Merchants Trust has said it is set to increase its dividend for the 33rd year in a row.
The board of Merchants, which is managed by Allianz Global Investors, is recommending a final dividend of 6.0p per share, which will give a total of 23.8p for the year, an increase of 0.8 per cent.
Simon Fraser, chairman of the Merchants Trust, said: “With a 126-year history, the Merchants Trust has a strong profile and is a popular choice for both professional and private investors.
“We attribute this to our consistent philosophy: to provide investors with year-on-year dividend growth, and to deliver both capital and income growth over the medium to long term.
“Our fund managers are finding attractive investments across a variety of sectors of the stock market although they also see areas of over-valuation, particularly among the more defensive industries.
“We believe that Merchants continues to be well placed to benefit from the rapidly changing UK savings market.”
The trust’s NAV for each share with debt at par was up by 5.8 per cent for the year to 31 January on a total return basis.
Adviser view
Graeme Inglis, director of Kirkcaldy-based Create and Prosper Financial Services, said: “We don’t tend to use investment trusts because our overriding philosophy is to spread risk, and sometimes the downside of an investment trust is that it is a listed asset, so they can be higher-risk.”
