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Fund Profile


This is a non-independent marketing communication commissioned by abrdn. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

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The objectives of Dunedin Income & Growth (DIG) are to generate growth of income and capital from a portfolio of mainly UK companies that meet its sustainable and responsible investment criteria. Ben Ritchie has been the lead manager since 2016 and was recently joined by Rebecca Maclean as co-manager, in early 2022.

Over the years, Ben has taken a quality strategy to running the portfolio, seeking out companies with solid balance sheets and resilient operations. He has differentiated the portfolio through a growth bias, allocating more to small and mid-caps than the benchmark index, the FTSE All-Share Index, and other more traditional equity income funds. In 2021, the board refreshed DIG’s mandate for the portfolio to follow explicit ESG criteria. Ben and abrdn already had a strong ESG ethos, so implementing the changes did not require a raft of changes to the portfolio or investment process. In fact, it allowed Ben to double down on quality and growth aspects and these have proved to have been material in the portfolio’s outperformance against the benchmark over the last five-year period (see Performance section).

The trade-off for its growth focus means giving up some yield. However, DIG’s dividend yield of c. 4.9% is still significantly better than the benchmark’s yield of approximately 3.8% and only marginally shy of the sector’s unweighted average (see Dividend section). An options writing programmes provides supplemental and uncorrelated income and helped provide a degree of resilience for income payouts at the height of the pandemic, when many companies halted dividend payments altogether. With strong revenue reserves, the board has posted dividend increases for 38 of the past 42 years.

DIG’s OCF is 0.56%, lower than the simple average of the sector and the trust currently trades close to par. Meanwhile, it uses a moderate level of Gearing.

Analyst's View

We believe that DIG’s differentiated approach within the equity income space provides attractions for certain investors. The explicit ESG mandate does away with tobacco and other traditional income stocks with questionable ESG practices. Meanwhile the options writing programme allows the managers to balance income and growth in their stock picks, which we believe could provide investors with better total returns than simply focussing on the highest yielding companies. It should also allow Ben and the team to align the portfolio to the secular trends they currently see as long-term drivers of growth, namely digitalisation, changing demographics and consumer trends.

However, with a target portfolio of just 30-50 stocks, this is a high-conviction approach. If the team’s investment thesis for individual companies does not play out, then DIG’s performance is likely to diverge detrimentally from its peers. This has been the case over the past year amidst the rotation towards large caps, value and commodity stocks. However, DIG’s quality bias provides a degree of resilience and investors, seeing through the short-term uncertainty, may be rewarded when the market favours growth stocks once more. The latest set of half-year results shows that underlying dividend income has been strong. Therefore, we expect that revenue reserves will no longer need to be dipped into and can be rebuilt.


  • 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 0.56%


  • ESG exclusions will result in underperformance if poorly-rated ESG stocks and sectors rally
  • Some recent turnover 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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