Fund Profile


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Dunedin Income Growth Investment Trust (DIG) is a trust within the UK Equity Income sector that has undergone significant evolution over recent years. The objective to grow income and capital from a portfolio of mainly UK listed companies was supplemented in June 2021 with the requirement for trust holdings to meet the board’s sustainable and responsible investing criteria, making DIG the only trust amongst its peers with an explicit ESG mandate (the criteria are laid out in detail in the ESG section).

The inclusion of sustainability criteria has doubled down the focus on quality-growth that has been in place since 2016, with the lead manager Ben Ritchie pivoting DIG away from a more conventional UK equity income strategy (depending on high yielding but lower growth companies such as high street banks and oil majors) towards buying companies with better long term prospects. As discussed in Portfolio, this has resulted in a meaningful tilt towards mid and small cap companies versus the trust’s benchmark. The focus on quality also dovetails with a high conviction approach to portfolio construction, DIG being one of the most concentrated trusts in the sector.

Despite the greater focus on dividend growth rather than maximising yield, DIG currently yields c. 4.3%, a substantial premium over the FTSE All-Share Index yield of 3.2%. As noted in the Dividend section, DIG’s pay-out has now grown in 38 of the last 42 financial years (and been maintained in the other four years).

The recent inflationary rally in commodity prices has been a short term headwind to relative performance for DIG, however, the Discount remains near par. The combination of the focus on quality growth, good yield, the explicit commitment to responsible investing, and low cost (DIG’s OCF is 0.59%) appears to have a strong appeal.

Analyst's View

Some might consider the UK Equity Income sector to be somewhat staid. In our opinion, DIG is a trust that might change this view, bringing an innovative and fresh approach to the sector. This is most obvious with the pioneering adoption of ESG investing. However, the high conviction, highly concentrated investment portfolio is also breaking the mould: as at 28/02/2022, DIG held 38 stocks compared to the sector average of 67 holdings. The high active share, quality-growth and mid and small-cap tilted portfolio all point to DIG trying to deliver significantly more to its investors than just a dependable yield (which it certainly has).

DIG’s highly concentrated strategy raises the relative risk, but this is moderated by a cautious approach to Gearing, a preference for stocks with defensive characteristics and portfolio construction that dampens down unnecessary stylistic risks. Although DIG’s relative performance will likely suffer in the short run if low-scoring ESG stocks rally (as has happened recently with the inflationary rally in commodity prices and the subsequent outperformance of miners), for investors with a longer-term time horizon and the belief that higher-quality companies will re-establish their market leadership, the combination of an attractive current yield, capital growth potential, long track record of dividend growth, ESG awareness and cost-effectiveness could make DIG appealing.


  • Offers an attractive dividend yield pick-up versus the wider UK market
  • Only UK Equity Income trust with explicit ESG mandate
  • Cost effective with a low OCF of 0.59%


  • ESG exclusions will result in underperformance if poorly rated ESG stocks and sectors rally
  • Some recent turn-over in the management team
  • Trading near par so little opportunity for discount narrowing
Continue to Portfolio
2024 Kepler Growth Rated Fund

This trust has been awarded a rating by Kepler Trust Intelligence for growth... Find out more

Fund History

26 Jan 2024 Fund Analysis
DIG outperformed the index over 2023 and continues to differentiate itself from peers…
17 Jan 2024 Top of the Pops
We reveal the winners of our investment trust ratings for 2024…
13 Dec 2023 In-come all ye faithful
Equity income could be a beneficiary of the higher interest environment, with trusts a good way to capture it…
16 Jun 2023 Fund Analysis
DIG offers several differentiating features which help it stand out in a competitive peer group…
26 May 2023 Finding the best UK stocks for income, with Dunedin Manager Rebecca Maclean - Podcast: Trust Issues #16
We talk valuations, European stocks, options writing and UK M&A...
01 Feb 2023 Go your own way
Our analysis shows that investment trusts offer better diversification for those seeking income from equities...
20 Oct 2022 Fund Analysis
DIG offers a differentiated approach to income investing...
27 Apr 2022 Fund Analysis
DIG is the only UK Equity Income trust with an explicit sustainable investing mandate…
18 Aug 2021 Fund Analysis
DIG’s shareholders recently voted to incorporate ESG into the trust’s investment objectives…
11 Aug 2021 In at the deep end
Does seeking out wider-than-usual discounts help investors systematically outperform in the UK trust space?
03 Mar 2021 Strength in depth
UK Equity Income trusts have done a heroic job of maintaining their dividends through the pandemic...
03 Mar 2021 Fund Analysis
DIG offers a high yield backed by large revenue reserves…
29 Jul 2020 To be, or not to be (geared), that is the question
Gearing is part of the toolkit that trusts use to outperform OEICs. But how is it best implemented?...
20 Jul 2020 Fund Analysis
Seeking to grow income, and with substantial revenue reserves, DIG invests primarily in UK companies...
01 Jul 2020 Oh the humanity...
We consider two strategies to cope with markets which, boosted by massive government support, may be witnessing the start of a ‘melt-up’ which may be followed swiftly by a melt-down...
15 Apr 2020 Hold fast
Investment trusts' revenue reserves could make them a vital stronghold for investors facing UK dividend cuts of as much as 47%....
16 Jan 2020 Fund Analysis
Seeking to grow income, and with substantial revenue reserves, DIG invests primarily in UK companies...
17 Jul 2019 Ready for action
In the second part of our active management series, we assess the most active managers across the major closed-ended equity sectors…
07 May 2019 Fund Analysis
Run by Ben Ritchie and Louise Kernohan, Dunedin Income Growth is a turnaround story starting to bear fruit...
01 Oct 2018 Fund Analysis
A UK-focused equity trust, which aims to generate a growing income while achieving capital growth in excess of the FTSE All Share...
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