What I Bought Last consistent re-investment , low levels of debt and prudent governance . Dividend growth is the beating pulse from which the fund gauges the health of investments . So far this year , 41 of the fund ’ s holdings have made dividend declarations – about 90 % have increased payouts , 10 % have held them at the prior year ’ s level , and none have made cuts . The average increase is 18 % across all 41 stocks , a figure that includes elements of post-Covid restoration and recovery , but the principal driver is underlying business growth .
The dividend increases are matched by increased investment in R & D and operating capacity . We estimate that more than 90 % of the fund ’ s holdings that have R & D budgets increased them in the last year – and by an average of 13 %. Likewise , 90 % of the companies focused on capital investment increased their commitments by an average of 25 %. Companies that invest in their future expansion fund dividend increases from the profit and cash surpluses that their investments generate .
Taking responsibility Everyone has to be aware of ESG concerns these days , and Heriot Global offers far more than a box-ticking strategy . As a signatory to the United Nations ’ Principles for Responsible Investment since 2012 , it has an excellent track record and passed through our screening with a high score . Investing in an inflationary environment is never easy , but the principle of reverting to strong companies with progressive dividend policies is compelling . In Heriot Global , we have found kindred spirits .
Kerry Nelson is chief executive officer of Nexus IFA
Issue 87 - September 2022 / 69 /