Dividend Heroes: the investment trusts with the longest track record of consistent dividend growth
Archived article: Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
Certain investments have a particular advantage over cash in the bank and that’s the ability to provide a growing income stream.
Cash savings rates are often fixed which means your money won’t buy as much if the cost of living goes up. If your dividends go up each year it means you can potentially beat the rate of inflation, and your money goes further.
Investment trusts have a certain trick up their sleeve that enables them to pay a growing stream of dividends, even in bad times.
While dividends are never guaranteed to be paid, investment trusts are permitted to hold back up to 15% of the income they receive from their portfolios and use that money to boost dividends during lean spells, when businesses in their portfolio may be cutting their own payouts.
This structure has enabled many investment trusts to pay rising dividends through good and bad years for many decades, a record unrivalled by other funds such as unit trusts.
Finding trusts with a long record of dividend growth
There is a way to find out which investment trusts have the longest history of increasing dividends each year, and that’s by looking at the ‘Dividend Heroes’ list which is published on the AIC’s website and reproduced in this article.
To belong to this club, investment trusts need to have increased dividends for 20 or more years in a row. Currently, 10 of these Dividend Heroes have over half a century of unbroken annual increases under their belts.
| Investment trusts that have consistently increased their dividends for 20 years or more in a row | ||
|---|---|---|
| Company | AIC sector | Years of consecutive dividend increases |
| City of London Investment Trust | UK Equity Income | 58 |
| Bankers Investment Trust | Global | 58 |
| Alliance Witan | Global | 58 |
| Caledonia Investments | Flexible Investment | 58 |
| The Global Smaller Companies Trust | Global Smaller Companies | 54 |
| F&C Investment Trust | Global | 54 |
| Brunner Investment Trust | Global | 53 |
| JPMorgan Claverhouse | UK Equity Income | 52 |
| Murray Income Trust | UK Equity Income | 51 |
| Scottish American | Global Equity Income | 51 |
| Merchants Trust | UK Equity Income | 43 |
| Scottish Mortgage | Global | 43 |
| Value and Indexed Property Income | Property - UK Commercial | 38 |
| CT UK Capital & Income | UK Equity Income | 31 |
| Schroder Income Growth Fund | UK Equity Income | 29 |
| Aberdeen Equity Income Trust | UK Equity Income | 24 |
| Athelney Trust | UK Smaller Companies | 22 |
| BlackRock Smaller Companies | UK Smaller Companies | 22 |
| Henderson Smaller Companies | UK Smaller Companies | 21 |
| Murray International Trust | Global Equity Income | 20 |
Source: AIC, 10 July 2025
At the time of writing, 20 trusts qualify for dividend hero status, with City of London Investment Trust, Bankers, Alliance Witan and Caledonia Investments sporting 58 consecutive years of dividend hikes apiece.
These four trusts started paying their shareholders higher dividends in the same year Bobby Moore held the World Cup aloft for England and have grown distributions in every year since.
Only one of this quartet currently trades at a higher share price than the value of its underlying assets, also known as trading on a premium. This is the City of London Investment Trust, effectively a ‘best ideas of the FTSE 100’ investment vehicle which has benefited from owning many of this year’s best performing UK stocks.
In contrast, Caledonia trades on a 30%-plus discount to net asset value. This likely reflects the trust’s significant exposure to private capital where it could be difficult to sell assets quickly, in addition to public companies and funds.
This global multi-asset investment vehicle remains 49%-owned by the family that founded the trust, meaning it has similar qualities to a family office whose job is to create and protect wealth for generations to come.
The biggest of the four by total assets is Alliance Witan, created from the merger of Alliance Trust and Witan in 2024.
Other trusts on the Dividend Hero list
The Global Smaller Companies Trust has increased its dividend for 54 years in a row, and it will be 55 years this August if that trend remains intact.
F&C, the ‘one-stop-shop’ investment trust invested in more than 350 companies in 35 countries, holds a 10-year share price total return approaching 200% has increased its dividends for 54 years in a row.