The 20 investment trusts that have raised dividends for over 20 years

There are 20 investment trusts that have increased their dividends for more than 20 years.

The Association of Investment Companies’ (AIC) latest list of “dividend heroes” shows half have increased their dividends for 50 or more consecutive years.

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City of London (LSE:CTY), Bankers (LSE:BNKR), and Alliance Witan (LSE:ALW) are out in front with 59 years of dividend rises, followed by Caledonia Investments (LSE:CLDN) (58 years); The Global Smaller Companies Trust (LSE:GSCT) (55 years); F&C Investment Trust (LSE:FCIT) (55 years); Brunner (LSE:BUT) (54 years); JPMorgan Claverhouse (LSE:JCH) (53 years), Murray Income Trust (LSE:MUT) (52 years) and Scottish American (LSE:SAIN) (52 years).

Five dividend heroes have increased their dividends each year for between 30 and 43 years, while the other five have between 21 and 25 years of increases, according to the trade body.

Investment companies’ ability to hold back up to 15% of the income they receive each year in a revenue reserve gives them an advantage in delivering income to investors.

This structure came into its own during the global financial crisis and again during the Covid-19 pandemic. Boards dipped into their reserves to top up income shortfalls from underlying investments, so that they could maintain their long track records of raising their dividend year in, year out.

Annabel Brodie-Smith, communications director of the AIC, notes: “Our dividend heroes have shown remarkable resilience, continuing to raise their payouts during high inflation in the 1970s, the recession of the 1990s, the global financial crisis in 2008 and the pandemic. While dividends are never guaranteed, investment trusts’ dividend hero track records are highly valued by income seekers.”

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How the revenue reserve actually works

It’s easy to get the impression that the revenue reserve is somehow “ring-fenced”, but that’s not the case. In reality, it amounts to little more than an accounting tactic, an entry in the books to show retained revenue. That money is part of the trust’s net asset value (NAV) and is invested in the same way as the rest of the portfolio. If some of it is needed to top up dividend distributions, then the manager has to sell holdings or dip into the cash element and the NAV is affected. 

Of course, even for those investment trusts with healthy income reserves, there’s no guarantee that dividends will be maintained or increased.  

Other considerations

While buying investment trusts that are committed to increasing dividends is an important consideration for income seekers, not all dividend heroes have attractive yields.

Technology investor Scottish Mortgage (LSE:SMT) yields just 0.37% despite raising its payout for 43 years, while F&C and The Global Smaller Companies Trust also have low yields of 1.28% and 1.67% respectively.

The highest-yielding trusts are Athelney Trust (LSE:ATY) (7.4%), Value and Indexed Property Income (LSE:VIP) (7.08%), and Aberdeen Equity Income Trust (LSE:AEI) (5.69%).

The dividend heroes with the greatest five-year annualised growth rates are Alliance Witan (14.52% growth a year), The Global Smaller Companies Trust (12.03%) and BlackRock Smaller Companies (LSE:BRSC) (6.25%).

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There are a few other things to bear in mind. First, investment trusts tend to be more volatile than funds over shorter periods due to discounts potentially widening and the ability to gear (borrow to invest), so make sure you are comfortable with that.

Second, consider the strength of the dividend reserves, which enables investment trusts to bolster dividend payouts in leaner years. The revenue reserve figure, expressed in years, is published on the AIC website.

How income is generated from the underlying investments is also important. Some investment trusts finance their dividends from capital as well as income. This approach is all well and good when capital returns are being delivered, but it tends to be more erratic when stock markets are more volatile. 

Finally, premiums are something to keep an eye on. When buying on a premium, investors buying today are paying more than the underlying assets are worth. In general, investors should be cautious when a premium is 5% or higher, since premiums do not tend to be sustainable over time.

Investment trust dividend heroes

Source: theaic.co.uk and Morningstar. Data at 12 March 2026.