‘Exceptional eight’ investment trusts hit dividend payment half century

With Athelney the latest trust to join the AIC’s dividend hero roster

City of London on a cold, snowy winter's day with the Thames, Tower of London and Shard in view
Photo by Robert Bye on Unsplash


Athelney Trust has become the Association of Investment Companies’ (AIC) latest dividend hero, a status awarded to investment trusts which have increased annual dividends for at least 20 years.

The trust, which invests in UK smaller companies, announced a 1% increase to payouts to 9.6p per share in its latest results for the year to 31 December 2022, marking its 20th successive year of dividend growth.

The induction of Athelney brings the number of dividend heroes to 18, eight of which have achieved the feat for at least 50 years.

The latest addition to the half-century club was the JP Morgan Claverhouse trust, which hit a half century of payout increases on 31 January.

City of London, Alliance Trust, and Bankers have all raised annual dividends for 56 consecutive years.

Meanwhile, Murray Income and Scottish American are poised to become the next inductees into the AIC’s ‘exceptional eight’ club, with both trusts having increased payouts for the last 49 years.

Annabel Brodie-Smith, communications director of the AIC, said: “Investors are looking for ways to protect their income in a more inflationary environment. Investment companies’ ability to hold back up to 15% of the income they receive each year gives them an edge when it comes to delivering dividends to investors. It means investment companies can reserve income when times are good to pay out in leaner years, providing smoother, more consistent dividends to investors.

“It’s remarkable that there are now eight dividend heroes with at least half a century of consecutive annual dividend increases. These dividend heroes are no strangers to difficult times, having raised their payouts to investors through the high inflation of the 1970s, recession of the 1990s and the global financial crisis in 2008. While dividends are never guaranteed, these are track records to be proud of.”

Investors turn to dividend heroes to protect income

Dividend heroes have proved to be an attractive proposition for income seekers in high inflationary environments.

Craig Baker, manager of Alliance Trust, said: “In a high inflation environment, income from stocks is preferable to income from bonds or savings accounts. The former tends to pay a set rate of interest, and savings income rarely beats inflation. Our stock pickers look for companies which can grow their earnings and therefore dividends in line with inflation by raising prices, provided they have sufficient pricing power.”

William Meadon, manager of JPMorgan Claverhouse added: “Sentiment towards UK equities, particularly large cap companies, has improved in recent months on the back of the FTSE 100 index recently reaching an all-time high. Many UK companies are enjoying strong cashflows and are often passing these back to shareholders through either higher dividends or share buybacks.

“We think the outlook for traditional high dividend payers such as banks, energy companies and miners look particularly encouraging despite this new era of higher interest rates.”

AIC Dividend Heroes

Investment companyAIC sectorNumber of consecutive years dividend increasedDividend yield (%)5-year annualised dividend growth rate (%)
City of London UK Equity Income564.653.25
Alliance TrustGlobal562.3812.77
Caledonia InvestmentsFlexible Investment551.823.64
The Global Smaller Companies TrustGlobal Smaller Companies521.218.48
F&C Investment TrustGlobal511.45.38
Brunner Global511.975.44
JPMorgan Claverhouse UK Equity Income504.714.88
Murray IncomeUK Equity Income494.151.91
Scottish AmericanGlobal Equity Income492.694.48
Witan Global482.526.67
Merchants TrustUK Equity Income404.572.44
Scottish Mortgage Global400.53.66
Value and Indexed Property IncomeProperty – UK Commercial355.812.75
CT UK Capital & IncomeUK Equity Income293.731.99
Schroder Income GrowthUK Equity Income274.163.34
abrdn Equity IncomeUK Equity Income 226.45.83
Athelney TrustUK Smaller Companies204.681.53
Source: AIC

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