Merchants Trust posts 40th year of dividend hikes as it nearly doubles benchmark index
London-listed investment trust Merchants Trust announced its 40th consecutive year of dividend growth today after nearly doubling the returns of its benchmark index last year.
The trust’s net asset total returned 35.7 per cent last year, outperforming its benchmark FTSE All-Share Index by 16.8 percentage points.
Shareholders are now set to enjoy a full year dividend payout of 27.3p, up from the previous year’s 27.2p and marking the trust’s 40th consecutive year of dividend hikes.
Merchant chairman Colin Clark said the firm had thrived amid recent market turbulence.
“Opportunities abound when markets are volatile,” he said.
“Whilst the recent market rotation from ‘growth’ to ‘value’ has been helpful from time to time, this style bias isn’t required for the Merchants portfolio to perform.”
Analysts at Interactive Investor said the fund’s high yield strategy had also been a draw for investors amid soaring inflation
“With the trust now hitting a 40-year record of consecutive dividend increases with the declared final dividend, this ‘AIC dividend hero’ has a lot to offer for income investors, and is a reminder not to write off the UK, even if it might have tested patience at times,” said Tracy Zhao, Senior Fund Analyst, interactive investor.
“The trust has delivered a 62 per cent total return over the past five years, doubled of rivals, as the average UK Equity Income trust has returned 29 per cent. It also ranked top among its Morningstar peer group.”