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Look beyond the UK when it comes to income


The Bankers Investment Trust PLC

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The making of a dividend hero

The Bankers Investment Trust has achieved 56 years of dividend growth thanks to a global, diversified and differentiated approach.

A ‘dividend hero’ isn’t just a trust that pays an attractive dividend today. Rather, it is a trust that pays consistent dividends over the long term. The Bankers Investment Trust has achieved the latter, paying a dividend to shareholders every year for the past 133 years. This means we haven’t missed a dividend despite two world wars, two major global pandemics and many market crashes to name just a few obstacles. We have even increased the trust’s dividend in each of the past 56 years, growing on average at twice the rate of inflation, as measured by the CPI, in the UK.

This consistent desire to pay a dividend means we must continually seek new dividend-paying opportunities that fit the portfolio, ones that we can hold over the long term. We do this by looking far and wide for strong companies that are continually generating healthy cash flows.

Going global for income

With our global mandate, we are not geographically restricted. This not only widens our universe of investment opportunities but also means we can better diversify our risk exposure. We have six regional portfolios, or ‘sleeves’, in the trust, each with its own specialist fund manager who has substantial depth of knowledge of their specific markets.

North American equities are predominant in the portfolio, accounting for 39%, but the rest is quite evenly split. We have between 13% to 17% allocated to companies from each of Japan, the UK, Europe and Asia Pacific. Over the past few years, we have increased our US exposure, while simultaneously allocating away from UK and European names.

Being able to look further afield can provide the edge when seeking income. For instance, our 13% exposure to Japanese companies – including a top 10 holding in Toyota – has meant we could benefit from Japan’s newfound era of shareholder engagement, with numerous buybacks and dividends. This kind of exposure is of benefit as finding reliable dividend payers has become more challenging in popular locations such as the UK and Europe.

We are mindful that the performance of our US equity market exposure is starting to look stretched. The post-pandemic reopening boom is fading, with US retail sales declining, bank lending conditions tightening to recessionary levels and high valuations relative to history. Fortunately, for holders of high-quality US stocks like ourselves, evidence suggests that these kinds of stocks outperform when profit cycles decelerate as they have the cash-generating ability to maintain income during downturns and have attractive balance sheets that can provide a buffer in these periods.

Achieving income consistency

Our diversified, global approach doesn’t just mean we are able to mitigate risk but also helps us generate greater consistency with our dividend payments. We do not pay dividends out of capital, instead purely out of the earnings we receive from our companies. Importantly, our trust structure also means we can retain income in anticipation of challenging periods. The year following the Covid-19 pandemic was a challenging period to maintain dividends for even the strongest companies, but we were still able to pay an increased dividend through retained income.

Income consistency cannot be achieved through geographical diversification alone, so it’s important to have exposure to a range of sectors. In technology, we have investments in areas such as semiconductor manufacturing (KLA Tencor and TSMC), AI (Microsoft) and networking (Cisco) and this gives us good coverage of the fast-evolving trends dominating that space. Elsewhere, we are investing to help support an ageing population through healthcare companies, targeting dividend-paying companies such as Stryker, AstraZeneca and United Health that are at the forefront of innovation in that area.

In addition, although we have allocated away from industrial names due to margin and demand concerns, we are invested in the themes of electrification, re-shoring supply chains and decarbonisation. We do so via companies that are growing dividends, such as Rockwell Automation, Hitachi and Honeywell International.

Generating income today and tomorrow

The Bankers Investment Trust does not aim to grow dividends higher than inflation (measured by the Consumer Price Index) in every single year, but rather to secure income growth above inflation over the long term. This means every portfolio decision we make isn’t just for the dividend today, but for dividends tomorrow and beyond.

Our long-term view, and commitment to consistency, means we are on track to grow our dividend at a healthy rate for the current fiscal year. This is evident in our third interim dividend for the year to 31 October 2023 growing 10% from last year, an especially favourable position when UK CPI grew at 4.6% in the year to October 2023. We will continue to maintain a long-term view, targeting not just this year’s dividend but dividends for the next generation too.


Past performance does not predict future returns.


Balance sheet – A financial statement that summarises a company’s assets, liabilities and shareholders’ equity at a particular point in time. Each segment gives investors an idea as to what the company owns and owes, as well as the amount invested by shareholders. It is called a balance sheet because of the accounting equation: assets = liabilities + shareholders’ equity.

Capital – When referring to a portfolio, the capital reflects the net asset value of a fund. More broadly, it can be used to refer to the financial value of an amount invested in a company or an investment portfolio.

Consumer price index (CPI) – A measure that examines the price change of a basket of consumer goods and services over time. It is used to estimate inflation. ‘Headline’ CPI inflation is a calculation of total inflation in an economy, and includes items such as food and energy, where prices tend to be more volatile. ‘Core’ CPI inflation is a measure of inflation that excludes transitory/volatile items such as food and energy.

Diversification – A way of spreading risk by mixing different types of assets/asset classes in a portfolio, on the assumption that these assets will behave differently in any given scenario. Assets with low correlation should provide the most diversification.

Dividend – A variable discretionary payment made by a company to its shareholders.

Equity – A security representing ownership, typically listed on a stock exchange. ‘Equities’ as an asset class means investments in shares, as opposed to, for instance, bonds. To have ‘equity’ in a company means to hold shares in that company and therefore have part ownership.

Fiscal/Fiscal policy – Describes government policy relating to setting tax rates and spending levels. Fiscal policy is separate from monetary policy, which is typically set by a central bank. Fiscal austerity refers to raising taxes and/or cutting spending in an attempt to reduce government debt. Fiscal expansion (or ‘stimulus’) refers to an increase in government spending and/or a reduction in taxes.

Free cash flow (FCF) – Cash that a company generates after allowing for day-to-day running expenses and capital expenditure. It can then use the cash to make purchases, pay dividends or reduce debt.

Investment trust – An investment trust is a form of investment fund, specifically a publicly traded collective investment scheme that invests its shareholders’ money in the shares of other companies.

Net asset value (NAV) – The total value of a fund’s (or company’s) assets less its liabilities.

Portfolio – A grouping of financial assets such as equities, bonds, commodities, properties or cash. Also often called a ‘fund’.

Risk/risk taking – The acceptance of greater risk in exchange for potentially higher returns. This can apply to both individual investors and companies. An assessment of investors’ attitude to risk forms a fundamental part of identifying a suitable investment strategy for their objectives. For investment trusts: Risk taking is the key measure used to assess risk is volatility of returns, using historic net asset value (NAV) performance of the Company over 1 and 3 years. In this instance volatility measures how much a company’s NAV fluctuates over time in relation to the UK Equity market. The higher a volatility figure, the more the NAV has fluctuated (both up and down) over time. Please note that risk categorisations are indicative and based principally on historic data and should not be solely relied upon when making investment decisions.

Volatility – The rate and extent at which the price of a portfolio, security or index, moves up and down. If the price swings up and down with large movements, it has high volatility. If the price moves more slowly and to a lesser extent, it has lower volatility. The higher the volatility the higher the risk of the investment.


References made to individual securities do not constitute a recommendation to buy, sell or hold any security, investment strategy or market sector, and should not be assumed to be profitable. Janus Henderson Investors, its affiliated advisor, or its employees, may have a position in the securities mentioned.

Not for onward distribution. Before investing in an investment trust referred to in this document, you should satisfy yourself as to its suitability and the risks involved, you may wish to consult a financial adviser. This is a marketing communication. Please refer to the AIFMD Disclosure document and Annual Report of the AIF before making any final investment decisions. Past performance does not predict future returns. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested. Tax assumptions and reliefs depend upon an investor’s particular circumstances and may change if those circumstances or the law change. Nothing in this document is intended to or should be construed as advice. This document is not a recommendation to sell or purchase any investment. It does not form part of any contract for the sale or purchase of any investment. We may record telephone calls for our mutual protection, to improve customer service and for regulatory record keeping purposes.

Issued in the UK by Janus Henderson Investors. Janus Henderson Investors is the name under which investment products and services are provided by Janus Henderson Investors International Limited (reg no. 3594615), Janus Henderson Investors UK Limited (reg. no. 906355), Janus Henderson Fund Management UK Limited (reg. no. 2678531), (each registered in England and Wales at 201 Bishopsgate, London EC2M 3AE and regulated by the Financial Conduct Authority) and Janus Henderson Investors Europe S.A. (reg no. B22848 at 2 Rue de Bitbourg, L-1273, Luxembourg and regulated by the Commission de Surveillance du Secteur Financier).

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Important information

Please read the following important information regarding funds related to this article.

Before investing in an investment trust referred to in this document, you should satisfy yourself as to its suitability and the risks involved, you may wish to consult a financial adviser. This is a marketing communication. Please refer to the AIFMD Disclosure document and Annual Report of the AIF before making any final investment decisions.
    Specific risks
  • Higher yielding bonds are issued by companies that may have greater difficulty in repaying their financial obligations. High yield bonds are not traded as frequently as government bonds and therefore may be more difficult to trade in distressed markets.
  • The portfolio allows the manager to use options for efficient portfolio management. Options can be volatile and may result in a capital loss.
  • Global portfolios may include some exposure to Emerging Markets, which tend to be less stable than more established markets. These markets can be affected by local political and economic conditions as well as variances in the reliability of trading systems, buying and selling practices and financial reporting standards.
  • Where the Company invests in assets that are denominated in currencies other than the base currency, the currency exchange rate movements may cause the value of investments to fall as well as rise.
  • This Company is suitable to be used as one component of several within a diversified investment portfolio. Investors should consider carefully the proportion of their portfolio invested in this Company.
  • Active management techniques that have worked well in normal market conditions could prove ineffective or negative for performance at other times.
  • The Company could lose money if a counterparty with which it trades becomes unwilling or unable to meet its obligations to the Company.
  • Shares can lose value rapidly, and typically involve higher risks than bonds or money market instruments. The value of your investment may fall as a result.
  • The return on your investment is directly related to the prevailing market price of the Company's shares, which will trade at a varying discount (or premium) relative to the value of the underlying assets of the Company. As a result, losses (or gains) may be higher or lower than those of the Company's assets.
  • The Company may use gearing (borrowing to invest) as part of its investment strategy. If the Company utilises its ability to gear, the profits and losses incurred by the Company can be greater than those of a Company that does not use gearing.
  • If the Company seeks to minimise risks (such as exchange rate movements), the measures designed to do so may be ineffective, unavailable or negative for performance.
  • All or part of the Company's management fee is taken from its capital. While this allows more income to be paid, it may also restrict capital growth or even result in capital erosion over time.