27th Sep 2019 17:04
(Alliance News) - British & American Investment Trust PLC on Friday reported a rise in net assets, significantly outperforming its benchmark on a total return basis.
At June 30, the trust's NAV per share stood at 24.00 pence, 4.4% higher than the 23.00p reported at December 31.
The trust's net assets increased 3.8% over the first half, rising to GBP8.2 million from GBP7.9 million at the end of December.
British & American IT declared 2.7p in the period, unchanged from the year before.
The trust's NAV total return in the period was 25.2%, significantly outperforming the FTSE 100 index and the All Share index, which both gained 10.4% over the same period.
"The increase in net assets over the period reflected gains of 35% in the value of our largest US holding, Geron Corp, over the period. Despite this substantial rise in value from the lows reached at the end of 2018 following the withdrawal of its partner Johnson & Johnson in September last year, it was not sufficient to produce outperformance in the portfolio as a whole when measured against the benchmarks which had themselves showed strong performances in the first 6 months of 2019. However, on a total return basis, the portfolio significantly outperformed the benchmarks notwithstanding their strong performance," said Chair David Seligman.
Seligman continued: "The determination of markets to ignore the growing political and economic headwinds and uncertainties reported in my last statement in April seems to have faltered. Equity markets in the USA and UK retrenched considerably in the second quarter showing increased levels of volatility and this has continued into the third quarter. While the current major unresolved politico-economic issues such as Brexit, the China-US trade war and looming global economic downturn remain unresolved, markets appear likely to remain below the peaks achieved in 2018 following years of monetary and fiscal stimulus.
"Without a positive resolution of these issues or a return to substantial monetary intervention by central banks which seems unlikely, markets generally seem to be preparing for a period of underperformance."
As a result, the trust had "trimmed" some of its long term investment positions. At September 25, the trust's net assets stood at GBP8.0 million, 2.4% lower than at the end of the first half.
Shares in British & American Investment closed 7.0% higher in London on Friday at 38.00 pence each.
By Paul McGowan; [email protected]
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