42 high-yielding investment companies

Eight of the 42 companies are “dividend heroes”, having raised dividends for 20+ years in a row.

yield cash money

Interest rates may be edging upwards, but the average interest rate on a savings account is still less than 1% according to MoneySupermarket.com. The Association of Investment Companies (AIC) has released a list of the 42 investment companies with a yield above 3% and a five-year track record of increasing dividends. This represents 13% of all investment companies1.

Of the 42 investment companies, the highest-yielding is CQS New City High Yield, which invests in high-yield bonds and yields 8.68%. The highest-yielding investment company that invests in equities is Asia Pacific specialist Henderson Far East Income with a yield of 8.48%.

Eight of the high-yielding investment companies are AIC dividend heroes, which means they have consistently increased their dividend for at least 20 years in a row. The highest-yielding of the dividend heroes is abrdn Equity Income, which has increased its dividend for 21 years in a row and offers a 6.94% yield.

A total of 14 of the 42 investment companies, or a third, are from the UK Equity Income sector, making this by far the most heavily featured sector. Global Equity Income and Asia Pacific Equity Income contributed four companies each, while the Renewable Energy Infrastructure sector is home to three companies on the list.

Annabel Brodie-Smith, Communications Director of the Association of Investment Companies (AIC), said: “With inflation rising and savings rates still low, these 42 investment companies might offer a way for savers to increase their income. The companies come from a range of sectors, from mainstream equities to bonds, infrastructure and even private equity, and all have raised their dividends every year for the past five years. However, those considering investment companies need to remember that capital is at risk and dividend increases are not guaranteed. Investors should do their own research, and if in doubt, consult a financial adviser.”

Investment companies with a yield of 3% or more that have increased dividends annually for at least 5 years

Company

AIC sector

Yield (%)

5-year dividend growth p.a. (%)

Consecutive years of dividend increases**

CQS New City High Yield

Debt – Loans & Bonds

8.68

0.41

14

Henderson Far East Income

Asia Pacific Equity Income

8.48

3.19

15

Apax Global Alpha*

Private Equity

7.24

8.82

-

GCP Asset Backed Income

Debt – Direct Lending

7.11

1.60

-

abrdn Equity Income

UK Equity Income

6.94

6.60

21

CT UK High Income

UK Equity Income

6.86

2.92

-

NextEnergy Solar

Renewable Energy Infrastructure

6.85

2.56

-

Henderson High Income

UK Equity & Bond Income

6.07

1.69

-

Target Healthcare REIT

Property – UK Healthcare

6.02

1.69

-

Montanaro UK Smaller Companies*

UK Smaller Companies

5.91

25.12

-

JLEN Environmental Assets Group

Renewable Energy Infrastructure

5.90

2.06

-

CT Private Equity*

Private Equity

5.81

9.72

10

CT Global Managed Portfolio Income

Flexible Investment

5.26

4.06

11

Lowland

UK Equity Income

5.19

6.01

12

Greencoat UK Wind

Renewable Energy Infrastructure

5.02

2.52

-

Value and Indexed Property Income

UK Equity Income

5.00

2.75

35

Merchants

UK Equity Income

4.93

2.44

40

JPMorgan Elect Managed Income

UK Equity Income

4.88

4.02

11

Lindsell Train

Global

4.84

42.18

10

City of London

UK Equity Income

4.81

3.25

56

JPMorgan Claverhouse

UK Equity Income

4.80

5.81

49

International Public Partnerships

Infrastructure

4.72

2.57

13

Dunedin Income Growth

UK Equity Income

4.59

1.97

11

abrdn Asian Income

Asia Pacific Equity Income

4.53

1.66

13

Athelney

UK Smaller Companies

4.52

2.01

19

Schroder Income Growth

UK Equity Income

4.48

3.84

26

Invesco Asia*

Asia Pacific Equity Income

4.42

28.90

-

Murray International

Global Equity Income

4.41

2.98

16

BBGI Global Infrastructure

Infrastructure

4.41

3.24

-

Henderson International Income

Global Equity Income

4.24

6.26

-

Murray Income

UK Equity Income

4.13

1.36

48

Schroder Oriental Income

Asia Pacific Equity Income

4.06

4.32

15

Diverse Income Trust

UK Equity Income

3.94

6.02

-

Utilico Emerging Markets

Global Emerging Markets

3.92

3.77

-

JPMorgan Global Growth & Income*

Global Equity Income

3.90

20.77

-

CT UK Capital & Income

UK Equity Income

3.87

2.41

28

Law Debenture Corporation

UK Equity Income

3.78

11.67

12

TR Property

Property Securities

3.68

11.20

12

North American Income

North America

3.57

7.42

11

Mercantile

UK All Companies

3.55

8.45

-

CC Japan Income & Growth

Japan

3.51

5.70

-

Invesco Select Trust – Global Equity Income shares*

Global Equity Income

3.21

2.24

11

Source: AIC/Morningstar, as at 22 July 2022. Includes investment companies that meet both of these criteria: (a) a yield of at least 3% based on dividends from the last complete financial year divided by the current share price; and (b) a record of increasing their annual dividends for at least five years in a row. Special dividends are excluded. Investment companies that are winding up are excluded.

  * These companies have paid dividends out of capital profits over the past five years, or have a target dividend set at a fixed percentage of the investment company’s NAV which may include distributions from capital profits.

  ** The number of consecutive years over which an investment company has increased its annual dividends is given only for investment companies that have a record of at least ten years of dividend increases. AIC dividend heroes, which have a track record of at least 20 years of dividend increases, are highlighted in bold. Those companies with a track record of between ten and 19 years inclusive are referred to as the “next generation” of dividend heroes. A full list of dividend heroes and the next generation is here.

- ENDS -

 

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Notes to editors

  1. There were 333 investment companies excluding VCTs at the end of June. Of these, 42 (13%) met the criteria of a yield of 3% or higher and a five-year record of consecutive annual dividend increases.
  2. The Association of Investment Companies (AIC) was founded in 1932 to represent the interests of the investment trust industry – the oldest form of collective investment. Today, the 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 mission statement is to help members add value for shareholders over the longer term. The AIC has 357 members and the industry has total assets of approximately £258 billion.
  3. 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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