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Looking for a regular income? Over half of investment trusts pay dividends monthly

Joanna Faith
Written By:
Joanna Faith

Investors searching for a regular income may want to consider investment trusts, with more paying monthly dividends than ever before.

More than half (54%) of income-paying trusts now pay quarterly dividends, up from 50% last year and 46% in 2017, according to the Association of Investment Companies.

Out of 249 income-paying investment trusts, 134 pay dividends on a quarterly basis.

The number of trusts paying dividends twice a year has risen to 28% from 26% in both 2018 and 2017.

Just 16% pay dividends annually, down from 21% in 2018 and 23% in 2017.

Annabel Brodie-Smith, of the Association of Investment Companies (AIC), said: “Getting a more regular income will be a reassurance, particularly for investors who rely on their investments to support their cost of living, whether that’s help with the gas bill, the weekly shop or to fund an enjoyable lifestyle in retirement.”

Research published last week revealed that 31 trusts that invest in the stock market have a dividend yield of 4% or higher, an increase from 28 three months ago.

Among the top payers are Henderson Far East Income, European Assets and Henderson High Income, which have dividend yields of 6.3%, 5.8% and 5.6% respectively.

For investors looking for a more vanilla equity income fund, Merchants Trust has the highest yield in the sector at 5.4%.

The report by broker Stifel highlighted a number of high yielding trusts investing in sectors and regions outside the UK.

BlackRock World Mining and BlackRock Commodities Income trusts, for example, pay 5.5% and 5.6% respectively.

Meanwhile, Ecofin Global Utilities & Infrastructure has a yield of 4.8%, while the International Biotechnology fund pays 4.5%.