193. Investing for income in Asia
Richard Sennitt, manager of Schroder Oriental Income Fund, talks about the regulatory issues in...
After what has been a torrid year for income investors, with UK dividends falling 41%, some good news finally: six investment trusts have now raised their dividends for the past 50 consecutive years or more and the next generation of ‘dividend heroes’ continues to grow.
The Association of Investment Companies (AIC) has published its latest list of dividend heroes – investment companies that have consistently increased their dividends for 20 years or more in a row.
Sue Noffke, who has been running Schroder Income Growth for the past decade, explained more about how she used the revenue reserve in 2020 – but has plenty left should it be needed again – in this podcast recorded in March 2021:
At a time when resilient income streams have never been more important for investors, recent research from the AIC found that 85% of equity income-paying investment companies increased or maintained their dividends in 2020 compared to 23% of income-paying open-ended funds.
Annabel Brodie-Smith, communications director for the AIC, commented: “Against the challenging backdrop of 2020 it’s encouraging to see that investment companies’ structural benefits came to the fore and delivered for investors. Investment companies’ ability to save up to 15% of their income each year to boost pay-outs in difficult years is a huge income advantage. It has helped the dividend heroes achieve their remarkable track records of consistent dividend growth., with four stretching as far back as the 1960s.”
Find out more about revenue reserves in this short video:
Waiting in the wings are the next generation of dividend heroes – those investment companies that have raised their dividends of each of the past 10 or more years. Among the 23 names are five Elite Rated offerings.
TR Property is a new joiner this year having recently notched up a decade of increases.
|Investment trust||Number of consecutive years dividend increased||Yield (%)|
|City of London||54||5.1%*|
|BMO Global Smaller Companies||50||1.1%*|
|Schroder Income Growth||25||4.3%*|
|Schroder Oriental Income||13||3.7%**|
|Fidelity Special Values||11||2.2%**|
*Source: AIC, 12 March 2021
**Source: AIC, 19 March 2021