Investors searching for investment trusts that offer the prospect of consistent dividend growth can choose from an 22-strong list that has been put together by the Association of Investment Companies (AIC).
One of main advantages in an investment trust's armoury over open-ended funds is the dividend reserves, which allows companies to set aside 15% of their annual income for tougher times. Unit trusts or Oeics do not have this luxury, which is why investment trusts have more impressive dividend track records, with 10 companies boasting a record of over 40 years of dividend growth.
Four years ago, we asked how much an individual would need to invest in order to generate an annual income of £10,000 from corporate dividend payments. Rising yields have allowed us to reduce the amount each year and still meet the income objective, but 2018 proved a stiffer test and requires some explaining.
Companies around the world handed out a collective $354.2 billion in the third quarter of 2018, according to Janus Henderson’s Global Dividend Index.
That puts headline growth for global dividend payments at 5.1% compared to the same quarter last year.
Equity investors come in all shapes and sizes. While some invest in equities in the hope that they are buying the next Apple or Amazon, others, typically those who seek some form of income, invest in high-yielding companies as they believe that “a bird in the hand is worth two in the bush”.
As the name suggests, Murray Income trust focuses on dividend paying companies, aiming to provide shareholders with strong, reliable income growth; it prides itself on the fact that it has a 44-year track record of dividend growth. The current yield is around 5.1 per cent. The trust attempts to provide income primarily through investing in UK-listed shares, although it is able to hold up to 20 per cent of its portfolio outside of the UK.
A weak dollar pushed up dividend payments. For some regions, this masked much weaker underlying growth. Tom Bailey reports.
Behind this decline in underlying dividend growth was the growing strength of the pound against the US dollar.
We update our dividend danger zone screen, which highlights high yielding shares that may not keep their income promises.
Dividend danger zone: Our new dividend watch series has claimed its first victim. Also, six income shares that look shaky.