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UK companies have a lengthy history of paying dividends, which makes UK equities a fertile hunting ground for those investors looking for long-term growth in their income and capital. However, a concern on income investing in the UK market is that dividends are concentrated in a handful of companies and sectors, leaving income-seeking portfolios unbalanced.1 We have designed the investment process on the BlackRock Income & Growth Investment Trust to avoid this pitfall.
Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.
We want to make sure that the vast majority of the trust’s performance comes from stock selection. We believe this helps deliver a more consistent return for shareholders.
Dividend income in the UK equity market
While it is true that dividend income is concentrated in the UK equity market - with over a third of the UK’s dividends coming from just five companies2 - there is still real choice in the market. The dividend yield on small and medium-sized companies, for example, is competitive with that of the larger companies.3 On the BlackRock Income and Growth trust, we have the flexibility to look across the market.
How BlackRock achieves a growing dividend yield alongside capital growth
Our approach in achieving the Fund's investment objective of generating a growing dividend yield alongside capital growth is to look at three main types of company. The first segment is ‘income generators’, also known as growing dividend stocks. These comprise 70% of the portfolio and are companies with high and sustainable cash flow contributing to a growing dividend.4 This might include companies such as Relx or AstraZeneca, all long-standing holdings for the trust.5
Additionally, we look to identify and invest 20% of the portfolio in ‘growth’ companies that have significant barriers to entry and scalable business models that enable them to grow consistently.6 This might include companies such as private equity and infrastructure specialist 3i Group.3
We also look for turnaround companies, accounting for up to 10% of the portfolio value, which represent those companies that are out of favour with the market, facing temporary challenges yet offer significant recovery potential.
This approach means we're not limited to only buying a particular type of company when looking for investment opportunities. It also means we can be flexible in different environments. For example, there will be times when investors become excited about a specific area and shares can become overvalued. In this case, we can pivot away from a specific type of company and look for opportunities elsewhere.
This balanced portfolio may give our investors a more consistent journey on route to long-term total returns. We recognise that markets can be volatile, and it is difficult to stay invested when capital values are bouncing around. By focusing on stock selection , we aim to avoid the extremes of market cycles. We believe this creates a more stable experience for our investors.
1 AJ Bell - FTSE 100 dividend growth expected to resume after nearly flat 2024 - 1 April 2025
2 Computershare - Dividend Monitor Q2 2025 - July 2025
3 London Stock Exchange - FTSE 250 - 28 July 2025
4 BlackRock Income & Growth Investment Trust – How BlackRock provides dividends alongside capital growth - April 2025
5 BlackRock Income & Growth investment Trust - Factsheet - June 2025
6 Please note that the percentages (73%, 20% and 10%) in different investment types is part of our investmenet process and is subject to change without notice
Risk Warnings
Investors should refer to the prospectus or offering documentation for the funds full list of risks.
Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.
Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy.
Changes in the rates of exchange between currencies may cause the value of investments to diminish or increase. Fluctuation may be particularly marked in the case of a higher volatility fund and the value of an investment may fall suddenly and substantially. Levels and basis of taxation may change from time to time.
Trust-specific risks
Counterparty Risk: The insolvency of any institutions providing services such as safekeeping of assets or acting as counterparty to derivatives or other instruments, may expose the Fund to financial loss.
Gearing Risk: Investment strategies, such as borrowing, used by the Trust can result in even larger losses suffered when the value of the underlying investments fall.
Liquidity Risk: The Fund's investments may have low liquidity which often causes the value of these investments to be less predictable. In extreme cases, the Fund may not be able to realise the investment at the latest market price or at a price considered fair.
