Lowland Investment Company aims to give investors a higher-than-average return with growth in both capital and income over the medium to long term by investing in a broad spread of predominantly UK companies.

Lowland measures its performance against the total return of the broad UK stock market, although its portfolio is markedly different from that of its benchmark index.

There are four things investors need to know.

1. Lowland focuses on growing its capital base to support progressive dividends.

The trust was established in 1963 and is managed jointly by James Henderson (since 1990) and Laura Foll (since 2013) of Janus Henderson Investors. In turn, they are supported by the broader resources of the Janus Henderson equity team. The company seeks to provide investors with a higher-than-average, medium-term return, from a combination of capital and income. To achieve this, Lowland invests in a broad spread of predominantly UK companies across the whole range of market capitalisations, unconstrained by any index. With the flexibility to invest in companies that have greater growth potential (usually, but not always, small- and mid-cap companies), Lowland seeks to grow its capital base and distributable income over time, thereby supporting the progressive dividend strategy. In this respect, Lowland is clearly differentiated from many of its peers, which typically have a greater focus on traditional ‘income’ areas of the market.

2. Lowland seeks to optimise the balance between immediate income and income growth over time.

The investment managers consistently apply a patient, long-term, bottom-up investment strategy, with a strong valuation overlay. They look for companies that have an underlying strength, which is yet to be realised by the market, with the potential to deliver stronger sales and earnings growth than their larger peers and, over time, faster dividend growth. In many cases, these are under-researched and overlooked small- and mid-cap companies but they may also be turnaround situations, where a route to improvement can be clearly identified. These are balanced by larger company holdings, typically providing more immediate dividend income and often to be found in more defensive industries, such as pharmaceuticals and utilities, with the potential to mitigate risks in challenging market conditions. Over the longer term the portfolio is typically split between larger, medium and smaller companies in equal parts, but, reflecting market conditions, the weighting to larger companies has been closer to 50% in recent years. This is likely to unwind as the managers identify stronger opportunities among small- and mid-cap stocks.

3. Lowland is well placed to benefit from stronger small- and mid-cap performance.

The performance of the UK equity market has been strong over the past three years, delivering a total return of 47% to December 2025. It has also begun to improve versus overseas markets, following several years when UK equities were firmly out of favour. UK valuations have begun to move up from what were historically low levels but remain attractive and are at a meaningful discount to overseas markets. While larger UK companies have significantly outperformed small- and mid-cap companies in recent years, it is among the latter, where valuations are much lower, that the investment managers identify many attractive opportunities. This larger company outperformance has created a strong headwind for Lowland’s multi-cap strategy and has at times affected the trust’s performance relative to its broad UK equity market benchmark, typically 80–85% weighted to the largest companies. However, this market cap impact has been offset by good stock selection and Lowland has maintained its strong long-term record of outperformance. If the value in smaller companies becomes more widely recognised, it should support further outperformance. Although this is yet to be widely recognised in the market, low valuations are increasingly being underpinned by takeover activity, including several of Lowland’s holdings.

4. With a predictable dividend, shareholders are being paid to wait for a smaller company catch-up.

Although Lowland has a total return focus, it has maintained or increased dividends each year since it was established, even throughout the global COVID-19 pandemic, and aims to pay progressive dividends over time, with each quarterly distribution equal to or greater than the previous one. The UK economy continues to face multiple challenges, but market performance shows that UK-listed equities are not a proxy for the UK economy. Although smaller companies are typically more exposed to domestic economic activity than their larger counterparts, the investment managers are identifying many businesses that are well managed and have conservative balance sheets with leading or growing market positions. In many cases, these are the type of companies that are receiving takeover bids.

Published 9 February 2026