Starting an income growth pf

[monabri]

By your own admission you don't know much about STS, and I can't comment for Dod, but I know of at least one other long standing poster who owns STS and who I think, like me, is content with the trust performance. It's up 23% in the past 12 months, and has a 5 year divi growth rate of 5.4% per annum, and with the freedom to invest in whatever stocks the manager wishes (ie they can pay the dividend partly from capital) and a not too 'reachy' yield of 3.2%, all I'm saying is it's worth adding to any list of possible global equity income ITs.

Mark Whitehead and his team at Martin Currie probably take appropriate interest in it.

The discount has certainly closed over the last couple of months (12 month average -5.4% to ~0%). Interesting that the AIC website doesn't mention payment of dividend from capital. Clicking on "dividend history" in the link provides info on the divi all the way back to 1987. The div cover of 0.32 years might be on the low side.

https://www.theaic.co.uk/companydata/0P00008ZPR

[Longtermyieldman]

Looking for a close to natural yield to start with and capital preservation, the ambition is modest with progressive income support.

You don't mention the level of yield you're after. Many of the moderate or lower yielding ITs have better long-term dividend growth than those with a higher yield (which I think was shown by the long term B7 v B8 comparison).

The AIC site will show the dividend growth for the last 5 years as well as the current yield (always check as there are a few errors, e.g. Invesco Perpertual UK Smaller Cos (IPU) is showing with a 5.1% yield, instead of the more realistic 3.6%). Some of these ITs have a much longer track record of good dividend growth (e.g. HSL). Some of the more extreme dividend growth figures result from a recent switch to supplementing the dividend from capital, e.g. JPM Global Growth & Income (33% pa), JPM Asian (48%) - both aim to distribute 4% of NAV, so the dividend will fluctuate in the same way it does for European Assets.

Examples of ITs with decent 5 year dividend growth:
Henderson Smaller Companies (HSL), currently yielding 2.6%, 5 year growth nearly 16% pa
JPM Claverhouse (JCH), yield 4%, growth 7.1% pa
Finsbury Growth and Income (FGT), yield 1.9%, growth 8% pa
Bankers (BNKR), yield 2.2%, growth 6.9% pa
Schroder oriental Income (SOI),yield 3.9%. growth 5.4% pa
Fidelity European Values (FEV), yield 2.6%, growth 16% pa

Andrew

Other income-growers include BlackRock Smaller Companies (BRSC), BlackRock Throgmorton (THRG) and BMO Global Smaller Companies (BSC - from memory). But starting yield is low (2-3%, I believe)

There was a piece published by one of the papers recently, perhaps the Telegraph, which looked at which ITs were likely to pay the most dividends over a 10yr period, as a percentage of purchase price. This is a function of both initial yield and income growth. I think some of my suggestions and those above made the cut, as did the likes of Diverse Income (DIVI), Lowland (LWI) and Aberdeen Standard Equity Income (I think that was the name) - probably best to Google it than rely on my imperfect recollections!