BMO Capital & Income Investment Trust (BCI) targets long-term growth in both capital and income, primarily from a portfolio of companies listed on the FTSE All-Share Index. Managed by Julian Cane since 1997, BCI has increased its dividend every financial year since launch in 1992 (as discussed under Dividend) and is an AIC ‘dividend hero’. BCI currently yields c. 4% on a historical basis (as at 14/12/2020). Julian seeks to identify total return opportunities whilst ensuring the dividend is covered in ordinary market circumstances. However, the extraordinary market backdrop in 2020 has seen the board use revenue reserves to maintain dividend growth, allowing the manager to focus on what he believes are the most attractive total return opportunities. Stock selection focusses on identifying high-quality companies with strong management teams when they are on attractive valuations, as discussed under Portfolio. Constituent companies typically exhibit high barriers to entry and strong competitive advantages, with management teams with track records of strong capital allocation. Julian looks to identify companies where growing free cash flow can ultimately support growing dividends. This, he notes, has helped BCI to outperform over the longer term. ESG considerations are embedded in the investment process, and impact calculations of fair value. As detailed under the ESG section, ESG evaluations and engagement strategies with company management are considered key inputs to the investment process. With a well-diversified shareholder base, BCI has consistently traded at a premium in recent years (as we discuss under Discount), and this has allowed the board to issue shares for greater economies of scale. However, BCI has moved out to a narrow discount in recent days.