27 March 2015

Investment Trust "dividend heroes"

Investment Trusts are one of the types of investment fund which I recommend when appropriate for clients. (Other types include Unit Trusts, OEICs, and Exchange Traded Funds). They are the oldest type of fund investment, many having started in the 19th century.

The Association of Investment Companies has put together a list of "dividend heroes" which are investment trusts which have increased their dividends for at least 20 years. The investment trust structure gives the managers the ability to "smooth" the return of dividends, holding back a bit in the good years to make up the  gap in the not so good years.

There are 16 investment trusts on the list, while more than half of that list have increased their dividends every year for more than 40 years. The most "heroic" are Bankers Investment Trust, City of London Investment Trust, and Alliance Trust, which have all increased for 48 years. They are a mix of UK and global equity funds.

While taking dividends is only one way of taking an income from an investment it is certainly an impressive achievement.

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