How we find high-quality shares that deliver resilient income

TL;DR

Deden Income Growth Investment Trust invests in UK and European companies to achieve attractive total returns and growing dividends while following a sustainable investing approach.

Transcript

hello and welcome to our latest Insider interview today in the studio I'm joined by Rebecca mlan co- for manager of the deden income growth Investment Trust Rebecca thank you for your time today it's a pleasure to be here so Rebecca could you firstly explain how the investment trust invests predominantly focused on the UK and the aim is for deliver... Read More

Key Insights

• 🏤 Deden Income Growth Investment Trust focuses on concentrated investments in UK and European companies for attractive total returns and dividend growth.
• 🧑‍🏭 Sustainable investing is an integral part of the trust's approach, considering environmental, social, and governance factors for each company in the portfolio.
• ✋ Companies like Games Workshop and Total exemplify the trust's strategy of investing in high-quality companies with sustainable growth prospects.
• 🈹 The trust achieves its dividend yield through a combination of trading at a discount, writing options, and selecting resilient income-paying companies.
• 😫 Exposure to overseas markets allows the trust to expand its opportunity set and invest in unique businesses and market segments.
• 🥹 The trust's concentrated portfolio of 36 holdings is designed to maximize returns by focusing on high-conviction ideas.
• 🥹 Dividend sustainability is supported by revenue reserves, a strong capital position, and a track record of holding or growing dividends for the past 43 years.

Questions & Answers

Q: How does Deden Income Growth Investment Trust strike a balance between delivering growth and income?

The trust focuses on investing in high-quality and sustainable companies that can grow through economic cycles, such as Games Workshop. It looks for companies with strong competitive positions, loyal customer bases, and strong operational practices, which support dividend growth.

Q: Does the trust have exposure to growth companies with low dividend yields?

Yes, the trust includes companies like Games Workshop, which has seen dividend growth of over 20% annually and offers a dividend yield higher than the market average. These companies are chosen based on their ability to deliver attractive total returns and sustainable earnings growth.

Q: How does the trust approach sustainable investing?

The trust applies a negative screen to reduce exposure to sectors and businesses facing high sustainability risks, such as tobacco and defense. It categorizes companies as leaders or improvers based on their best-in-class practices or their positive momentum in managing environmental, social, and governance factors.

Q: How does the trust achieve a 5% dividend yield despite not investing in certain sectors?

The trust trades at a discount to its net asset value (NAV) and writes options on the portfolio to generate additional income. While the dividend yield is comparable to the market on an underlying basis, the trust focuses on a diverse set of resilient income-paying companies that are less economically sensitive.

Summary & Key Takeaways

• Deden Income Growth Investment Trust has a concentrated portfolio of 36 high-quality holdings to generate attractive total returns and dividend growth.

• The trust aims to invest in resilient income-paying companies that are not heavily influenced by economic cycles or commodity prices.

• A sustainable investing approach is followed, considering how companies manage environmental, social, and governance factors.