The income shares offering both growth and jam today

TL;DR

Sue Noka discusses how the Schroer Income Growth Investment Trust aims to deliver rising income for investors by balancing high-yield companies with future growth potential.

Transcript

hello and welcome to our latest Insider interview today in the studio I have with me Sue Noka for manager of the schroer income growth Investment Trust Sue thanks for coming in today delighted to be here so to kick off could you give us a run through of your investment process the trust aims to deliver a rising level of income so how did you go abo... Read More

Key Insights

• 💗 The investment process of the Schroer Income Growth Investment Trust involves constructing a balanced portfolio that delivers income and grows dividends in real terms.
• 💗 Despite high inflation, various companies in the oil, banking, and consumer discretionary sectors have managed to grow their dividends in double digits.
• 💗 The trust strikes a balance between delivering a market-beating dividend yield of around 5% and growing capital through a blend of high-yielding stocks and future growth opportunities.
• ✋ The portfolio includes high-quality businesses like Whitbread, Hollywood Bowl, Assur, and Legal & General, which offer value, growth prospects, and sustainable dividends.
• ✋ The trust is overweight in the consumer discretionary sector due to attractive valuations and strong franchises, while it is underweight in consumer staples due to high valuations and limited growth potential.
• 👣 The Schroer Income Growth Investment Trust has a remarkable track record of dividend growth, with the ability to utilize revenue reserves to maintain dividend payments in challenging times.

Questions & Answers

Q: How does the Schroer Income Growth Investment Trust achieve a rising level of income for investors?

The trust achieves a rising level of income by blending companies with high-yield but slow-growing dividends with companies that may not yield as much now but are expected to grow their dividends in the future.

Q: Can you provide examples of companies in the portfolio that have successfully grown their dividends despite high inflation?

Shell and BP in the oil sector, HSBC and Standard Chartered in the banking sector, as well as Whitbread and Hollywood Bowl in the consumer discretionary space, have all experienced significant dividend growth in the past two years.

Q: How does the trust strike a balance between delivering income and growing capital?

The trust follows a diversified portfolio construction approach, investing in companies with sustainable dividends and value opportunities, while also targeting future growth in higher-yielding stocks.

Q: What are some high-yielding stocks in the portfolio that offer value and sustainable dividends?

Assur, a property company specializing in GP patient practices, yields 8% with good growth prospects, and Legal & General, with its strong balance sheet and growth opportunities in pension liability outsourcing, yields 9% in today's market.

Summary & Key Takeaways

• Sue Noka explains that the investment process for the Schroer Income Growth Investment Trust involves constructing a portfolio that delivers an attractive level of income for investors while also growing dividend income in real terms.

• Various companies, including those in the oil, banking, and consumer discretionary sectors, have managed to grow their dividends in double digits despite high inflation levels.

• The trust strikes a balance between delivering a market-beating dividend yield of around 5% and growing capital through a blend of high-yielding stocks and future growth opportunities.