Almost half of investment companies now pay quarterly dividends

AIC’s Annabel Brodie-Smith

Continued investor demand for income is being reflected in the growing number of investment companies paying out quarterly dividends.

According to the Association of Investment Companies (AIC), almost half of investment companies – or 46 per cent – are now paying out income on a quarterly basis, compared with just 17 per cent in 2010.

There are now 104 ‘conventional member companies’ paying a quarterly dividend to shareholders, a rise from 92 a year ago, or 43 per cent.

The number of companies paying a biannual dividend has come down from 30 per cent to 28 per cent since last year, while 23 per cent continue to pay a dividend on an annual basis.

Five investment companies are paying out dividends monthly: Ediston Property, F&C Commercial Property, Fair Oaks Income, SME Loan and TwentyFour Select Monthly Income.

AIC communications director Annabel Brodie-Smith says: “Investment companies have a number of income advantages, including the unique ability to hold back some of the income they receive to boost their dividends in tougher times.

“The closed-ended investment company structure also makes them particularly suitable for higher-yielding illiquid assets like property and infrastructure.

“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.”