20 investment companies achieve dividend hero status

There are now 20 investment companies that are dividend heroes, having increased their annual dividends for 20 years in a row.

On Thursday last week, Henderson Smaller Companies announced its final dividend, bringing total dividends for the year to 26.0p a share, an 8.3% increase on last year. This was the company’s 20th consecutive year of dividend increases.

Other new joiners to the dividend heroes club this year are Athelney Trust, which became a dividend hero in February, and BlackRock Smaller Companies, which joined the list in May.

The full list of dividend heroes, compiled by the Association of Investment Companies (AIC), can be found below. Nine of the 20 dividend heroes have increased their dividends for 50 or more consecutive years, including JPMorgan Claverhouse and Murray Income Trust, which both reached the 50-year milestone this year.

Investment companies are able to hold back up to 15% of the income they receive in any given year and hold it in a revenue reserve for distribution in future years. This enables investment companies to smooth dividends through time.

Annabel Brodie-Smith, Communications Director of the Association of Investment Companies (AIC), said: “Congratulations to the three investment companies that have achieved dividend hero status this year. It’s a real achievement to consistently increase dividend payments to shareholders for 20 years or more.

“It’s interesting to see that all three new entrants to the dividend heroes list this year are in the UK Smaller Companies sector. Smaller companies are often associated with growth rather than income, but these three investment companies show that they can also provide consistently growing dividends.

“It’s important to remember that dividends are never guaranteed, and if you’re in doubt about whether investment companies are suitable for you, you should speak to an independent financial adviser.”

Comments from the new dividend heroes can be found below.

Neil Hermon, Portfolio Manager of Henderson Smaller Companies Investment Trust, said: “At Henderson Smaller Companies Investment Trust, our investment style is to target profitable, growing, cash generative, dividend paying companies. This strategy has seen the income generated by the trust grow significantly, enabling us to grow dividends to our shareholders every year for the last 20 years and at a compound rate of 21.8% per year.

“We believe dividends are an important component of total return, both in our portfolio but also to our shareholders. We believe that our investment approach can generate good long-term capital returns for shareholders whilst also providing a growing income stream from dividends.”

Roland Arnold, Manager of BlackRock Smaller Companies, said: “Whilst it is not the strategy of the trust to specifically target high yielding companies, our focus on businesses that generate a high return on capital typically results in high levels of cash flow generation. We encourage management teams to invest this surplus cash in high return projects, which also provides the opportunity for a sustained dividend that grows in line with the companies themselves. So while dividends are a welcome return to our investors, we see them as a by-product of a successful growth strategy.”

Dr Manny Pohl, Managing Director of Athelney Trust, said: “Athelney Trust is very proud to be included in the AIC dividend hero list of companies that have achieved the milestone of increasing dividends for 20 consecutive years. This has been achieved by consistently applying to stock selection our investment philosophy, which is built on the belief that the economics of a business drives long-term investment returns and that investing in high quality growing businesses that can generate predictable, above average economic returns will produce superior investment performance over the long term. Quality small and mid cap growth stocks have proven to be highly lucrative in providing not only a price return to Athelney but an increasing dividend stream over time.”

Full list of dividend heroes

	Company	AIC sector	Number of consecutive years of dividend increases
1.	City of London Investment Trust	UK Equity Income	57
2.	Bankers Investment Trust	Global	56
3.	Alliance Trust	Global	56
4.	Caledonia Investments	Flexible Investment	56
5.	The Global Smaller Companies Trust	Global Smaller Companies	53
6.	F&C Investment Trust	Global	52
7.	Brunner Investment Trust	Global	51
8.	JPMorgan Claverhouse	UK Equity Income	50
9.	Murray Income Trust	UK Equity Income	50
10.	Scottish American	Global Equity Income	49
11.	Witan Investment Trust	Global	48
12.	Merchants Trust	UK Equity Income	41
13.	Scottish Mortgage Investment Trust	Global	41
14.	Value and Indexed Property Income	Property - UK Commercial	36
15.	CT UK Capital & Income	UK Equity Income	29
16.	Schroder Income Growth Fund	UK Equity Income	27
17.	abrdn Equity Income Trust	UK Equity Income	22
18.	Athelney Trust	UK Smaller Companies	20
19.	BlackRock Smaller Companies	UK Smaller Companies	20
20.	Henderson Smaller Companies	UK Smaller Companies	20

Source: theaic.co.uk / Morningstar (as at 07/08/2023).

An up-to-date list of dividend heroes can be found on the AIC website.

- ENDS -

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Notes to editors

The Association of Investment Companies (AIC) represents a broad range of closed-ended investment companies, incorporating investment trusts and other closed-ended investment companies and VCTs. The AIC’s members believe that the industry is best served if it is united and speaks with one voice. The AIC’s vision is for closed-ended investment companies to be considered by every investor. The AIC has 350 members and the industry has total assets of approximately £265 billion.
For more information about the AIC and investment companies, visit the AIC’s website.
Disclaimer: The information contained in this press release does not constitute investment advice or personal recommendation and it is not an invitation or inducement to engage in investment activity. You should seek independent financial and, if appropriate, legal advice as to the suitability of any investment decision. Past performance is not a guide to future performance. The value of investment company shares, and the income from them, can fall as well as rise. You may not get back the full amount invested and, in some cases, nothing at all.
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20 investment companies achieve dividend hero status

Comments from the new dividend heroes can be found below.

Full list of dividend heroes

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