Just under half (46%) of investment companies that pay a dividend now pay it quarterly, a big jump since 2010 when only 17% did so, while the number paying out bi-annually has fallen by around 2%.
The changes reflect a growing appetite for yield among investors with investment companies stepping up to meet demand, according to the AIC.
Just under a quarter of companies continue to pay an annual dividend, the same amount as in 2016, and five companies that pay a monthly dividend have continued to do so, namely Ediston Property, F&C Commercial Property, Fair Oaks Income, SME Loan and TwentyFour Select Monthly Income.
“[Investment companies] have the ability to hold back some of the income they receive to boost their dividends in tougher times,” noted Annabel Brodie-Smith, AIC communications director.
“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 is not surprising that the number of investment companies paying quarterly dividends has increased since last year to meet this demand.”
