23rd May 2016 11:21
LONDON (Alliance News) - F&C Capital and Income Investment Trust PLC on Monday said it continued the string of consecutive dividend increases into its 23rd year, as it outperformed its benchmark index in its first half.
The trust's net asset value per share on a total return basis rose by 4.8% for the six months to March 31, while the FTSE All-Share Index rose by 3.5% over the same period. The share price total return was 3.8%, F&C Capital said, and the trust increased its interim dividend to 4.70p per share, up from 4.60p a year earlier.
F&C Capital had net assets of GBP245.4 million at the end of March, 3.6% higher than the GBP236.9 million posted a year earlier.
"Some investors will no doubt remember the 'Goldilocks' markets of the 1990's - a golden era when the economy was not too hot, not too cold, but just right. This fostered high returns in equity markets which we can only view with nostalgia. Today's reality is that the adjustment to the global economy which began after the Global Financial Crisis still has many more years to run. The corollary of this is that growth will remain sub-par, as will inflation and interest rates," said Chairman Steven Bates.
"Profits at companies may be subdued, but equity markets are not down and out in this climate. Instead, low or even negative interest rates encourage investors to take risks and there are few assets of any sort which offer prospective real returns in the way that dividend paying equities can," the chairman added.
"There remain problems in the financial system and of course in geo-politics with any number of possible hotspots, including our very own contribution to the genre in the shape of a potential Brexit. Nevertheless, the capacity and desire of both governments and central banks to avoid a meltdown is a signal that, for now, we remain on an even keel, even if absolute returns are unlikely to be especially generous," Bates said.
Shares in F&C Capital were down 0.3% at 260.00 pence on Monday.
By Hannah Boland; [email protected]; @Hannaheboland
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