10 investment trusts that have increased dividend payouts for 40 years-plus

In the latest list of investment trust Dividend Heroes released by the Association of Investment Companies (AIC), nine trusts now have a record of 40-plus consecutive years of dividend growth; a further name, Alliance Trust, is likely to join the ranks when its results are announced on Friday. 15 trusts have more than 30 years of dividend increases.

10 of the 16 listed by the AIC are Money Observer Rated Funds (indicated in the table below).

The longest-running dividend growers - City of London (UK equity income sector) and Bankers (global sector) - now have 48-year records, with Alliance Trust (assuming it does announce another increase) and Caledonia hard on their heels with 47 years.


Perhaps surprisingly, given that this is all about dividend generation, nine of the top 16 dividend heroes are housed in the global sector. A further six are UK equity income funds, with Scottish American (on 35 years) the only global equity income sector member.

It's worth noting, however, that although these trusts have shown impressive reliability in their focus on dividend growth, their appearance in the table doesn't necessarily equate to a particularly large yield.

That's the case especially in the global sector, where Scottish Mortgage, for example, yields 1.1 per cent and F&C Global Smaller Companies 0.9 per cent.

In contrast, Scottish American in the global equity income sector yields 4.4 per cent, while Merchants and City of London in the UK equity income sector are on yields of 4.9 and 3.8 per cent respectively.

Annabel Brodie-Smith, communications director at the AIC, comments: 'Through the good times and the bad, many investment companies have been able to increase their dividend every year for decades because they have the unique ability to save some of the income they receive each year for tougher times, a facility known as smoothing.'

To broaden the choice for investors seeking a reliable growing income stream, the AIC plans also to look at 'new generation' dividend heroes with shorter but growing track records.

Dividend Heroes
CompanySectorNumber of consecutive years dividend increasedLaunch date
City of London**UK Equity Income          4801/01/1891
Bankers**Global          4813/04/1888
Alliance Trust*Global          4721/04/1888
Caledonia**Global          4718/07/1960
Foreign & Colonial**Global          4401/01/1868
F&C Global Smaller Companies**Global          4415/02/1889
Brunner**Global          4301/01/1927
JPMorgan ClaverhouseUK Equity Income          4201/01/1963
Murray IncomeUK Equity Income          4107/06/1923
Witan**Global          4017/02/1909
Scottish American**Global Equity Income
MerchantsUK Equity Income          3216/02/1889
Scottish Mortgage**Global          3201/01/1909
Scottish ITGlobal          3127/07/1887
Temple Bar**UK Equity Income          3130/12/1926
Value & IncomeUK Equity Income          2731/07/1981
*Alliance Trust final results are out on Friday 6 March 2015. If another dividend increase is announced, Alliance Trust will have a 48-year record of consecutive dividend increases.
**Denotes Money Observer Rated Fund

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