Looking for income from your investments? One of these 'Dividend Heroes' may be worth a look.
The vast majority of investments held in stocks and shares ISAs are either shares or unit trusts, according to Government statistics. But it could pay to consider putting other forms of investments in your ISA too.
If you are looking for income then an investment trust is well worth considering. An investment trust is basically a company (they are also known as investment companies) that invests in other companies and assets. You own shares in the investment trust, just as you would for any firm quoted on the London Stock Exchange, which is where it really differs from unit trusts. You can get a full run down of how they work in our Beginner's guide to investment trusts.
And investing in one is a smart move if you are looking for income from your investments. Research from the Association of Investment Companies (AIC) has found that 21% of its members that have been in existence for more than 10 years have raised their dividends for at least 10 years in a row.
A whopping 50% of the AIC’s UK Equity Income sector has raised dividends for 10 consecutive years, while 29% of the UK Smaller Companies sector and 27% of the Global sector have also managed over a decade of dividend growth.
Here’s a list of the AIC’s ‘Dividend Heroes’ – the Investment Companies that have increased their dividend for at least 10 consecutive years.
|
Investment company |
AIC Sector |
Dividend Increases |
|
Schroder Income Growth |
UK Equity Income |
19 years |
|
Invesco Income Growth |
UK Equity Income |
17 years |
|
Threadneedle UK Select Trust |
UK All Companies |
17 years |
|
F&C Capital & Income |
UK Equity Income |
17 years |
|
Northern Investors Company* |
Private Equity |
17 years |
|
Aurora |
UK All Companies |
16 years |
|
Perpetual Income & Growth |
UK All Companies |
15 years |
|
Standard Life Equity Income |
UK Equity Income |
14 years |
|
BlackRock Smaller Companies |
UK Smaller Companies |
11 years |
|
BlackRock Throgmorton Trust |
UK Smaller Companies |
11 years |
|
TR European Growth |
UK Equity Income |
11 years |
|
Henderson Smaller Companies |
UK Smaller Companies |
11 years |
|
Henderson EuroTrust |
Europe |
11 years |
|
Establishment Investment Trust |
Global |
11 years |
|
Athelney |
UK Smaller Companies |
11 years |
|
Aberdeen New Dawn |
Asia Pacific - Excluding Japan |
10 years |
|
Witan Pacific |
Asia Pacific - Excluding Japan |
10 years |
|
Artemis Alpha Trust |
UK All Companies |
10 years |
*This company is in the process of realising its assets
The AIC has also released a list of investment companies that have been raising their dividend for over 20 years.
|
Investment Company |
AIC Sector |
Dividend Increases |
|
City of London Investment Trust |
UK Equity Income |
48 years |
|
Bankers Investment Trust |
Global |
48 years |
|
Alliance Trust |
Global |
48 years |
|
Caledonia Investments |
Global |
47 years |
|
Foreign & Colonial Investment Trust |
Global |
44 years |
|
F&C Global Smaller Companies |
Global |
44 years |
|
Brunner Investment Trust |
Global |
43 years |
|
JPMorgan Claverhouse Investment Trust |
UK Equity Income |
42 years |
|
Murray Income |
UK Equity Income |
41 years |
|
Witan Investment Trust |
Global |
40 years |
|
Scottish American |
Global Equity Income |
41 years |
|
Merchants Trust |
UK Equity Income |
35 years |
|
Scottish Mortgage Investment Trust |
Global |
32 years |
|
Scottish Investment Trust |
Global |
31 years |
|
Temple Bar |
UK Equity Income |
31 years |
|
Value & Income |
UK Equity Income |
27 years |
Invest in a 'dividend champion' via a Stocks & Shares ISA
The appeal of investment trusts
[SPOTLIGHT]Income isn’t the only reason to think about including investment trusts in your ISA.
“A major benefit of investment trusts is that they are usually quite cheap and so you can gain access to your chosen investment at relatively low cost,” says Patrick Connolly, a certified financial planner at Chase de Vere. “Also, many investment trusts engage in gearing. This is where they borrow extra money to invest and so this gives an added boost to returns if the underlying investments perform well.”
But it's worth noting that gearing can also magnify losses so investment trusts can prove more risky than unit trusts.