Schroder Income Growth continues to increase dividends- Schroder Income Growth Fund (SCF) has raised dividends by 5.4%, with total distribution of 11.8 pence per share. This was twice that of the 2.7% that was achieved by the Consumer Prices Index over the same period. This is in line with the objective of the Schroder income Growth to provide real growth of income, being growth of income in excess of the rate of inflation. Which has been achieved over the past 10 years the annual dividend has been increased by 36% compared to inflation which was risen 25%. The revenue per share fell by 3.8% which is because fewer special dividends were issued. The reason for the fewer special dividends was because a large amount of dollar-denominated dividends were issued last year when dollar was weak. The increase in dividends will still occur thanks to a large revenue reserves which will cover next years dividends. Schroder’s net asset value rose by 4% in terms of total returns.
They also are reminding investors that they will lowering their management fees you can read more about that here.
The manager had this to say about the funds performance over the past year, “The company’s (Schroder Income Growth) outperformance against the Index reflected the twin benefits of positive sector allocation and the use of gearing in a rising market, offset to some degree by negative stock selection. Scandinavian bank Nordea was the top stock detractor. Share price weakness was in part a consequence of overruns in both time and costs of achieving efficiency savings relating to the company’s digital upgrade and move of headquarters from Stockholm to Helsinki. The resulting low valuation led to an opportunity for the holding to be increased. Software and IT company Micro Focus also weighed on relative returns with profit disappointment in the first quarter of 2018 resulting from integration issues following the significant acquisition of HP’s software business in mid-2017. Part of the portfolio’s holding had been sold in November last year, but after the price fall, the shares were bought again in July. Stock selection in financial services (NEX Group) was positive despite exposure to underperforming TP ICAP, which struggled to achieve its integration synergies. Both these companies were created after the demerger of long-term holding ICAP in late 2017, with NEX Group receiving a bid at a substantial premium from CME, the US exchange group, in the spring of 2018. The company benefited from a recovery in educational publisher Pearson’s share price from its lows of autumn 2017, as well as robust share price performances from luxury retailer Burberry (appointment of new creative director) and developer and infrastructure group John Laing (strong operating performance). Lastly, Smurfit Kappa rebuffed a bid approach from International Paper in part due to the strength of its operating performance.”
SCF-Schroder Income Growth continues to increase dividends