How utilities are providing dividend sustainability for investors

INVESTMENT TRUSTS

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Claire Long, manager of the Premier Energy and Water trust, explains why the utility sector is one of the few that is successfully combining high yields and dividend growth.

Over the past ten years to the end of July, the MSCI World Utility index and the MSCI World index in sterling terms have produced a very similar capital return of around 75%. In total return terms, however, the utility sector returned almost 170%, compared with 135% by its parent. Look at almost any region and in total return terms the picture is the same or better over this period. US utilities have produced 75% more than the S&P 500, emerging markets utilities have returned 110% more than their parent, and in the case of UK utilities the differential has been even more marked, with ...

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