23rd Aug 2019 09:47
(Alliance News) - EP Global Opportunities Trust PLC said Friday it has underperformed considerably against its comparative indices despite a rise in net asset value, due to an underweight exposure to US equities.
For the six months to the end of June, the trust's NAV total return was 6.9%, compared to the FTSE All-World Index, which returned 16.4%, and the FTSE All-Share adding at 13.0%.
As at June 30, net asset value was 323.7 pence per share, down 2.9% from 333.2p at the same date the year before, but up 4.8% from 308.8p at the end of December.
EP Global's share price at the end of June was 307.0 pence, reflecting a discount to net asset value of 5.2%.
Shares in the trust were untraded on Friday, last quoted at 305.00 pence, having declined since the period-end.
EP Global said that its total return was affected by its underweight exposure to US equities, due to the trust considering US equity market valuations to be "excessive" compared to other global equity markets.
US equities, particularly Growth stocks were strong performers during the period as market expectations of the US Federal Reserve cutting interest rates, in parallel with the accompanying rising political pressure on the US Fed.
Portfolio-wise, the two best performing stocks were US-based, with consumer financial services group Synchrony Financial and technology group Cirrus Logic. Positive returns also come from healthcare stocks and Singapore Telecommunications.
Detractors included Vodafone Group PLC, Nokia Oyj and Alps Alpine Co Ltd, which was sold off following the end of the period.
"A number of geo-political tensions have impacted equity markets. These include US/China trade tariffs, increasing political tensions in the Middle East and continued uncertainty surrounding the UK's exit from the EU, with the new Prime Minister, Boris Johnson, set to take a more hard-line stance. They have the potential to continue to unsettle equity markets," said Chair Teddy Tulloch.
"The recent downgrading of forecasts for global growth and the relatively high valuation of equity markets has resulted in our investment manager both adopting a more defensive position in the portfolio and holding a higher level of cash balances, despite a slight reduction in the period under review, than would normally be anticipated," Tulloch added.
Related Shares:
EPG.L