21st Aug 2020 12:03
(Alliance News) - City Merchants High Yield Trust Ltd on Friday said its net asset value declined in the first half of the year after a "dramatic" Covid-19 hit to high yield markets.
The Jersey incorporated investment company, successor to City Merchants High Yield Trust PLC, invests mostly in high-yielding fixed-interest securities. Its NAV per share as at June 30 was 182.21 pence, down 5.2% from 192.11p at the end of 2019. The NAV total return for the six month period was negative 2.4%.
Chair Tim Scholefield highlighted the "sudden and dramatic" initial blow to high yield markets dealt by the Covid-19 pandemic, with "draconian restrictions on social movement" in place to control the spread of the virus.
"Against this backdrop it is no surprise that the company's NAV experienced something of a roller coaster ride during the first six months of the year. Having at one point fallen by over 18% from the start of the year, the NAV recovered from its March low to end the six months to 30 June 2020 down just 2.4%. In comparison the ICE Bank of America European Currency High Yield Index returned negative 4.9% during this period," said Scholefield.
The company maintained its interim dividend at 5.0p per share.
The chair commented: "Given the strong possibility of further macroeconomic disappointment a cautious view of the next six months is therefore appropriate, and having guided the portfolio though the initial stages of the crisis I am confident that the manager's rigorous investment approach will allow the company to continue to navigate the challenges that undoubtedly lie ahead."
Shares in City Merchants High Yield Trust were up 0.6% at 172.25 pence in London on Friday.
By Anna Farley; [email protected]
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