As savers prepare to weather the storm of rising inflation, new research demonstrates that 36 investment trusts have grown both their dividends and their share price by more than the UK consumer prices index has grown over the past five years
The 36 FTSE-listed investment companies have increased their dividends over the last five years by more than the 2.5% growth in CPI on an annualised basis over that period, the research from the Association of Investment Companies (AIC) showed.
What's more, the trusts have also delivered an annualised share price return excluding dividends of more than 2.5% during that time.
None of the companies has cut its annual dividends over this time, with all 36 paying a dividend yield of at least 2%.
“Investors are understandably concerned about rising inflation and many investment companies are focused on growing shareholders’ income and capital in real terms," said AIC spokesperson Annabel Brodie-Smith.
"It’s encouraging to see that 36 investment companies, from a wide range of sectors, have beaten inflation over the past five years, both in terms of their annual dividend payments and their share price returns. However, the past is not a guide to the future and inflation-busting returns are far from guaranteed. Investors should do their own research, and if in doubt, consult a financial adviser.”
Top 10 inflation-beating investment companies by yield
Investment company · AIC sector · Dividend yield · (%) · 5-year dividend growth · (% p.a.) · 5-year share price return · (% p.a.)
VPC Specialty Lending Investments · Debt – Direct Lending · 7.44 · 10.80 · 4.75
Greencoat UK Wind PLC (LSE:UKW) · Renewable Energy Infrastructure · 5.38 · 2.52 · 4.24
JPMorgan Russian Securities · Country Specialist · 5.10 · 20.11 · 4.50
Apax Global Alpha
Private Equity · 4.81 · 22.43 · 10.22
Merchants Trust plc (LSE:MRCH)
3.43
UK Equity Income · 4.69 · 2.53
4.51
45.11
5.97
JPMorgan Asia Growth & Income · Asia Pacific Equity Income
Invesco Asia
Asia Pacific Equity Income · 4.31 · 32.84 · 7.25
Henderson International Income Trust PLC (LSE:HINT)
Global Equity Income · 4.14 · 6.26 · 4.35
Lindsell Train Investment Trust PLC (LSE:LTI)
Global · 4.14 · 42.18 · 15.70
BlackRock (NYSE:BLK) Sustainable American Income
North America · 4.01 · 11.22 · 4.96
The others are Invesco Perpetual UK Smaller Companies, (4% yield, 6.2% div growth, 7.49% 5-yr SP return); Schroder Oriental Income (3.95, 4.32, 3.13); Montanaro European Smaller Companies Trust PLC (3.91, 22.51, 4.58); JPMorgan Global Growth & Income (3.67, 32.68, 8.68); Ecofin Global Utilities and Infrastructure (3.61, 32.77, 9.10); North American Income (3.61, 8.67, 3.74); Momentum Multi-Asset Value (3.58, 2.53, 3.24); Law Debenture Corporation (3.37, 11.16, 5.73); Diverse Income Trust (3.33, 6.02, 4.47); Templeton Emerging Markets Investment Trust PLC (LSE:TEM) (3.33, 18.16, 6.11); BMO Private Equity (3.31, 7.17, 10.68); TR Property Investment Trust plc (LSE:TRY) (2.93, 11.20, 7.85); Invesco Select Global Equity Income (2.92, 3.42, 5.77); Mercantile (2.68, 9.28, 7.16); Tritax Big Box REIT PLC (LSE:BBOX) (2.64, 2.52, 8.24); Polar Capital Global Financials (2.48, 4.39, 5.24); Standard Life Private Equity (2.42, 20.29, 13.82); Aberforth Smaller Companies (2.41, 5.18, 4.24); JPMorgan MidCap (2.40, 7.03, 5.62); Aberdeen Standard Asia Focus (2.34, 7.39, 6.14); Witan Investment Trust plc (LSE:WTAN) (2.26, 9.90, 5.98); ICG Enterprise Trust (LSE:ICGT) (2.20, 16.89, 13.51); Fidelity Special Values PLC (LSE:FSV) (2.18, 12.51, 5.11); Henderson European Focus Trust PLC (LSE:HEFT) (2.09, 4.63, 7.20); Henderson Smaller Companies Investment Trust PLC (LSE:HSL) (2.09, 9.63, 9.34); Fidelity European Trust PLC (LSE:FEV) (2.01, 14.31, 9.89).
The AIC research was sourced from Morningstar data as at 2 February 2022 and includes only trusts that are AIC members.