2 cheap investment trusts with 45+ years of consecutive dividend increases

These two investment trusts have impressive dividend growth track records.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

In an expensive market like this, it’s hard to find reliable income investments which offer attractive returns. With this in mind, today I’m going to take a look at two investment trusts which have enticing dividend track records and trade at discounts to their net asset values (NAVs).

Global equities

The Brunner Investment Trust (LSE: BUT) is one such fund. With shares trading at a discount of 12% against its net asset value per share of 844p, prospective investors have the opportunity to pick this global equities trust for less than the sum of its parts.

This doesn’t seem like a big discount in comparison to some other trusts, but it does look unwarranted given that the fund owns a highly liquid portfolio of global equities and has a relatively low ongoing charges ratio of 0.73%.

Passive income stocks: our picks

Do you like the idea of dividend income?

The prospect of investing in a company just once, then sitting back and watching as it potentially pays a dividend out over and over?

If you’re excited by the thought of regular passive income payments, as well as the potential for significant growth on your initial investment…

Then we think you’ll want to see this report inside Motley Fool Share Advisor — ‘5 Essential Stocks For Passive Income Seekers’.

What’s more, today we’re giving away one of these stock picks, absolutely free!

Get your free passive income stock pick

Capital and dividend growth

The fund aims to provide its investors with both capital growth and growing dividends by investing in companies all over the world, seeking out opportunities for growth and reliable dividends wherever they may be. It has 45 years of consecutive years of dividend increases under its belt, giving it one of the strongest track records of dividend growth in the investment companies sector.

With a portfolio of 74 stocks, Brunner has a well-balanced portfolio, with no sector accounting for more than a quarter of its total asset value. Big positions include Royal Dutch Shell (3.1%), Microsoft (3%), Abbvie Inc (3%), UnitedHealth (2.9%), and BP (2.2%).

Multi-manager strategy

Alliance Trust (LSE: ATST) has an even longer track record of boosting shareholder payouts, with 50 years of consecutive dividend growth. That’s an impressive feat, but what really sets it apart from its peers is its unusual investment strategy.

After years of lagging investment returns, the company has shaken up in its strategy by adopting a new multi-manager model. Although there are a few other investment companies which also utilise a multi-manager approach, they tend to suffer from closet tracking and high costs.

Alliance Trust intends to overcome flaws in the traditional multi-manager model, by targeting ongoing charges ratio at below 0.65% — less than half the typical ongoing charges figure for a multi-manager fund. It also intends to avoid over-diversification, which brings closet tracking, by hiring external managers to select only high-conviction picks with specific investment objectives, reducing its likelihood of generating index-hugging performances.

Investment performance

It’s too early to see whether this change in its investment strategy would deliver outperformance for shareholders over the long term. So far though, the results are encouraging. The fund reported a net asset value total return of 11.8% since the change in strategy in April 2017. This compares favourably against the 8.2% return from its MSCI All Country World Index benchmark over the same period.

Alliance Trust currently trades at 6% discount against its NAV, with shares in the fund yielding 1.7%.

This AI stock is becoming a digital juggernaut in a £ 12.5 billion market!

🤖 Curious about the next big player in AI? 🤖

Our leading industry analysts have uncovered a trailblazing content platform that's revolutionising the industry with its unparalleled generative AI technology, setting new standards in creativity and efficiency.

Care for a sneak peek?

Trusted by global giants like Amazon, Disney, and Netflix, this innovative company is not just transforming digital media with AI-generated 3D content but is also capturing a significant share of a £12.7 billion market!

With a remarkable 62% gross margin, indicating exceptional profitability and operational efficiency, this company's growth trajectory positions it as a must-watch for savvy investors.

Best of all, we're offering exclusive access to the name of this game-changing stock, absolutely free!

Discover your free AI stock pick

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Jack Tang has no position in any shares mentioned. The Motley Fool UK has recommended BP and Royal Dutch Shell B. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

At $184, I reckon this S&P 500 juggernaut is still on sale

Our writer sees Amazon (NASDAQ:AMZN) as an attractive S&P 500 stock to consider while it is priced 23% lower than…

Read more »

Investing Articles

Cheap FTSE 250 shares to consider buying right now?

These FTSE 250 growth stocks had weak starts to 2025, and face short-term uncertainty. But their long-term valuations could be…

Read more »

Investing Articles

As stocks dive, is this a rare chance for ISA investors to build generational wealth?

Globally, stocks have pulled back significantly following the announcement of tariffs by the US president. Is this an opportunity for…

Read more »

Investing Articles

2 ultra-cheap shares to consider right now!

These cheap UK shares offer considerable growth and income potential over the long term, reckons our writer Royston Wild.

Read more »

Investing Articles

Legal & General Group shares go ex-dividend on 24 April – time to grab that 9% yield?

Harvey Jones holds Legal & General Group shares and is already looking forward to the next bumper dividend from this…

Read more »

Young female analyst working at her desk in the office
Investing Articles

3 FTSE 100 dividend stocks to consider buying while they’re on sale

Paul Summers reckons canny investors should think about snapping up quality, dividend-paying stocks while they're going cheap

Read more »

Investing Articles

2 cheap passive income shares to consider buying right now

The passive income we can earn from the UK stock market looks set to climb this year, and could even…

Read more »

Investing Articles

Down 15% in a month, this FTSE 100 dividend share offers investors a stunning 10.8% yield

Harvey Jones plucks out a FTSE 100 dividend share that offers frankly a quite staggering yield and is now a…

Read more »