The 10 trusts with a record of over 40 years of dividend growth

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 per cent of their annual income for a rainy day. 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.

The most recent list of investment trust 'Dividend Heroes' published annually by the Association of Investment Companies (AIC)  shows that four trusts have achieved the feat of increasing dividends for over 50 years.

City of London Investment Trust, Bankers Investment Trust and Alliance Trust are the top three dividend growers: all have increased their payouts to shareholders for 51 consecutive years. They are closely followed by Caledonia Investments in fourth place, with 50 years of dividend growth.

But it is worth noting that a focus on sustainable dividend growth does not necessarily equate to a particularly high yield. F&C Global Smaller Companies, which is in fifth place in the table with 47 years of dividend growth, only yields 0.97 per cent, for example.

Dividend heroes
CompanySectorNumber of consecutive years dividend increased
City of LondonUK equity income51
BankersGlobal51
Alliance TrustGlobal51
Caledonia InvestmentsGlobal50
F&C Global Smaller CompaniesGlobal47
Foreign & ColonialGlobal47
BrunnerGlobal46
JPMorgan ClaverhouseUK equity income
45
Murray IncomeUK equity income44
WitanGlobal43
Scottish AmericanGlobal equity income
38
Merchants TrustUK equity income35
Scottish MortgageGlobal35
Scottish ITGlobal34
Temple BarUK equity income34
Value & IncomeUK equity income30
F&C Capital IncomeUK equity income24
British & AmericanUK equity income22
Schroder Income GrowthUK equity income22
Invesco Income GrowthUK equity income20
Source: AIC using Morningstar

- This article was first published in March 2016, but has been updated in March 2018.

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