He expands on Ms Brodie-Smith’s point investment trusts now invest in a wider range of asset classes, some of which are fairly niche.
“Areas such as aircraft leasing or commercial property debt which we couldn’t access 10 years ago, there are three or four vehicles each in those asset classes alone in the investment company space that we can now look at which are giving premium yields to that available with bonds,” he notes.
“They are less correlated asset classes and so not just from the ability to keep revenue back on the equity side, being able to access different asset classes which are suited to the closed-ended structure as opposed to open-ended funds is also really attractive to people who are retired or looking to live off income.”
Data from the AIC shows there is a pipeline of investment trusts waiting to join the dividend heroes, building up strong track records of dividend payouts.
Figure 2: Next generation dividend heroes
| Company | Sector | Number of consecutive years’ dividend increased |
| Invesco Income Growth | UK Equity Income | 19 |
| Perpetual Income & Growth | UK Equity Income | 17 |
| Standard Life Equity Income | UK Equity Income | 16 |
| TR European Growth | European Smaller Companies | 14 |
| Athelney | UK Smaller Companies | 14 |
| BlackRock Throgmorton Trust | UK Smaller Companies | 13 |
| BlackRock Smaller Companies | UK Smaller Companies | 13 |
| Establishment Investment Trust | Global | 13 |
| Henderson Smaller Companies | UK Smaller Companies | 13 |
| Artemis Alpha Trust | UK All Companies | 12 |
| Aberdeen New Dawn | Asia Pacific – Excluding Japan | 12 |
| Witan Pacific | Asia Pacific – Including Japan | 12 |
| Henderson EuroTrust | Europe | 12 |
| Murray International | Global Equity Income | 12 |
| Edinburgh Investment | UK Equity Income | 11 |
| BlackRock Greater Europe | Europe | 11 |
| Schroder Oriental Income | Asia Pacific – Excluding Japan | 10 |
| Henderson European Focus | Europe | 10 |
Source: AIC using Morningstar
These are the trusts which have increased their dividends for 10 years or more but less than 20 years, with two new additions this year already – Henderson European Focus Trust and Schroder Oriental Income.
With inflation having hit 2.3 per cent in February, where it remained in March, the prospect of growing dividends will be a welcome one for many investors and savers.
Ms Brodie-Smith adds: “It’s encouraging in this time of rising inflation that 12 per cent of the investment company sector have increased their dividend every year for 10 years or longer.
“There are a healthy number of next generation dividend heroes waiting in the wings, which have increased their dividends each year for between 10 and 20 years.”
eleanor.duncan@ft.com
