19th Aug 2014 11:56
LONDON (Alliance News) - City Merchants High Yield Trust Ltd Tuesday reported a 4.4% net asset value total return over the six months ended June 30, an outperformance of the 4.1% average return from the funds in the Investment Management Association Sterling Strategic Bond sector.
The trust's NAV per share increased to 187.28 pence at the end of June, up from 184.12p at the close of 2013, which combined with the payment of a total dividend of 5p over the period gave rise to the total return.
The trust's investment objective is to seek to obtain both high income and capital growth from investment, predominantly in high-yielding fixed-interest securities.
"The high yield bond market has continued to deliver strong positive returns in recent quarters, but we have not seen the level of spread tightening that occurred in 2012 and 2013. In our opinion, the market is now fully valued, and we see little potential for further capital appreciation," Invesco Asset Management Ltd, the trust's manager, said in a report.
"Yields and spreads are low by historical standards. We are seeking to provide an attractive level of income, while focusing our portfolio on issuers with low default risk and on bonds where we think the balance of reward to risk remains relatively good," the manager added.
The trust's shares were Tuesday quoted up 0.5% at 184.96p.
By Samuel Agini; [email protected]; @samuelagini
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