3rd Mar 2016 10:46
LONDON (Alliance News) - Aberdeen Smaller Companies High Income Trust PLC on Thursday said it will change its name to no longer include the word "high".
"Although the trust delivers a yield at a premium to its benchmark index, the dividend yield of over 3.0% is not considered to be high relative to other high income funds. In addition, our trust seeks to derive its income primarily from equities and therefore generally holds less bonds than more commonly found in other high income funds," Chairman Carolan Dobson said.
The trust intends to change its name to Aberdeen Smaller Companies Income Trust PLC.
The trust's net asset value on a total return basis increased by 13.4% over the twelve months to December 31, versus an increase in the FTSE SmallCap (excluding investment companies) Index of 13.0%. The narrowing of the discount at which the trust's shares traded to net asset value, to 13.6% at the year-end from 18.2%, came amid a 16.6% increase in the share price.
"In the UK, smaller companies outperformed mid-cap equities and significantly outperformed large-cap equities, as represented by the FTSE 100 Index, which fell by 1.3%. Global equity markets also struggled to deliver positive returns with emerging markets the worst affected as investors were reminded that these markets have historically been more volatile and risky. Against this backdrop 2015 was a good year of performance for the company," Dobson said.
"We are encouraged by the outlook for smaller companies and feel they are better insulated given the domestic backdrop. We are also seeing a big disconnect between company fundamentals and the market. The recent sell-off has been driven by sentiment and negative headlines which are then self-fulfilling in driving sentiment and the market," investment manager Aberdeen Asset Management said.
"Most of these issues have little correlation to the company's holdings and therefore we see this as good opportunity to add to positions on weakness. We retain the view that smaller companies offer attractive growth over the medium-term without some of the issues facing the larger end of the market cap spectrum and should remain a core part of your portfolio for 2016," the investment manager added.
The stock was down 1.9% at 188.90 pence on Thursday morning.
By Samuel Agini; [email protected]; @samuelagini
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