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  • FIRST POST
    • Reaper
    • By Reaper 6th Jul 17, 5:24 PM
    • 6,086Posts
    • 4,126Thanks
    Reaper
    A new "dividend hero"
    • #1
    • 6th Jul 17, 5:24 PM
    A new "dividend hero" 6th Jul 17 at 5:24 PM
    With the addition of Invesco Income Growth there are now 21 investment trusts which have increased their dividends every year for 20 years or more regardless of booms and busts.

    Obviously there is no certainty they will be able to carry on doing so but for those after stability rather than a roller coaster ride it may be worth a look.

    http://www.theaic.co.uk/aic/news/press-releases/a-new-recruit-to-the-dividend-heroes
Page 1
    • greenglide
    • By greenglide 6th Jul 17, 8:01 PM
    • 2,727 Posts
    • 1,726 Thanks
    greenglide
    • #2
    • 6th Jul 17, 8:01 PM
    • #2
    • 6th Jul 17, 8:01 PM
    But the increase in the cash dividend paid may be less than the increase in the share price resulting in a decrease in the yield as a percentage.

    Some of the yields are pretty low as well. Scottish Mortgage yields 0.8% so the fact that the cash amount of dividend has increased may be a bit academic - I don't suppose many people hold it for the income.
    • soulsaver
    • By soulsaver 6th Jul 17, 9:21 PM
    • 1,277 Posts
    • 427 Thanks
    soulsaver
    • #3
    • 6th Jul 17, 9:21 PM
    • #3
    • 6th Jul 17, 9:21 PM
    But the increase in the cash dividend paid may be less than the increase in the share price resulting in a decrease in the yield as a percentage.

    Some of the yields are pretty low as well. Scottish Mortgage yields 0.8% so the fact that the cash amount of dividend has increased may be a bit academic - I don't suppose many people hold it for the income.
    Originally posted by greenglide
    According to HL's div data, SMT cut the dividend from £0.14 to £0.03 in 2014/2015.. no share revaluation, so how it's increased for 30 yrs consequetive is beyond me..

    However its share price is nigh on doubled since the cut!
    Last edited by soulsaver; 07-07-2017 at 2:06 AM.
    There are 24 bottles of beer in a crate. There are 24 hours in a day. Coincidence? I think not....
    • Audaxer
    • By Audaxer 6th Jul 17, 9:46 PM
    • 249 Posts
    • 71 Thanks
    Audaxer
    • #4
    • 6th Jul 17, 9:46 PM
    • #4
    • 6th Jul 17, 9:46 PM
    But the increase in the cash dividend paid may be less than the increase in the share price resulting in a decrease in the yield as a percentage.
    Originally posted by greenglide
    But for someone investing for a growing income and who already holds this IT, it is the increase in the actual cash dividend paid that is more important than the yield.
    • Thrugelmir
    • By Thrugelmir 6th Jul 17, 9:56 PM
    • 54,345 Posts
    • 47,165 Thanks
    Thrugelmir
    • #5
    • 6th Jul 17, 9:56 PM
    • #5
    • 6th Jul 17, 9:56 PM
    The funds can only pass on what they themselves receive in the way of income. Over the past 5-7 years dividend cover has reduced considerably. As companies release excess cash. Also a number of companies pay out more in dividends than they generate in cash. An unsustainable model in the longer term.
    “ “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.” Sir John Marks Templeton
    • Economic
    • By Economic 7th Jul 17, 7:39 AM
    • 78 Posts
    • 55 Thanks
    Economic
    • #6
    • 7th Jul 17, 7:39 AM
    • #6
    • 7th Jul 17, 7:39 AM
    According to HL's div data, SMT cut the dividend from £0.14 to £0.03 in 2014/2015.. no share revaluation, so how it's increased for 30 yrs consequetive is beyond me..

    However its share price is nigh on doubled since the cut!
    Originally posted by soulsaver
    There was a five for one share split in June 2014!
    • BLB53
    • By BLB53 7th Jul 17, 10:07 AM
    • 1,048 Posts
    • 851 Thanks
    BLB53
    • #7
    • 7th Jul 17, 10:07 AM
    • #7
    • 7th Jul 17, 10:07 AM
    But the increase in the cash dividend paid may be less than the increase in the share price resulting in a decrease in the yield as a percentage.
    Some of these ITs dip into capital to maintain dividend increases. What matters to me is not so much ever increasing dividends but total return - the dividend paid + share price appreciation.

    The return on this trust over the past 5 yrs is average 10.8% p.a. which is below par for the UK income sector. You would be better off with Vanguard Lifestrategy 80 which has returned an average of 12.1% p.a. over the past 5 yrs.
    "A low-cost index tracker is going to beat a majority of the amateur-managed money or professionally managed money" Warren Buffett
    • Reaper
    • By Reaper 7th Jul 17, 2:54 PM
    • 6,086 Posts
    • 4,126 Thanks
    Reaper
    • #8
    • 7th Jul 17, 2:54 PM
    • #8
    • 7th Jul 17, 2:54 PM
    The return on this trust over the past 5 yrs is average 10.8% p.a. which is below par for the UK income sector. You would be better off with Vanguard Lifestrategy 80 which has returned an average of 12.1% p.a. over the past 5 yrs.
    Originally posted by BLB53
    I don't think you are comparing like with like. I'm not sure which IT you are referring to but assuming it's Scottish Mortgage they have achieved 12% average annual growth for over 30 years! [source]
    By all means go for Vanguard but they don't have the same long term track record.

    P.S. I'm not recommending Scottish Mortgage - they are trading at a premium and have a low yield. Just pointing out their track record.
    Last edited by Reaper; 07-07-2017 at 2:59 PM. Reason: PS
    • BLB53
    • By BLB53 7th Jul 17, 3:41 PM
    • 1,048 Posts
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    BLB53
    • #9
    • 7th Jul 17, 3:41 PM
    • #9
    • 7th Jul 17, 3:41 PM
    I'm not sure which IT you are referring to
    The comparison is with Invesco Income trust.
    "A low-cost index tracker is going to beat a majority of the amateur-managed money or professionally managed money" Warren Buffett
    • cloud_dog
    • By cloud_dog 7th Jul 17, 4:52 PM
    • 3,075 Posts
    • 1,652 Thanks
    cloud_dog
    The comparison is with Invesco Income trust.
    Originally posted by BLB53
    But you're still comparing apples with oranges.

    You stated in your post...."What matters to me....." is the overall growth.

    What probably matters to people who invest in these funs is probably income with a degree of comfort that the divi will not flutuate all over the place with economic fluctuations. That is not something the Vanguard fund could hope to achieve.
    Personal Responsibility - Sad but True

    Sometimes.... I am like a dog with a bone
    • BLB53
    • By BLB53 7th Jul 17, 7:46 PM
    • 1,048 Posts
    • 851 Thanks
    BLB53
    What probably matters to people who invest in these funs is probably income with a degree of comfort that the divi will not flutuate all over the place with economic fluctuations. That is not something the Vanguard fund could hope to achieve.
    Of course we are all free to invest wherever we choose but say for example you have £10K with Invesco fund you get £350 each year in dividends. With the Vanguard fund I can take and extra £130 every year and still have the same capital value as the Invesco investor at the end of 5 yrs.
    "A low-cost index tracker is going to beat a majority of the amateur-managed money or professionally managed money" Warren Buffett
    • Thrugelmir
    • By Thrugelmir 7th Jul 17, 7:49 PM
    • 54,345 Posts
    • 47,165 Thanks
    Thrugelmir
    With the Vanguard fund I can take and extra £130 every year and still have the same capital value as the Invesco investor at the end of 5 yrs.
    Originally posted by BLB53
    Does the Vanguard fund hold bonds?
    “ “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.” Sir John Marks Templeton
    • BLB53
    • By BLB53 7th Jul 17, 9:19 PM
    • 1,048 Posts
    • 851 Thanks
    BLB53
    Does the Vanguard fund hold bonds?
    The VLS 80 used in the above example holds 20% in bonds. The VLS 100 would provide better returns and has no bonds.
    "A low-cost index tracker is going to beat a majority of the amateur-managed money or professionally managed money" Warren Buffett
    • bigadaj
    • By bigadaj 7th Jul 17, 9:37 PM
    • 9,360 Posts
    • 5,981 Thanks
    bigadaj
    Of course we are all free to invest wherever we choose but say for example you have £10K with Invesco fund you get £350 each year in dividends. With the Vanguard fund I can take and extra £130 every year and still have the same capital value as the Invesco investor at the end of 5 yrs.
    Originally posted by BLB53
    No you can't, you may have been able to do this over the last five years, the next five years will be different.
    • Thrugelmir
    • By Thrugelmir 7th Jul 17, 9:47 PM
    • 54,345 Posts
    • 47,165 Thanks
    Thrugelmir
    The VLS 80 used in the above example holds 20% in bonds. The VLS 100 would provide better returns and has no bonds.
    Originally posted by BLB53
    Then your capital is at risk in the VLS80 fund. Many bonds are trading above nominal value currently. As for the VLS100 there's no guarantee. We've now had a bull market run of 100 months. In the main due to exceptional circumstances. The tide feels as if it is finally turning. Careful stock selection may therefore prove invaluable in the medium term.
    “ “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.” Sir John Marks Templeton
    • Audaxer
    • By Audaxer 8th Jul 17, 5:00 PM
    • 249 Posts
    • 71 Thanks
    Audaxer
    I don't think you are comparing like with like. I'm not sure which IT you are referring to but assuming it's Scottish Mortgage they have achieved 12% average annual growth for over 30 years! [source]
    Originally posted by Reaper
    I was surprised to see from that table that City of London IT has an even higher average annual total return than Scottish Mortgage IT over the three decades to 2015.

    I'm planning to purchase City of London IT as part of my income portfolio, but for the increasing yearly dividend (yield just currently under 4%) rather than the total return. Although it would be nice to see the capital balance continuing to grow, the good thing about an IT with increasing dividends that you intend to hold for the long term for income, is that short term volatility in the capital value shouldn't matter too much.
    Last edited by Audaxer; 08-07-2017 at 5:08 PM. Reason: Duplicate
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