Following the dividend trail
New ways to track income on the AIC website
As regular Compass readers will know, investment trusts have a long and distinguished record when it comes to paying dividends.
The most impressive records are held by the dividend heroes, investment trusts that have increased their annual payouts for at least 20 years in a row.
Topping the list with 59 years of dividend rises are City of London Investment Trust, Bankers Investment Trust and Alliance Witan, closely followed by Caledonia Investments with 58 years.
But that’s not all. Of the 20 investment trusts that qualify for dividend hero status, half of them have increased their dividends for a staggering 50 or more consecutive years.
Topping the list with 59 years of dividend rises are City of London Investment Trust, Bankers Investment Trust and Alliance Witan, closely followed by Caledonia Investments with 58 years. You can see the full list of dividend heroes here.
We have also recently released a list of the next generation of dividend heroes, those which can boast at least ten years of dividend increases, but less than 20. These could be the dividend heroes of the future and there are 30 of them.
It’s one thing knowing which trusts have strong dividend track records. But income investors are also faced with the puzzle of working out how these payments fit together across the year.This is where the AIC website’s research tools can help.
Using our website to hunt down income
Many readers will already be familiar with Income finder, which allows you to build a portfolio of investment trusts and see when their dividends are typically paid. By logging in to your AIC account and selecting the trusts you hold (or are considering), you can see their payment patterns displayed in the Dividend diary too.
We have now made the dividend diary even more useful by showing you how much income you can expect to receive in pounds from any dividends that have been declared.
First you’ll need to set up a portfolio, if you haven’t already. You can do this by searching for investment trusts and adding them to your portfolio, entering the number of shares you hold in each trust or the value of your holding.
Once you have a portfolio set up, you can select it in the dividend diary to see a summary table displaying your expected income for that month from that portfolio.
In other words, instead of just showing you which trusts in your portfolio pay dividends in a given month, the dividend diary will now show you the pound value of the income your portfolio might generate based on the number of shares you hold. This can provide a helpful independent sense check against any figures reported by your platform.
The AIC website also makes it easy to identify the trusts with the strongest dividend histories. A new “dividend hero” filter has been added to our Compare investment companies tool. Simply click ‘show more’ on the filters at the top of the page to see the new filter.
In addition to being able to filter for dividend heroes, you can also choose to see investment trusts with a policy to pay out a fixed percentage of their NAV to shareholders using the ‘enhanced dividend payer’ filter.
These features make it easier than ever to research income-focused investment trusts and see how their dividend payments might work together in a portfolio. Whether you’re building a retirement income stream or simply looking to make your dividends more predictable through the year, the AIC’s research tools can help you stay on the dividend trail.
