More than just income – income with growth | Janus Henderson Investment Trusts

More than just income – income with growth

Reliable income doesn’t have to mean standing still. Explore how investment trusts can help your portfolio grow over time.

If you’re aiming for income today and growth tomorrow, you’re thinking like a long-term investor. Whether you’re planning for retirement, topping up a pension, or simply trying to make your money work harder, steady income is often the foundation of a long-term strategy. But income doesn’t have to mean ‘flat’, and this is where investment trusts can really shine.

Income that’s built to last

Investment trusts have long been used by investors who want more than just payouts – they want reliability, discipline, and the chance for those payouts to grow.

Many investment trusts don’t just aim to deliver income – they aim to grow it year after year. All our income focused investment trusts have long track records in growing their dividends, most even during rough patches like the 2008 financial crisis and the more recent Covid-19 pandemic.

How it works: Smoothing the ride

Here’s one of the key features that sets investment trusts apart: they can hold back income in good years and use it to support dividend in tougher ones. That’s not something open-ended funds can do – they’re required to pay out everything they receive each year.

This “smoothing” mechanism helps investment trusts keep dividends steady – and often growing – even when markets wobble. It’s not magic, it’s just smart structuring backed by a long-term mindset and disciplined management.

Growth by design

That structure, and careful stock selection, has helped create what the Association of Investment Companies (AIC) calls “Dividend Heroes” – a group of investment trusts that have increased their dividends for 20 years or more.

The City of London Investment Trust (CTY) tops the list with 59 years of uninterrupted dividend growth. And while the annual increases might seem modest, they’ve added up over time, often outpacing inflation.

Our other income focused investment trusts – The City of London Investment Trust (CTY), Henderson Far East Income (HFEL), Henderson High Income (HHI), Lowland Investment Company (LWI), and The North American Income Trust (NAIT) – are building similar track records. Henderson High Income (HHI), for example, has raised its dividend for ten years in a row, growing payouts at a compound rate of approximately 2% a year. These “Next Generation Dividend Heroes” have increased their dividends for at least ten years, but less than 20, making them rising stars among investment trusts.

Even more powerful in a tax wrapper

Wrap these income-generating investment trusts inside an Individual Savings Account (ISA), a Self-Invested Personal Pension (SIPP), or Junior ISA, and the benefits can compound even further.

In an ISA dividend income and gains are tax-free – great for retirees or anyone looking to boost their income without triggering extra tax.
In a Junior ISA, you’re setting up the next generation with long-term compounding machine.
And in a SIPP, you get upfront tax-relief, making it one of the most efficient long-term wrappers available.

Click here to explore ISA, SIPP and JISA basics with Janus Henderson Investment Trusts

Click here to find out more about our range of income focused investment trusts

Glossary

Dividend

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

Individual Savings Account (ISA)

An Individual Savings Account is a UK government-backed savings account that allows you to save or invest money without paying any tax on the interest, returns, or profits you make. Each tax year, you receive a personal ISA allowance, a set amount of money you can contribute to your ISA, keeping more of your earnings.

Inflation

The rate at which the prices of goods and services are rising in an economy. The consumer price index (CPI) and retail price index (RPI) are two common measures; the opposite of deflation.

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.

Junior ISA

A Junior ISA (JISA) is a tax-free savings and investment account for children under 18, allowing parents and guardians to save money for their child’s future.

Open-ended fund

An open-end fund is an investment vehicle that creates and redeems shares based on investor demand, pooling money into a diversified portfolio without a fixed share limit.

Portfolio

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

Self-invested personal pension (SIPP)

A Self-Invested Personal Pension, or SIPP, is a defined-contribution retirement plan offered to taxpayers in the United Kingdom.

These are the views of the author at the time of publication and may differ from the views of other individuals/teams at Janus Henderson Investors. 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.

Before investing in an investment trust referred to in this article, you should satisfy yourself as to its suitability and the risks involved, you may wish to consult a financial adviser. Please refer to the AIFMD Disclosure document and Annual Report of the AIF before making any final investment decisions. Tax assumptions and reliefs depend upon an investor’s particular circumstances and may change if those circumstances or the law change.

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.

The information in this article does not qualify as an investment recommendation.

There is no guarantee that past trends will continue, or forecasts will be realised.

Marketing Communication.

Glossary

Important information

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

Specific risks

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.
Using derivatives exposes the Company to risks different from - and potentially greater than - the risks associated with investing directly in securities. It may therefore result in additional loss, which could be significantly greater than the cost of the derivative.
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.

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. Henderson Far East Income Limited is a Jersey fund, registered at Liberté, 19-23 La Motte Street, St Helier, Jersey JE2 4SY and is regulated by the Jersey Financial Services Commission] Ref: 34V

Specific risks

The Company has significant 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.
If a Company's portfolio is concentrated towards a particular country or geographical region, the investment carries greater risk than a portfolio that is diversified across more countries.
The portfolio allows the manager to use options for efficient portfolio management. Options can be volatile and may result in a capital loss.
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.
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.

Specific risks

If a Company's portfolio is concentrated towards a particular country or geographical region, the investment carries greater risk than a portfolio that is diversified across more countries.
Some of the investments in this portfolio are in smaller company shares. They may be more difficult to buy and sell, and their share prices may fluctuate more than those of larger companies.
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.
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.

Specific risks

If a Company's portfolio is concentrated towards a particular country or geographical region, the investment carries greater risk than a portfolio that is diversified across more countries.
Some of the investments in this portfolio are in smaller company shares. They may be more difficult to buy and sell, and their share prices may fluctuate more than those of larger companies.
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.

Specific risks

If a Company's portfolio is concentrated towards a particular country or geographical region, the investment carries greater risk than a portfolio that is diversified across more countries.
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.
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.

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