8th Jan 2019 10:55
LONDON (Alliance News) - European Assets Trust said Tuesday it will cut its 2019 payout sharply in line with its dividend policy after its net asset value per share fell during 2018 amid tough markets.
The European company focused investment trust calculates its annual dividend payments according to its net asset value at the end of the preceding year, distributing 6% of its total value.
For 2019, this means the firm will distribute 6.84 euro cents across equal quarterly payments. The year prior European Assets had paid 8.80 cents in dividends across the year, representing a 23% cut.
European Assets explained its performance in 2018 saw net asset value fall 15% in sterling terms and 16% on a euro basis. This compares with the 13% sterling and 14% euro decline experienced by its EMIX Smaller European Companies (ex UK) Index benchmark.
"At this juncture last year, we sounded a note of caution over both the withdrawal of liquidity globally, with the support of central banks diminishing, and concern over some exuberant valuations," European Assets explained in a statement.
"These issues have been augmented with fears over economic growth, trade wars, and political upheaval across the globe," European Assets added. "Together they have dominated the second half of the year to deliver a reasonably co-ordinated decline in equity markets. The consequence is that the outlook is as uncertain now as at any point since the global financial crisis. However, we welcome at least some of this volatility in that we believe it will give us the opportunity to buy some good quality assets at attractive prices."
The firm added that its underperformance against its benchmark "can almost be attributed entirely to a very poor April, when we significantly lagged a strong market led by sectors where we had little exposure."
Shares in European Assets Trust were 1.6% higher at 95.98 pence on Tuesday.