The City of London Investment Trust has announced its full-year results today, marking a landmark 60 consecutive years of annual dividend growth, the first investment trust to reach this milestone.
According to the firm, a £1,000 investment in the trust in 1966 would have compounded up to nearly £1.3m today, compared to less than £0.7m from the UK market. Over the past one, three and five years, the trust has outperformed both average sector peers and the wider FTSE All Share and has broadly kept pace over 10 years.
Sir Laurie Magnus CBE, chair of The City of London Investment Trust plc, said: “The dividend was increased, for the 60th consecutive year, by 4.0% and was fully covered by earnings per share.
“This continues City of London’s unique leadership in delivering the longest record of consecutive annual dividend increases in the investment trust sector.”
Job Curtis, fund manager of the trust, added: “Our investment approach prioritises patience, valuation discipline and long-term thinking, all of which have allowed us to navigate the varied market conditions of the past six decades.”
Due to its string of dividend payments, it is a mainstay on the Association of Investment Companies (AIC)’s dividend heroes list.
Annabel Brodie-Smith, director of the AIC, congratulated the trust on this milestone: “This investment trust’s inspiring diamond jubilee highlights the remarkable resilience of the dividend hero investment trusts.
“They have continued to raise dividends during high inflationary periods in the 1970s, the recession of the 1990s, the global financial crisis in 2008 and the pandemic.”
She attributed this to trust’s ability to smooth the dividends, by retaining up to 15% of the income received each year to boost payouts during these difficult market periods.
Alongside this milestone, the AIC’s dividend heroes list also welcomed a new addition this morning, the BlackRock Greater European trust, which has recorded it’s 20th year of dividend increases.
Brodie-Smith noted this was the first dividend hero from the IT European sector to enter the list.
Led by Benjamin Moore and Brian Hall, the trust aims to deliver long-term capital growth through investment primarily in European equity securities. Previously, the trust was led by Stefan Gries since 2017, who has since departed the industry for health reasons.
See also: BlackRock European Trust appoints new portfolio manager
Over the past 10 years, the trust has delivered a 142.2% total return for investors, compared to an IT Europe sector average of 148.8%, according to data from FE fundinfo.
Andrew Impey, chair of the trust, said: “We are pleased to have delivered 20 consecutive years of dividend growth to our shareholders, reflecting the resilience of BlackRock Greater Europe’s underlying portfolio holdings through different market cycles.
“The board uses the investment trust structure to maintain dividend progression, allowing the portfolio managers to remain unconstrained by income targets and focus instead on quality growth companies capable of delivering attractive total returns,” he concluded.
The addition of BlackRock Greater Europe brings the total number of dividend heroes to 21, according to the AIC.
