Questor: two more divi increases help keep our portfolio’s income up with inflation

The trust said occupancy of its shared ownership portfolio rose to almost 100pc while voids among its retirement homes fell to 7pc in the second half of its financial year, which was “in line with the pre-Covid-19 average”.

It said it had collected 99pc of rents due over the full year, a “resilient” figure “in line with normal economic conditions”. The trust is meeting our requirements to the letter. 

Questor says: hold

Ticker: RESI

Share price at close: 108.5p

Update: Schroder Income Growth

This fund too managed to raise its dividend in the financial year to the end of August, although only by 1.6pc to 12.8p from 12.6p.

As a trust that invests in shares it had to grapple with that same spate of dividend cuts that hit our own portfolio in the wake of the virus’s arrival, so we can forgive it for that figure. 

Last year too it restricted its divi increase to 1.6pc, but its record over the past 10 years gives us hope of better things in future: the dividend is about 40pc higher than in 2011, whereas to keep pace with inflation it only needed to rise by just over 20pc. The annual dividend has now risen for 26 consecutive years.

One of the reasons for our decision to hold on to Schroder Income Growth when we made all the other changes in spring last year was its large reserves, which investment trusts can build up in good times to support the dividend when things get tough.

The trust did call on those reserves to support this year’s dividend, but not by much: 94pc of the payment was covered by income received during the period, thanks to the recovery in dividends paid by its holdings.

It said its reserves remained “healthy” at £7.4m, which equates to about 84pc of the dividend paid this year. In other words, should further disaster befall us because of the virus or otherwise, future dividends can still be supported.

The trust increased its net asset value per share by 28.3pc over the year while total returns have comfortably beaten the FTSE All-Share index over the past decade. And the fund has become a little cheaper to own: the “ongoing charge” for the year to August was 0.79pc, compared with 0.86pc last time – the fifth consecutive annual fall.

This is another fund that’s punching its weight in our Income Portfolio. 

Questor says: hold

Ticker: SCF

Share price at close: 303p

Read the latest Questor column on telegraph.co.uk every Sunday, Tuesday, Wednesday, Thursday and Friday from 5am.

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