Dunedin Income Growth (DIG)

[richfool]

I came across this Trustnet article praising DIG which may be of interest:

Only one UK equity investment trust has made a sector-topping return while taking on more risk than the market, the latest Trustnet study finds.

Dunedin Income Growth is the only top-rated trust to beat its rivals over three years, according to Trustnet data.

In our latest series, we compared investment trusts run by FE fundinfo Alpha Managers that had made top-quartile returns over the past three years and had a FE fundinfo Crown rating of four or five. Having previously looked at the global sectors, this week we cast our eye over the three UK sectors – IT UK All Companies, IT UK Equity Income and IT UK Smaller Companies.

We then used the FE fundinfo Risk Score – which measures a company’s volatility against the FTSE 100 over three years – to find the most risky trusts. Those with a score of more than 100 (the index’s score) were included.

Only Dunedin Income Growth made the grade. Managed by Alpha Manager Ben Ritchie and Georgina Cooper, the £487.5m trust has been under a recent transformation after shareholders voted to incorporate environmental, social and governance (ESG) principles into its objective.

This follows an evolution in recent years towards a greater focus on dividend growth at the expense of initial yield.

https://www.trustnet.com/news/13271844/ ... er-returns

https://www.hl.co.uk/shares/shares-sear ... st-ord-25p

I hold DIG amongst my UK G&I trusts.

[monabri]

Comparison to Merchants and Law Debenture.

All data from Hargreaves Lansdowne
https://www.hl.co.uk/funds/fund-discoun ... ion/charts

[richfool]

Thanks for those comparison figures, Monabri.

Noted, the HL figures are cumulative performance. I'm aware, in terms of dividend yield, DIG sits in the middle with Merchants yielding the highest and LWDB the lowest, of those three.

[johnstevens77]

Comparison to Merchants and Law Debenture.

All data from Hargreaves Lansdowne
https://www.hl.co.uk/funds/fund-discoun ... ion/charts

I first bought DIG in 2003 and topped up twice, Merchants Trust since 2010. Law Debenture is in process of being added to with spare dividend income.
DIG have done well since the new team took over but for many years before was sub par, I kept them for the steady yield though. The first invetment into DIG was with certificates, I would like to bed and ISA but the capital gain is a problem so I concentrated investing new cash in ISA's instead.
I run two portfolios, mine and my wife's and take every opportunity to bed and spouse to use up the CG allowance, DIG will be bed and isa'd next tax year.
I started investing as an expat so Isa's were unavailable to us at that time and when I retired in 2008, the ISA allowance was not very generous and I came home with a wad of cash.

john

[Dod101]

I came across this Trustnet article praising DIG which may be of interest:

Only one UK equity investment trust has made a sector-topping return while taking on more risk than the market, the latest Trustnet study finds.

Dunedin Income Growth is the only top-rated trust to beat its rivals over three years, according to Trustnet data.

In our latest series, we compared investment trusts run by FE fundinfo Alpha Managers that had made top-quartile returns over the past three years and had a FE fundinfo Crown rating of four or five. Having previously looked at the global sectors, this week we cast our eye over the three UK sectors – IT UK All Companies, IT UK Equity Income and IT UK Smaller Companies.

We then used the FE fundinfo Risk Score – which measures a company’s volatility against the FTSE 100 over three years – to find the most risky trusts. Those with a score of more than 100 (the index’s score) were included.

Only Dunedin Income Growth made the grade. Managed by Alpha Manager Ben Ritchie and Georgina Cooper, the £487.5m trust has been under a recent transformation after shareholders voted to incorporate environmental, social and governance (ESG) principles into its objective.

This follows an evolution in recent years towards a greater focus on dividend growth at the expense of initial yield.

https://www.trustnet.com/news/13271844/ ... er-returns

https://www.hl.co.uk/shares/shares-sear ... st-ord-25p

I hold DIG amongst my UK G&I trusts.

I do not wish to be controversial but if Dunedin is taking on more risk than the market then surely we ought to expect it to have a better outcome.

'Only Dunedin made the grade' the item tells us. Made what grade? As one of the most risky trusts?

Its results were not bad to 31 January 2021 in a year when it was very difficult for all investors.

It holds all the usual UK suspects plus a number of interesting overseas holdings and has a long and illustrious history in the Scottish IT sector for most of its life.

Dod

[richfool]

I must admit I was a bit puzzled by the comment about DIG taking on more risk, as I would normally take the view that a trust in the G&I sector paying a higher dividend yield is likely to be riskier than a trust paying a lower yield, (growth and specialist trusts excluded). As I understood DIG to be targetting lower yielding stocks with good income growth prospects so I would see those as lower risk.

Of the trusts in the comparison, I would see Merchants and LWDB both as higher risk trusts than DIG. MRCH because of its holdings of oilies, banks and tobacco and pursuit of high yield; and LWDB because of its more aggressive growth focus and riskier bets. LWDB is also the most volatile.

But then maybe I'm barking up the wrong trees, or cross-pollinating them, and am quite wrong.

[Dod101]

I must admit I was a bit puzzled by the comment about DIG taking on more risk, as I would normally take the view that a trust in the G&I sector paying a higher dividend yield is likely to be riskier than a trust paying a lower yield, (growth and specialist trusts excluded). As I understood DIG to be targetting lower yielding stocks with good income growth prospects so I would see those as lower risk.

Of the trusts in the comparison, I would see Merchants and LWDB both as higher risk trusts than DIG. MRCH because of its holdings of oilies, banks and tobacco and pursuit of high yield; and LWDB because of its more aggressive growth focus and riskier bets. LWDB is also the most volatile.

But then maybe I'm barking up the wrong trees, or cross-pollinating them, and am quite wrong.

It's these academics again.I tend to ignore this sort of comment. Certainly surely in the normal accepted meaning of the word 'risk' their UK holdings are not very high on the risk scale. It actually looks like a good middle of the road IT to me but that is because I do not follow the views of academics.
Maybe someone can explain.

Dod