Latest figures from the Association of Investment Companies (AIC) suggest that consistent, reliable dividends continue to be a relevant strategy for a significant proportion of the investment company sector. Some 16 investment companies have been consistently raising their dividends each year for over 20 years – and a number of these have even broken the 40 year mark. These are City of London Investment Trust (44 years), Alliance Trust (43 years), Bankers Investment Trust (43 years), Caledonia Investments (43 years), Albany Investment Trust (41 years), F&C Global Smaller Companies (40 years) and Foreign & Colonial Investment Trust (40 years).
An impressive 28% of the UK Growth & Income sector have raised their dividends each year for over 20 years, and a staggering 67% have achieved this in each of the last 10 years. A further 26% of the Global Growth sector have raised their dividends each year for over 20 years, and 29% have achieved this for each of the last 10 years. In the UK Growth sector, 20% of companies have raised dividends for each of the last 10 years. To view investment companies which have raised their dividends for each of the last 10 years, please see notes to editors.
Annabel Brodie-Smith, Communications Director, Association of Investment Companies (AIC) said: “Dividends have always been an important component of equity investing, and are likely to become increasingly so in the current inflationary environment. The investment company sector has an unrivalled track record when it comes to raising, or maintaining dividends. This is because they can retain up to 15% of the income they receive each year and transfer this to their reserves. This allows investment companies to build up their revenue reserves during the good years which allows them to pay dividends in difficult years. Known as ‘smoothing’ dividends, this is one of the defining characteristics of the sector.”
Source : Association of Consulting Actuaries Press Release
