008,” says Brodie-Smith. “While dividends are never guaranteed, these are track records to be proud of.”

Dividend heroes

City of London Investment Trust, Bankers, and Alliance Trust have increased their dividends over the last 56 years, holding the record for the longest period of dividend increases. 

They’re followed by Caledonia Investments, which has increased its dividend for 55 years, The Global Smaller Companies Trust, 52 years, and F&C Investment Trust and Brunner, both of which have increased their dividends for the last 51 years in a row. 

JP Morgan Claverhouse joined the list this year, announcing its 50th year of consecutive dividend increases on 31 January. 

Investment Company

Sector

Number of consecutive years dividend increased

Dividend yield (%)

5-year annualised dividend growth rate (%)

City of London

UK Equity Income

56

4.65

3.25

Bankers

Global

56

2.24

4.59

Alliance Trust

Global

56

2.38

12.77

Caledonia Investments

Flexible Investment

55

1.82

3.64

The Global Smaller Companies Trust

Global Smaller Companies

52

1.21

8.48

F&C Investment Trust

Global

51

1.40

5.38

Brunner

Global

51

1.97

5.44

JPMorgan Claverhouse

UK Equity Income

50

4.71

4.88

Murray Income

UK Equity Income

49

4.15

1.91

Scottish American

Global Equity Income

49

2.69

4.48

Witan

Global

48

2.52

6.67

Merchants Trust

UK Equity Income

40

4.57

2.44

Scottish Mortgage

Global

40

0.50

3.66

Value and Indexed Property Income

Property – UK Commercial

35

5.81

2.75

CT UK Capital & Income

UK Equity Income

29

3.73

1.99

Schroder Income Growth

UK Equity Income

27

4.16

3.34

abrdn Equity Income

UK Equity Income

22

6.40

5.83

Athelney Trust

UK Smaller Companies

20

4.68

1.53

Source: AIC & Morningstar 

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