19th Feb 2015 09:44
LONDON (Alliance News) - City of London Investment Trust PLC Thursday said its net asset value total return was ahead of the averages for the UK Equity Income Investment Trust sector and open-ended investment company sector, as well as of the FTSE All Share Index, in the first half of its financial year.
In a statement, the trust said its NAV total return was 2.1% in the six months ended December 31, 2014, while its AIC UK Equity Income Sector benchmark showed a 1.2% equivalent and the UK Equity Income OEIC sector average was 1.6%. The FTSE All Share Index showed a negative 0.4% equivalent.
"The key contributors to performance were the below-average exposure to the oil and mining sectors which were adversely affected by the weakness of oil and other commodity prices," Chairman Philip Remnant said in a statement.
"Among the biggest stock contributors held in the portfolio were Phoenix [Group Holdings] (in the life assurance sector), Croda [International PLC] (in chemicals) and Land Securities [Group PLC] (in Real Estate Investment Trusts)," Remnant added.
The chairman also gave an update on the trust's outlook for the UK economy, calling the prospects "positive with a combination of steady growth and low inflation".
"In particular, the low oil price should continue to help household disposable income as well as putting downward pressure on inflation. Overseas consumers of oil will also benefit from its lower price and the belated action by the European Central Bank to start purchasing sovereign debt may improve growth on the Continent," Remnant said.
However, he also warned of "heightened uncertainty" in the UK due to the political risks around the General Election scheduled to take place in May.
"City of London's portfolio is, however, well diversified with the profits from its UK listed companies predominantly coming from overseas markets as well as having 10.1% invested in overseas listed companies. The dividend yield on the portfolio remains attractive relative to the alternatives in fixed interest and bank deposits," Remnant said.
City of London Investment Trust shares were down 0.3% at 396.45 pence on Thursday.
By Samuel Agini; [email protected]; @samuelagini
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Related Shares:
City Of London InvestmentPhoenix Group HoldingsLand SecuritiesCroda International