19th Mar 2015 12:06
LONDON (Alliance News) - EP Global Opportunities Trust PLC Thursday said its net asset value per share was 236.0 pence at the end of 2014, giving a total return for the twelve months of 2.2%, representing a mixed performance against two key FTSE indices.
The trust bettered the 1.2% total return of the FTSE All-Share Index, but lagged against the 11.3% total return of the FTSE All-World Index.
The share price rose by 2.0% over the course of 2014, helping the discount at which the shares trade to NAV to narrow to 0.6% from 1.5%. The narrowing of the discount was supported by the buyback of 675,000 shares at a GBP1.5 million cost in 2014.
The trust had benefited from its portfolio's strong exposure to Japanese and European shares in 2013 but said it was held back by that weighting in 2014. Holdings in Japan and Europe represented about 60% of the portfolio at the end of 2014.
The trust said it had had misgivings about the valuations of its US holdings over the year, reducing its exposure to 11.1% at the end of 2014 from 16.6% at the start.
"The healthy return achieved by the FTSE All-World Index was largely due to the rise in the US stock market with US shares accounting for over half the market capitalisation of that index. US shares had also performed strongly in 2013 and by the end of that year it was becoming difficult to find US shares that offered good value. However, this did not stop further gains being made in 2014," Chairman Teddy Tulloch said in a statement.
The trust also said that exchange rate changes were unhelpful to overall performance.
"Our US investments did benefit with the US dollar appreciating by 6% against sterling but the value of our European and Japanese holdings were reduced by a decline of over 7% against sterling for both the euro and the yen," Tulloch said.
The trust said it remains positive about its emphasis on Japanese and European equities, pointing to the quantitative easing programmes being pursued by both the Bank of Japan and the European Central Bank.
"With low interest rates and many central banks still inclined to ease monetary conditions, this should be supportive for equities generally but with shares becoming more expensive we find our optimism tempered with a degree of caution," Tulloch said.
Edinburgh Partners manages the trust's assets.
EP Global Opportunities Trust shares were up 0.7% at 257.75 pence on Thursday.
By Samuel Agini; [email protected]; @samuelagini
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