Dependable dividends

If you want to receive regular income from your investments, investment trusts (investment companies) could be worth considering.

Why are investment trusts good for income?

Investment trusts can grow income over time, unlike a savings account which gives you a fixed rate of interest. They can also smooth the income you get by holding some back in good years to pay it out in leaner years. The income from an investment trust is known as dividends. 

How often are dividends paid?

Investment trust dividends are often paid quarterly. They can also be paid twice a year, annually, or in rarer cases, monthly. Some investment trusts do not pay dividends and focus on long-term growth instead. 

Are dividends guaranteed?

No, dividends are never guaranteed. They may go down as well as up, or not be paid at all. However, some investment trusts, known as dividend heroes, have very long track records of not cutting or cancelling dividends. 

What are the dividend heroes?

The AIC's dividend heroes are investment trusts that have a track record of at least 20 years of increasing their dividends, year after year. Some have done this for more than 50 years in a row. The dividend heroes are popular with investors who need a regular income and want to see that income grow over time.