Almost half of investment companies now pay quarterly dividends to meet buyer demand for income.
According to the Association of Investment Companies (AIC), 46 per cent of investment trusts now pay a dividend quarterly, compared with just 17 per cent in 2010.
Annabel Brodie-Smith, the AIC's communications director, said that the increase in quarterly paying was due to customer demand for regular income in a low interest rate environment.
"With investors still hungry for income from their investments, it’s not surprising that the number of investment companies paying quarterly dividends has increased since last year, to meet this demand," she said.
The number of companies paying a twice yearly dividend has increased from 30 per cent to 28 per cent, while just under a quarter pay an annual dividend. Five investment companies pay dividends on a monthly basis.
Investment trusts are able to hold back some of their profits in better times in order to continue to pay out dividends when times are harder, which means that they often pride themselves on an unbroken run of dividend rises that can last for many years.
Some trusts have a history of over 40 years of unbroken dividend growth, including the Foreign & Colonial Investment Trust, which has increased its dividend annually for 45 years.
