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.
Many investors have sought to protect their portfolios from the ravaging impact of inflation, which currently stands at 8.7%, with dividend-dealing investment companies gaining a fair degree of attention.
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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 tops the list of dividend heroes, having increased payments continuously for 57 years.
Bankers and Alliance Trust have increased their dividends over the last 56 years.
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.
| Investment Company | Sector | Number of consecutive years dividend increased | Dividend yield (%) |
| City of London | UK Equity Income | 57 | 5.29 |
| Bankers | Global | 56 | 2.39 |
| Alliance Trust | Global | 56 | 2.37 |
| Caledonia Investments | Flexible Investment | 56 | 2.02 |
| The Global Smaller Companies Trust | Global Smaller Companies | 53 | 1.65 |
| F&C Investment Trust | Global | 51 | 1.56 |
| Brunner | Global | 51 | 2.07 |
| JPMorgan Claverhouse | UK Equity Income | 50 | 5.21 |
| Murray Income | UK Equity Income | 49 | 4.39 |
| Scottish American | Global Equity Income | 49 | 2.68 |
| Witan | Global | 48 | 2.57 |
| Merchants Trust | UK Equity Income | 41 | 5.17 |
| Scottish Mortgage | Global | 41 | 0.61 |
| Value and Indexed Property Income | Property – UK Commercial | 36 | 6.65 |
| CT UK Capital & Income | UK Equity Income | 29 | 4.15 |
| Schroder Income Growth | UK Equity Income | 27 | 4.70 |
| abrdn Equity Income | UK Equity Income | 22 | 7.28 |
| Athelney Trust | UK Smaller Companies | 20 | 4.92 |
Source: AIC & Morningstar
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