The Athelney Trust unaudited NAV rose by 0.9% in November whereas the FTSE Smaller Companies and AIM All-share actually fell by 1% and 0.4% respectively although the Fledgling improved by 0.2%. On the face of it, a rather dreary month but there were, in fact, some pretty hefty individual movements, both up and down. The US Federal Reserve will meet shortly and is widely expected to increase interest rates by 0.25%, which would mark its only hike in 2016 whereas three or four had been expected at the beginning of the year.

Perhaps two more are in prospect for 2017 although much may depend on the fiscal expansion proposed by Donald Trump. Whatever happens, I believe that the 35-year bull market in bond prices is facing the sunset. Income seekers, tormented by low bond yields, may welcome the prospect of rising interest rates. Yet it is difficult to see them rising towards previous levels thanks to global trends such as ageing populations, weak productivity and the debt overhang following the financial crisis. This means that investors should not turn away from equities for income. I believe that dividend growth shares will remain a fertile field for income investors. A rise in rates could, though, hurt ultra high-yield shares on fancy ratings and low growth rates. I see dividend growth shares, quality companies with sufficient cash flow to sustain steady increases in distributions, as being attractive even in the new environment.

Both the search for income and the strong case for dividend growth shares are global trends and the need for income remains high as the number of retirees increases world-wide. Rising bond yields are a headwind for ultra high-yield shares but I believe that a focus on dividend growth in quality companies is likely to offer both income and capital growth potential to provide an attractive overall return.