15th Jul 2015 10:15
LONDON (Alliance News) - The Independent Investment Trust PLC said its performance was better than two comparative indices in the first half, citing the Conservative Party's surprise majority victory in the UK General Election in May.
The trust generated a net asset value total return of 13.9% in the six months ended May 31, compared with the total returns of 7.5% and 6.0% notionally attributable to the FTSE All Share Index and the FTSE World Index.
"The margin of our outperformance owed much to a UK General Election result that, although unexpected by us, was fortuitously anticipated in our large housebuilding stake, which performed exceptionally well in the last three weeks of the period," McDougall said in a statement.
McDougall said that valuations are at "worrying levels" in most markets, though he noted "comfort" in that equity market valuations are "less extreme" than those in bond markets.
"The first signs of concern in bond markets, a further source of worry to us, have been blithely ignored by equity markets. We continue to rely heavily on our belief in the quality of the businesses in our portfolio to justify our fully invested position," the chairman said.
The interim dividend was maintained at 2 pence per share, with Chairman Douglas McDougall saying that the trust was acting cautiously, though a special dividend could be declared at the end of the year.
"Special dividends remain a significant feature of our revenue account and a small number of holdings, any of which may have to be sold as a result of changes in their circumstances, account for a large proportion of our total revenue. These factors have led us to adopt a cautious view in maintaining the interim dividend. In the event that the revenue account remains buoyant over the rest of the year, the same considerations make it likely that this will be reflected more in the form of a special dividend than in the form of an increased final," the chairman said.
Shares in the trust were up 0.7% at 340.95 pence late Wednesday morning in London.
By Samuel Agini; [email protected]; @samuelagini
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