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Next generation of dividend heroes

18 March 2019

Which investment companies are knocking on the door of 20 consecutive years of dividend increases?

Following the announcement of its dividend heroes last week, the Association of Investment Companies (AIC) has released its next generation of dividend heroes, the investment companies waiting in the wings to become dividend heroes having raised their dividends for at least 10 years but less than 20 consecutive years.

Aberdeen Asian Income Fund is a new joiner to the next generation of dividend heroes having achieved its 10th annual dividend increase in January. It joins 21 other investment companies which have harnessed their ability to retain 15% of the income they receive each year to smooth dividends through both good and bad times.

Leading the group and on the verge of becoming a full dividend hero, is Perpetual Income & Growth, managed by Mark Barnett, which has grown its dividend for 19 straight years. Hot on its heels is Aberdeen Standard Equity Income with 18 years of increases, followed by Athelney and TR European Growth which both boast 16 rises in a row.

In addition to Aberdeen Asian Income Fund, three more of the next generation have announced a further year of dividend increases in 2019. Earlier in March, Athelney and Murray International reached their 16th and 14th year of rises and in February BlackRock Throgmorton achieved its 15th consecutive increase.

Yoojeong Oh, manager of Aberdeen Asian Income Fund, the new joiner to the next generation of dividend heroes, said: “A dividend paying culture in Asia is certainly developing. More and more companies are recognising the importance of paying an annual dividend to shareholders; Aberdeen Asian Income Fund’s dividend has more than doubled since the fund was launched in 2005. During this time we’ve also been able to build cash reserves for that rainy day. Even during the depths of the global financial crisis in 2008 we were able to maintain the level of income we paid to our shareholders.

“The fund follows a total return strategy focusing on both capital growth and paying a progressive dividend; it currently yields 4.5%. We engage frequently with company management to drive shareholder returns. Generally we are seeing governance among Asian businesses moving towards international standards, making balance sheets more efficient and shareholder returns more attractive.

‎“Asia’s long-term prospects remain exciting with structural trends – greater wealth, growing populations and adoption of new technologies – continuing to power the region’s growth. Companies with clear competitive advantages, pricing power and strong balance sheets can deliver consistent earnings and dividend growth over time which we believe positions the fund well to gain from Asia’s rich potential.”

Annabel Brodie-Smith, Communications Director of the Association of Investment Companies (AIC), said: “The next generation of dividend heroes is growing, with 22 companies increasing their dividends every year for between 10 and 20 years. It’s great to see a new joiner, Aberdeen Asian Income Fund, making full use of the investment company structure to pay a rising and dependable income. Investment companies have unique advantages when it comes to paying dividends which investors can rely on. They can hold back up to 15% of the income they receive each year and put it into their revenue reserves to boost pay-outs when times are tough. This ability to pay reliable income is a very important feature for lots of investors.”

The AIC’s next generation of dividend hero investment companies

Company

AIC sector

Number of consecutive years of dividend increases

% yield (at 28/02/19)

Perpetual Income & Growth

UK Equity Income

19

4.58

Aberdeen Standard Equity Income

UK Equity Income

18

4.88

Athelney

UK Smaller Companies

16

3.96

TR European Growth

European Smaller Companies

16

2.53

BlackRock Smaller Companies

UK Smaller Companies

15

2.11

BlackRock Throgmorton Trust

UK Smaller Companies

15

2.04

Establishment Investment Trust

Flexible Investment

15

2.91

Henderson EuroTrust

Europe

15

2.94

Henderson Smaller Companies

UK Smaller Companies

15

2.62

Aberdeen New Dawn

Asia Pacific - Excluding Japan

14

1.86

Artemis Alpha Trust

UK All Companies

14

1.79

Murray International

Global Equity Income

14

4.39

BlackRock Greater Europe

Europe

13

1.73

Edinburgh Investment

UK Equity Income

13

4.37

Witan Pacific

Asia Pacific - Including Japan

13

1.74

Henderson European Focus

Europe

12

2.74

Schroder Oriental Income

Asia Pacific - Excluding Japan

12

3.9

Henderson Far East Income

Asia Pacific - Excluding Japan

11

6.41

HICL Infrastructure

Sector Specialist: Infrastructure

11

4.83

International Public Partnerships

Sector Specialist: Infrastructure

11

4.54

Standard Life UK Smaller Companies

UK Smaller Companies

11

1.63

Aberdeen Asian Income Fund

Asia Pacific - Excluding Japan

10

4.44

 

Source: AIC/Morningstar

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Notes

  1. 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 358 members and the industry has total assets of approximately £184 billion.
  2. 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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Annabel Brodie-Smith
Communications Director
Tel: 020 7282 5580
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