CT UK Capital and Income has changed its name to CT Progressive Income (with an unchanged ticker of CTUK) as it looks to raise its profile with a new target of paying dividends ahead of inflation.
The £327m, 3.7%-yielding investment trust is an Association of Investment Companies’ “dividend hero” having consistently increased its pay-outs each year since launch in 1992.
While the rebranding does not signal a change in investment objective, policy or its focus on reliable income stocks, chair Nicky McCabe said: “Progressive Income means an income stream that we aim to grow over time. We intend to continue building on our record of annual dividend increases, with the ambition that his growth should be greater than inflation.”
In May the trust raised half-year dividends by 5.1% to 6.2p per share, ahead of consumer price inflation of 3.4%. However, over five years its dividends grew by an average of 2.5%, according to AIC data, below CPI inflation of 5.2%.
With reserves of just over £150m, at the time it was confident of achieving a 33rd annual increase in dividends this year. Although the quarterly distributions were just 90% covered by investment income, a higher level of income was expected in the second half.
Dominic Younger, who succeeded Julian Cane as lead manager at Columbia Threadneedle in January, is under some pressure to improve performance as the trust’s 32% total shareholder return over five years trails the UK Equity Income sector average of 60.1% and the FTSE All-Share’s 68%.
In the interims, CTUK said Younger had overseen “an evolution” of the value-style portfolio which he was seeking to balance with out-of-favour stocks at different stages of strategic turnarounds.
Short-term relative performance has so far not improved, however, with the portfolio up 1% and 10% over six months and a year against the All-Share’s gains of 3% and 18%. The shares stand on a 4.9% discount to net asset value.
By contrast, value-style rivals such as City of London (CTY), Law Debenture (LWDB), Merchants (MRCH) and Temple Bar (TMPL) have done better, up 5%-11% over six months and 22%-26% over one year. Temple Bar has the best five-year performance with a total shareholder return of 139%.
You’ve read the news. Now have your say. Which investment trusts, fund managers and ETFs deserve to win? You decide in the Investors’ Choice Awards 2026. Vote now.
