After all the dividend cuts our Income Portfolio suffered last year it’s a relief to be able to report an increase – and a substantial one at that. Regional Reit is the holding we have to thank for this welcome news.
It said on Wednesday that it would pay a divi of 1.6p for the first quarter of the year, compared with the 1.5p it paid in each of the last three quarters of 2020. In the first quarter of last year it paid 1.9p but then announced a cut, as we reported in August.
Last year it also abandoned its previous practice of paying more in the final quarter. The result was a total divi of 6.4p for the year to December 2020, a fall of 22.4pc compared with the total of 8.25p paid the year before.
Managers expect strong performance from Claverhouse’s British stocks
Credit: Jim Dyson /Getty Images
Reserves that could be used to support the trust’s dividend during the pandemic were behind our decision a year ago to add JP Morgan Claverhouse to our Income Portfolio at the expense of Invesco Income Growth. Its annual report, published last month, gave us an update on the state of those reserves.
The trust said that, following payment of the fourth quarterly dividend, its reserves would amount to £15.8m or 27.1p per share. This compared with £19.6m or 34.4p a share in 2019.
The total dividend for 2020 was 29.5p, up from 29p, as we have reported previously. So the current reserves would be enough to pay 92pc of the next annual dividend if it was left unchanged.
Questor: Caledonia has stretched its dividend record but the 25pc discount won’t budge
Questor investment trust bargain: this fund’s persistent markdown has failed to narrow but it remains a solid long-term choice
29 April 2021 • 5:00am
The late Sir James Cayzer sat for many years on the board of Caledonia Investments, which was set up to manage the shipping dynasty s wealth
Credit: Marina Imperi
Few investment trust discounts are as stubborn as the one that has clung like a limpet to shares in Caledonia, the multi-asset fund tipped by this column almost four years ago.
Then, we highlighted Caledonia’s 18pc discount, which belied its elite status as one of just four trusts to have grown its dividend for 50 consecutive years. Now, even though it has lengthened that record to 53 years, the discount has widened to 25pc.
The new year has not brought the happiest of headlines for Ground Rents Income, the investment trust Questor tipped in May last year. The Government’s announcement this month of plans to give homeowners in leasehold properties the right to extend their leases by 990 years, at zero “ground rent”, has sent shares in the fund sliding.
Investors have unsurprisingly judged the announcement not to be good news for a fund that derives its income from those very ground rent payments. The shares have fallen to 63p, 16.9pc below the 75.8p at which we tipped them. They now stand at a 41pc discount to their 106.7p net asset value.