Aberdeen Equity Income (AEI)

On 17/03/2026 Aberdeen Equity Income (AEI) completed the process of combining with Shires Income (SHRS), with AEI as the continuing vehicle. The result is an enlarged trust with net assets in excess of £325m. The combination modestly broadens the investment toolkit, adding preference shares and investment-grade fixed income securities, alongside exposure to selective overseas equities in developed markets. Whilst this may diversify income sources and slightly alter the risk-return profile, the core UK equity income approach remains unchanged, with managers remaining focussed on bottom-up stock selection, valuation discipline and dividend sustainability, building a Portfolio of high-quality companies where share prices understate long-term potential.

Income progression remains a defining feature too. For the year ended 30/09/2025, AEI delivered its 25th consecutive annual Dividend increase to 23.0p per share, fully covered by earnings. The board intends to continue this record, guiding dividends of at least 23.1p for FY2026. The current yield of 6.0% remains attractive and the progressive dividend policy will continue post combination.

Cost efficiency is also set to improve. At 30/09/2025, AEI’s ongoing Charges figure stands at 0.84%, but the enlarged trust’s OCF will be capped at 0.78%. As part of the scheme, Aberdeen agreed to fund implementation costs (net of the cash option discount), limiting NAV dilution for rollover shareholders.

Performance has also strengthened meaningfully over the past year to 23/03/2026, with AEI delivering NAV and share price total returns of 26.3% and 25.3%, ahead of the 17.5% return from the FTSE All-Share. Alongside this, investor demand has been strong. The trust has issued c. 6.5% new shares over the past 12 months, a notable outlier in a sector where issuance has been limited. At the time of writing, AEI currently trades at a small Discount of 1.9%, compared with its five-year average of 3.4%.