2nd Aug 2019 12:11
(Alliance News) - Henderson Smaller Cos Investment Trust PLC said Friday it underperformed against its benchmark in the first half of 2019, due to changes to gearing and expenses within the trust.
For the financial year ended May 31, the trust's net asset value negative return was 6.4%, lagging behind the Numis Smaller Cos Index (excluding investment companies).
Its net asset value per share as at May 31 was 958.7 pence, down from 1,046.9p the same date the year before. Henderson Smaller's share price at the end of May was 858.0 pence, reflecting a discount to net asset value of 10.5%, widened from 7.7% the prior year.
Shares in Henderson Smaller was down 2.3% on the day Friday at 818.42p, having declined further since the year-end.
Henderson said the underperformance was due to a negative contribution in gearing, which started the year at 8.5% and finished at 8.4%. Amid a fall in markets the use of gearing stood as a negative contributor to the trust's performance.
Market-wise, the year was a negative one for equity markets, as the first half of the period was marred by limited progress on Brexit negotiations, increased interest rates by the US Federal Reserve and trade tensions between the US and China.
However there was an improvement in the second half, on an oil price rally, a more dovish tone from the Federal Reserve and optimism over trade negotiations.
Henderson Smaller declared a final dividend of 15.0p, leading to a total payout of 23.0p, up from 21.0p the prior year.
"Populism has never been a more dominant influence in the political leadership of Western countries, and yet economies continue to grow, albeit at a slow pace, and unemployment continues to fall, creating new opportunities for investors," said Chair Jamie Cayzer-Colvin.
"Global markets have responded positively to the latest round of interest rate signals emerging from the US and the expectation now is for lower rates, rather than rate increases, in the world's largest economy. Whilst progress on talks between the US and China on global trade has been mixed, any move forward here is likely to provide further support for investors," Cayzer-Colvin added.
Related Shares:
Henderson Smaller Companies Trust