3 Jul 2020 07:14
Invesco Income Growth Trust plc (IVI)
Results for financial year ended 31 March 2020
Results analysis from Kepler Trust Intelligence
Invesco Income Growth Trust (IVI) released its final results for the year ended 31 March 2020 this morning, reporting a fall in its NAV over the period of 17.3%. In share price terms the trust was down 13.6% over the period, insulating investors from some of the downside suffered by the NAV and the FTSE All-Share, which lost 18.5%, against a backdrop of very difficult markets for equity investors.
Shareholders in the trust were protected from the impact of cancelled dividends among many of the trusts' holdings in the final stages of Q1 2020, as the board moved to use the trust's extensive revenue reserve to support its dividend. Declaring a fourth interim dividend of [4.2p] which takes the total dividend up to 11.75p, ahead of its annualised inflation target, this marks the 23rd consecutive year of dividend increases, and maintains its status as an AIC 'dividend hero'.
Kepler View
Shareholders in IVI have benefited from the narrowing discount even as the trust's underlying NAV has fallen, and the board's decision to use revenue reserves to support the trust's dividend is of obvious merit to those who rely on this trust for a yield.
IVI is seen by its manager as a core UK equity income product, and fits this profile well. A track record of 22 years of dividend increases is a notable achievement, and the decision to continue to build revenue reserves in recent years is now bearing clear fruit for shareholders.
Whilte the manager's preference for running a 'safety first' equity portfolio will likely, at times, see IVI lag in particular circumstances…
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