AIC bolsters information on investment trust dividends

The Association of Investment Companies has started publishing more detailed information about its members’ dividends, including whether they are paid from income or profits.

Reserves and dividend cover will also be published for each investment trust listed on the AIC website.

AIC chief executive Ian Sayers says the association wants to provide investors as much information as possible as demand for income remains strong.

“Paying dividends from capital profits is an additional income advantage of investment companies. It helps meet shareholder demand for income in this low interest rate environment and potentially can lead to investment companies being rerated to trade on lower discounts, another benefit for shareholders.”

UK investment trusts have had the ability to pay dividends from capital profits since a change to the tax rules in 2012.

Martin Currie Asia Unconstrained Trust chairman Harry Wells says shareholders voted in favour of increasing the dividend payment by introducing a distribution from capital, increasing the total annual dividend by 110 per cent from the previous financial year.

“The board believes that the new dividend policy benefits existing shareholders, whilst making the shares attractive to new buyers and appealing to retail investors, who will be able to participate in the potential for capital growth.”

This increased the total annual dividend by 110 per cent on the previous financial year.