In focus
This trust has been described as “essential” for investors in retirement
who are looking to generate strong income from their portfolio
Dunedin Income
Growth
TRUSTNET
These smaller holdings still have
the same quality characteristics
that Dunedin Income Growth has
always favoured, such as being run
by superior management teams and
operating in industries with high
barriers to entry.
Top holdings include income
favourites such as GlaxoSmithKline
and British American Tobacco.
Its biggest sector exposure is to
financials, followed by healthcare,
consumer goods and industrials.
In an update before the coronavirus
sell-off, Kernohan and Ritchie said:
“Given potentially volatile markets
ahead and relatively full valuations,
we see little reason to shift from a
conservative focus on higher quality
businesses.”
FACT BOX
MANAGERS: Louise Kernohan & Ben Ritchie / LAUNCHED: 01/02/1873 / DISCOUNT/PREMIUM:
-3.2% / OCF: 0.63%
CROWN RATING
PERFORMANCE OF TRUST VS SECTOR OVER 5YRS
IT UK Equity Dunedin Income Growth
Income (15.55%) Investment Trust (32.62%)
50%
40%
30%
20%
10%
0%
-10%
16
-20%
quarterly income. Dividends are
paid in February, May, August
and November, which is good for
providing smooth dividend flows
within a portfolio.”
FE Analytics shows the trust has
paid out an income of £2,258.98
over the past five years on an initial
investment of £10,000. This is the
sixth-highest payout in the IT UK
Equity Income sector, beating the
likes of Finsbury Growth & Income,
Temple Bar, Edinburgh and City of
London investment trusts.
Over recent years, Kernohan and
Ritchie have evolved the trust's
strategy, focusing more on dividend
growth and less on the initial yield.
This means the managers have
been selling out of stocks with high
dividends that have limited prospects
of increasing, while tilting the
portfolio towards the small- and mid-
cap end of the market.
I
ncome investors are often
warned to look not just at high
headline yields, but the prospect
of dividend growth as well. Dunedin
Income Growth is a trust that ticks
both of these boxes.
The trust is managed by Louise
Kernohan and Ben Ritchie, with the
aim of providing a quarterly income
and long-term capital growth. In
terms of total returns, it is the best
performer in the IT Equity Income
sector over the past three years, with
gains of 30.89 per cent; the trust is
also in the top quartile over one and
five years, and in the second quartile
over the past decade.
Philippa Maffioli, senior adviser
at Blyth-Richmond Investment
Managers, said: “Dunedin Income
Growth is essential for an income-
hungry retiree. It contains a selection
of high-quality UK and overseas
companies, delivering a resilient
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Source: FE Analytics
trustnet.com