The real dividend heroes

However, these statistics do not take account of whether the magnitude of dividend increase beats the prevailing inflation rates. As one Investors Chronicle reader puts it: "My old Grandma could pay out an increasing dividend each year if she only increased it by 0.00001% a year."

To see if these trusts are as heroic as they seem, Investors Chronicle has compared the level of retail price inflation (RPI) in each of the past 10 calendar years (2002-11) with the percentage increase in the level of dividend for the top 10 dividend heroes over the past 10 years.

Not every investment trust has a January-December financial year, but we chose this time period so we could compare them to each other and inflation.

Source: Morningstar as at 8 May 2012

UK Growth & Income trust City of London has one of the strongest progressive dividend records, and in most cases these are also largely meaningful rises above inflation. The percentage increase in the dividend only lagged behind inflation in calendar years 2002, 2003 and 2011. Its NAV and share price performance beats the average UK income growth trust over one and five years, although it is not among the top performers in this category. Like a number of high-yielding investment trusts, City of London currently trades at a premium to net asset value (NAV).

Source: Morningstar as at 8 May 2012

Bankers Investment Trust has a similarly impressive dividend growth record, and has in some years beaten inflation by a massive margin. Only in 2005 did its dividend increase lag inflation, and it was equal to it in calendar 2011.

Bankers' current yield of 3.26 per cent may not be as high as City of London, but the focus of this trust is growth and it is one of the higher yields on offer in the global growth investment trust sector. Its NAV returns fail to beat the sector average over three and five years, although the share price did beat peers over one and five years.

Source: Morningstar as at 8 May 2012

Although self-managed global growth trust Alliance Trust has also raised its dividend every year for the past 45 years, it's been less impressive at beating inflation; only in 2008 was its dividend increase well ahead of retail price growth. In 2005, the rise was equal to RPI inflation.

The trust's current yield of 2.53 per cent also lags behind inflation, and its NAV and share price performance records are unspectacular. Hence the wide discount to net asset value, and the recent shareholder activism at the trust.

Read more on Alliance Trust

Source: Morningstar as at 8 May 2012

Global growth trust Caledonia Investments has a wealth preservation mandate, and lives up to its promise. In every one of the past 10 calendar years it has raised its dividend by more than that year's RPI inflation.

However, its current yield of 2.75 per cent is less than inflation, and the trust's performance has struggled over the past few years, failing to beat its peers - hence the big discount. But its managers are looking to implement changes to improve returns so investment trust analysts think that there may be a re-rating in time.

Read our profile

Source: Morningstar as at 8 May 2012

UK Growth & Income trust Albany Investment currently offers an attractive yield ahead of inflation and can be bought at a discount approaching 20 per cent. However, there is a reason for the wide discount: NAV and share price performance are massively behind its peers, so the price of a reasonable yield may be that you are likely to be losing out on growth.

Source: Morningstar as at 8 May 2012

Foreign & Colonial, the oldest investment trust, has a good record of beating inflation, on occasions by a tremendous margin. The only time it didn't was in 2011.

Its current yield of 2.36 per cent doesn't beat inflation, but it has a growth mandate rather than an income one. That said, its growth returns are not among the best, although it beats its sector average in terms of price performance over one and five years.

Source: Morningstar as at 8 May 2012

F&C Global Smaller Companies has raised its dividend by more than inflation in only four of the past 10 calendar years: 2002, 2003, 2005 and 2009. But again, a focus on smaller companies is unlikely to result in bumper dividends; this is a growth vehicle, not an income one. The trust was recently awarded Best Global Growth Fund at Investors Chronicle's first fund awards (read more about our awards)

Source: Morningstar as at 8 May 2012

The years this growth-focused trust did not manage to beat inflation were 2005, 2010 and 2011. Its current yield of 3.16 per cent is one of the more generous among global growth trusts, and while long-term returns are not good, it has shown considerable improvement over the past year.

Source: Morningstar as at 8 May 2012

JPMorgan Claverhouse has been caught out just twice in the past decade, in 2010 and 2011, when RPI soared well over 4 per cent. The trust offers an attractive yield in excess of 4.4 per cent, but returns lag its peer-group average over one, three and five years.

Source: Morningstar as at 8 May 2012

Global growth trust Witan fell short in 2003, 2004, 2006 and 2010. Furthermore, its current 2.68 per cent yield is less than inflation, and its returns have lagged behind those of the average global growth trust.

Trusts that have the longest records of increasing their dividends

Source: Association of Investment Companies

Percentage dividend increases per calendar year

Source: ThomsonDatastream as at 2 May 2012