Key insights
- Julian Cane, who has been the manager since 1997, invests in companies he strongly believes in
- The trust has paid out a higher dividend every year since its launch in 1992, illustrating its resilience and underpinning its total return*
- Looking forward, while UK equities have been rallying in 2024 it is best to buy for the long term
In a history that’s worth celebrating, CT UK Capital and Income Investment Trust is over 30 years old. For most of that time, the trust has been managed by the same man: Julian Cane, the Portfolio Manager since 1997, who has invested with conviction for the best part of three decades.
Julian has a carefully executed management style that sees him invest in relatively few of the largest companies in the FTSE All-Share Index. This is simply because he is a fiercely selective investor, seeking out high-quality companies with capable management and attractive valuations.
He finds more of these characteristics among mid-sized companies. For instance, just 8% of the Trust comprises the biggest companies in the FTSE All-Share Index with valuations of more than £100bn, compared with the index’s weighting of approximately 20%.[1] By contrast, the trust has a very high weighting of more than 40% in smaller companies with valuations of £0-5bn, compared with the index’s just over 20%.
A dividend hero
For investors, Julian’s high-conviction style has allowed the trust to pay out an increased dividend in every one of its 30-plus years, earning the accolade of ‘Dividend Hero’ from the Association of Investment Companies*.
That means if you had invested £1,000 in 1992, you would have received a total of £2,376 in dividends—as well as seeing your initial investment appreciate. For comparison, the broad-based UK FTSE All-Share Index would have paid £1,076 in dividends over this time and a savings account matching the Bank of England base rate £1,132.
It’s a record Julian is proud of. “Dividends from the stock market chop and change but our own dividends to our shareholders have gone up each and every year,” he explains. “Think back over time through the crisis of the 2000 TMT (telecom, media and tech) boom, dividends from the market fell; they also fell in 2008 with the financial crisis; and then they fell in Covid-19 as well.”
The emphasis in the trust’s name on capital and income gives a clue as to why dividends are so important. Over the past five years, the trust’s net asset value has risen by 31.55%, with more than two thirds of that rise coming from dividends received from its underlying investments [2]. They stabilised the trust’s returns at a volatile time when its capital returns faced headwinds due to successive crises such as Covid-19 and the Ukraine war.
CT UK Capital and Income Investment Trust 5 year dividend performance- pence per share
2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
March | 2.55 | 2.65 | 2.65 | 2.65 | 2.75 | 2.85 |
June | 2.55 | 2.55 | 2.60 | 2.65 | 2.75 | 2.85 |
September | 2.55 | 2.55 | 2.60 | 2.65 | 2.75 | |
December | 3.75 | 3.75 | 3.75 | 3.85 | 3.90 | |
Total | 11.40 | 11.50 | 11.60 | 11.80 | 12.15 |
There is no guarantee that dividends will continue to increase
Time in the market
In the first half of 2024, UK stocks such as those selected by Julian have been boosted by improving sentiment. But it’s hard to predict how long this will last, meaning that it’s advisable for investors in the trust simply to hold it for the long term, seeking to take advantage of Julian’s steady investment approach.
“It’s very much time in the market rather than trying to time the market that counts,” he remarks.
Investment risks
The value of your investments and any income from them can go down as well as up and you may not get back the original amount invested. There is no guarantee that dividends will continue to increase.
Gearing is used for investment purposes to obtain, increase or reduce exposure to an asset, index or investment. The use of gearing can enhance returns to investors in a rising market, but if the market falls the losses may be greater.
Invest now
Columbia Threadneedle offer a range of Savings Plans designed to make investing easy.
Start from £25 a month or one off £100, and there are no charges when you deal using our Investor Portal.
Other ways to invest with us
There are a number of ways to invest with Columbia Threadneedle, through a Financial Adviser or a wide range of companies.
All intellectual property rights in the brands and logos above are reserved by respective owners.
Information in this section of the Website is directed solely at persons who are located in the UK and can be categorised as retail clients. Nothing on this website is, or is intended to be, an offer, advice, or an invitation, to buy or sell any investments. Please read our full terms and conditions and the relevant Key Information Documents (“KID”) before proceeding further with any investment product referred to on this website. This website is not suitable for everyone, and if you are at all unsure whether an investment product referenced on this website will meet your individual needs, please seek advice before proceeding further with such product.
