Ninth investment trust to join the 50-year dividend club

There’s a new member in a small club of investment trusts that have notched up at least half a century of consecutive dividend increases.

The small club of investment trusts that have notched up at least half a century of consecutive dividend increases has a new member – Murray Income Trust (LSE:MUT).

The trust, which sits in the UK equity income sector, has achieved the feat of 50 years of income rises in its centenary year, having been founded in 1923.

• Invest with ii: Buy Investment Trusts | Top UK Shares | Open a Trading Account

In a stock market update yesterday (1 August), Murray Income declared a fourth interim dividend of 12.75p for its 30 June 2023 financial year end. This gives its shareholders a total dividend for the year of 37.5p, which represents a 4.2% year-on-year increase.

It is the ninth member in a group of investment trusts with at least half a century of consecutive dividend increases, joining: City of London (LSE:CTY), Bankers (LSE:BNKR), Alliance Trust (LSE:ATST), Caledonia Investments (LSE:CLDN), The Global Smaller Companies Trust (LSE:GSCT), F&C Investment Trust (LSE:FCIT), Brunner (LSE:BUT), and JPMorgan Claverhouse (LSE:JCH).

Charles Luke, fund manager of Murray Income, says that the UK has a rich dividend heritage, which sets it apart from other regions.

Luke said: “The UK has a long-established and well-developed dividend culture. While other countries may have improved their payouts to shareholders in recent years, few can match the track record of UK companies.

“The yield for the FTSE All-Share Index is currently 4.0%, which puts it significantly ahead of most major markets. The S&P 500, for example, yields just 1.5%.”

• The eight income investment trust heavyweights: how sustainable are the dividends?
• Are ‘dividend hero’ investment trusts keeping up with inflation?

Murray Income has a yield of 4.2%. It aims to achieve a high and growing income with capital growth through investing predominately in UK dividend-paying shares. It can invest up to 20% in overseas stocks, an allowance that it utilises.

With investment trust dividend heroes, it is important to look under the bonnet as some of the yields are low, such as F&C and BMO Global Smaller Companies, and this duo have more of a growth than an income focus.

Give high inflation, there’s plenty of appeal in sizing up ‘dividend hero’ investment trusts in the hope that boards will continue to increase income payments to maintain their reliable dividend records.

Such consistency is highly prized by investors, with many dividend heroes regularly featuring in our monthly most-bought investment trusts' league tables, with July's ranking recently published.

• Why the outlook for dividends in 2023 has brightened
• Delving into the dividend: nine income trusts delivering top total returns

Luke adds: “The UK market is often seen as old-fashioned, beholden to yesterday’s companies in mature, low-growth industries. This may be true of a good number of the UK’s largest companies but, taking a look lower down the market capitalisation scale, there is an increasing range of companies exposed to unstoppable global trends such as digitalisation, ageing populations, the energy transition and emerging global wealth.

“Given that 20% of its portfolio can be invested in overseas-listed companies, Murray Income ensures that it does not miss out on the attractive industries that are not normally available to UK-only investors.”

Released in March, the annual publications about investment trust dividend heroes (those with 20 years or more of dividend increases) and ‘next generation’ heroes (those that have raised payouts for between 10 and 20 years) can be found below:

• The 18 investment trusts that have raised dividends for over 20 years
• The 2023 line-up of ‘next generation’ trust dividend heroes