17th Feb 2016 08:55
LONDON (Alliance News) - Herald Investment Trust PLC Wednesday reported it outperformed its comparative index in 2015, helped by a strong performance from its UK portfolio, which makes up around 64% of its assets.
The trust reported a total return on net asset value of 8.4%, outperforming its composite comparative index, which saw a total return of 5.9%.
It also outperformed the Numis Smaller Companies Index plus AIM but excluding investment companies, which saw a return of 5.4%, and the Russell 2000 small cap Technology Index, which saw a total return of 6.2%.
Herald Investment Trust noted that takeovers had been important during the year, delivering half of the return for the whole portfolio in 2015. This particularly helped the UK element of its portfolio, but the trust noted that whilst some consolidation is appropriate and helpful, the shortage of capital in the UK market meant there had been no UK consolidators, so most companies had been sold to overseas buyers and a few to private equity.
The flight of capital from the quoted UK equity market has reached a point where the trust "must consider reallocating capital", it said.
The UK element of its portfolio saw a 10.4% return, whilst the total return from the North American segment of its portfolio was 8.7%. Whilst the US continues to lead with innovation, the trust said, it has found valuations full.
"There are a number of economic challenges reflected in volatile markets since the year end, but we remain confident that Herald's remit has relative attractions, not least because of increasing market inefficiencies, and are excited that a potential buying opportunity will emerge in the US," the trust said.
Shares in Herald Investment Trust were up 1.3% at 643.40 pence Wednesday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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