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The 8 investment trusts that have raised their dividend for more than 50 years

08 March 2023

The Association of Investment Companies reveals the ‘dividend heroes’ that have upped their pay outs for at least half a century.

By Jean-Baptiste Andrieux,

Reporter, Trustnet

Eight investment trusts have been able to increase their annual dividends for half a century or more, according to The Association of Investment Companies (AIC), with one new entrant to the list in 2023.

‘Dividend heroes’ are investment companies that have consistently increased their annual dividends for at least 20 years in a row. Out of the 18 to achieve the feat, almost half have done so over half a decade or more.

Among these portfolios, four invest in the global sector while two are part of the UK Equity Income sector. The two remaining trusts are part of the Global Smaller Companies and Flexible Investment sectors.

Annabel Brodie-Smith, communications director of the AIC, said that the strength of trusts is their ability to reserve income when times are good and pay out in leaner years. This provides investors with smoother and more consistent dividends.

Last year there were seven to achieve rising dividends in 50 or more years, with JP Morgan Claverhouse adding its name to the list in 2023.

In addition, five dividend heroes have increased their pay outs each year for between 40 and 49 years, while a further five have achieved the same feat for between 20 and 39 years.

Source: The Association of Investment Companies

Inflation has been on the rise since mid-2021, reaching double-digit figures after the beginning of the war in Ukraine in February 2022.

Given this economic climate, Craig Baker, manager of Alliance Trust, suggested investors should avoid relying on incomes from bonds or savings accounts.

He said: “In a high inflation is environment, income from stocks preferable to income from bonds or savings accounts. The former tends to pay a set rate of interest, and savings income rarely beats inflation.

William Meadon, manager of JPMorgan Claverhouse, had an optimistic outlook for UK equities, noting that large-caps have improved in recent months with the FTSE100 reaching an all-time high.

He said: “Many UK companies are enjoying strong cashflows and are often passing these back to shareholders through either higher dividends or share buybacks.

“We think the outlook for traditional high dividend payers such as banks, energy companies and miners looks particularly encouraging despite this new era of higher interest rates.”

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