23rd Jun 2016 08:40
LONDON (Alliance News) - F&C Global Smaller Companies PLC on Thursday said its net asset value total return outpaced its benchmark in the year to the end of April and it hiked its dividend 11%.
The fund, which invests in smaller companies around the world, said its net asset value total return for the year was 3.5%, ahead of the 1.3% return from its benchmark, a 70%/30% blend of the MSCI All Country World ex-UK Small Cap Index and Numis UK Smaller Companies Index.
F&C said its share price ended the financial year 3.2% higher, as an improvement in the performance of its portfolio in the fourth quarter offset a more difficult first three quarters of the year.
The fund said equity markets staged a recovery in the fourth quarter as investors took the view that interest rates in the US would not move up materially in the near term, while rising commodity prices later in the period were also taken as an indicator the world was not heading into a deflationary decline.
In addition, the weakness in sterling in recent months proved beneficial for the fund, as the majority of its investments are denominated in other currencies.
The robust performance prompted the fund to hike its dividend payout for the year to 10.70 pence, up 11% year-on-year.
Chairman Anthony Townsend said equities struggled in the fund's 2016 financial year, "in part due to lacklustre corporate earnings numbers pretty much around the globe."
"However, low and now in some places, negative bank interest rates, plus compressed government and corporate bond yields, provide investors with few attractive alternative options. Although there is uncertainty around the up-coming EU referendum, the board continues to be optimistic that the company can continue to deliver on its objective to shareholders over the medium term," he added.
Shares in the fund were up 0.2% to 997.00p.
By Sam Unsted; [email protected]; @SamUAtAlliance
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