The trust reported a NAV total return of 6.3%, lagging the FTSE All-Share Index’s 7.8%. Its share price total return was 5.9%, reflecting a slight widening of the discount to NAV.

The benchmark performed well despite the conflict in the Middle East, disruption in global energy markets and renewed inflation concerns. UK equities delivered a strong return, supported by the market’s significant exposure to the energy and financial sectors.

The board also revealed that it took independent advice “confirming that it does not fetter in any way the Board’s mandate to protect shareholder interests” before signing a three-year standstill agreement with Saba Capital in August.

It said the deal would allow it to continue the company’s strategic development and act independently in holding the investment manager to account, adding: “As far as the Board is aware, Saba does not currently hold an interest in the Company’s shares.

“However, the board believes that this agreement benefits all shareholders through providing near-term clarity in respect of Saba’s position, at no cost to the company and notes that it does not restrict any party from acquiring shares in the company.”

The trust said a swing in investor enthusiasm for artificial intelligence drove market sentiment, with volatility across the technology sector weighing on performance early in the period, before improving investor confidence and strong stock selection helped offset the headwind.

It said in a statement: “It is notable that, during periods of market turbulence, the portfolio’s tendency to outperform the broader benchmark persisted, reinforcing the Board’s confidence in the differentiated investment approach taken by the investment manager.

“Recognising that performance has continued to be below the FTSE All-Share benchmark, the board has undertaken a robust in-depth review of the investment manager’s investment philosophy and process using an external consultant. The board is mindful of the impact of NAV underperformance and is continuing to monitor the investment manager for much needed signs of improvement.”

The trust’s revenue earnings per share for the period were 6.18p, compared with 7.82p in the first half of last year. The decline principally reflects lower portfolio income, particularly from overseas holdings, following portfolio changes made in response to the additional flexibility provided by the company’s enhanced dividend policy.

Rebecca Maclean

A first interim dividend of 4.25p per share for the year ending 31 January 2027 was paid on 28 August 2026. The board has declared a second interim dividend of 4.25p per share, which will be paid on 27 November 2026 to shareholders on the register on 6 November 2026.

The board announced a significant increase in dividend distributions in September 2025, resulting in total dividends of 19.10p per share for the year ended 31 January 2026. This equates to a share price yield of 6.1% as at 31 July 2026, which the trust described as attractive compared with cash, the FTSE All-Share Index and peers in the UK Equity Income sector.

The trust also has two sources of gearing: a £30m loan note that matures in 2045 and a £30m multi-currency revolving credit facility that expires in August 2027. The sterling equivalent of £19.3m was drawn down from the revolving credit facility at the period end. With debt valued at par, net gearing was unchanged during the period at 11.3%.

Howard Williams, chairman of Dunedin Income Growth Investment Trust, said: “It is notable that, during periods of market turbulence, the portfolio’s tendency to outperform the broader benchmark persisted, reinforcing the Board’s confidence in the differentiated investment approach taken by the investment manager.”

Ben Ritchie and Rebecca Maclean, investment managers at the trust, added: “The economic and political backdrop remains uncertain both in the UK and globally. Inflationary pressures have not abated, economic growth remains mixed and the path of interest rates remains difficult to predict. We are not positioning the portfolio around a single macroeconomic forecast. Instead, our focus remains on investing in high-quality businesses with resilient earnings, strong cash generation and the financial capacity to invest and grow through a range of economic conditions.

“We believe the company remains differentiated both within the UK Equity Income sector and against its benchmark. While relative performance has faced headwinds in recent years from style and market concentration, it is encouraging to see an improvement in returns more recently as a number of holdings have delivered robust operational progress. Meanwhile, changes to the company’s sustainability framework have broadened the opportunity set, allowing us to construct a more balanced portfolio while maintaining our emphasis on quality, sustainability and valuation discipline.”