Invesco Income Growth (IVI) is a cautiously-managed portfolio of UK equities, which aims to produce above inflation dividend growth but also capital growth in excess of the FTSE All Share.
The manager, Ciaran Mallon, focuses on fundamental company research, and looks to invest in companies with a strong record of capital allocation and concern for minority shareholders’ interests. Ciaran has a slight value bias to his fundamentally driven bottom-up stock picking and sits in the well-resourced and highly-rated UK equities team based in Henley with whom he shares ideas.
Despite the difficult environment 2018 brought for equities, mainly due to threats of a trade war, rising interest rates in the US, and the continuous uncertainty surrounding Brexit, the trust performed strongly relative to peers. IVI outperformed both the UK Global Equity Income sector and the IA UK Equity Income sector, whilst staying in line with the FTSE All Share. This turnaround of performance has continued into 2019, and since the start of the year the trust has delivered 6.4% NAV returns, outperforming the peer group (6.1%), the OE peer group (4.4%) and only marginally less than the benchmark (7.2%).
Alongside the strong NAV performance, the trust continues to yield 4.2% and has the distinction of increasing its dividend in each of the last 20 years. Ciaran is fully committed to continuing this record, and places great importance on the sustainability of the earnings and dividends on the companies he buys.
The trust remains trading on a double-digit discount, presently sitting at c.15%. This is wide relative to the rest of the sector, where the weighted average discount is 3.2%.