Through wars, recessions, depressions, and three day week’s this collection of investment trusts have succeeded in increasing their dividends each year every year.

The investment trust structure lends itself well to them being positioned to generate increasing dividends year after year, because of their ability to hold back up to 15% of income to save for a rainy day, much like people and companies do, and Governments should do also, though famously the latter years of the Blair/Brown Government failed to do.

The AIC (Association of Investment Companies) has published a list of the investment trust dividend heroes, who have been increasing their dividends for twenty years of more.

Three have records stretching back an incredible 48 years. In January, Bankers Investment Trust accomplished its 48 th year of consecutive dividend increases, joining stablemate City of London, and Alliance Trust.  become the 10 th trust to achieve a 40 th consecutive year dividend increase. By coincidence, the company recently celebrated its 10 th anniversary of being multi-manager.

A solution for retirees

The consistency of returns for the trusts listed below makes them more dependable than many other assets that are perceived to be more secure such as cash investments or Bonds. Though the certainly achieved through dividends doesn’t extend to more volatile share prices.

With the Governments changes to retirement options due to take effect in a few weeks, investment trusts may start be play a more important part in the investment planning of retirees, for whom securing a rising income, with protection against inflation, is of much greater importance than short or medium term volatility in share prices, which over the long term, history has shown us tend to go up.

Annabel Brodie-Smith, Communications Director at the AIC added: “There’s nothing more reassuring to investors than a company with a solid history of dividend increases, and the investment company sector’s track record here is second to none. 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 dividend smoothing.”

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