31st Jan 2014 14:13
LONDON (Alliance News) - Invesco Perpetual Select Trust PLC Friday said there is "considerable excess economic capacity" in the UK, as its results for the half year showed it fared broadly well against its benchmarks over the first six months of the year.
The company's share capital comprises four share classes: UK Equity Shares, Global Equity Income Shares, Balanced Risk Shares and Managed Liquidity Shares, each having its own separate portfolio of assets and attributable liabilities.
In net asset value terms, with dividends reinvested, the UK Equity Portfolio returned 8.9% over the six months to the end of November 2013, compared to its benchmark, the FTSE All-Share Index, whose total return was 3.9%.
"The share price, however, fell by 0.2% over the same period as a very short-lived and relatively large premium at the year end in May evaporated," the company said.
In the six months to November 30, the Global Equity Income Portfolio returned 4.6%, according to the company, as did the share price, compared to its benchmark MSCI World Index total return over the period of 3.3%.
"The returns from the two equity-based classes were very good reflecting the respective portfolio managers' continued success in implementing a policy of identifying companies with attractive valuations and high levels of free cash flow generation," Patrick Gifford, chairman, said in a statement.
The Balanced Risk Portfolio returned 0.4% compared to a return of 2.8% for its benchmark, 3 month Liborplus 5% pa. The share price fell by 0.7% as the discount widened slightly.
"The Balanced Risk share class had a more difficult experience in the period and underperformed its benchmark. It was hurt by the sell-off in May and June which saw high correlation between asset classes," Gifford said.
"Thereafter, while it held an overweight position in equities this was not enough fully to offset the weak performance seen from both bonds and commodities. It is worth noting, however,
that performance since the implementation of the Balanced Risk strategy in February 2012 is still close to its benchmark despite the recent experience," Gifford said.
"The board remains confident in both the methodology of the investment approach and the asset allocation parameters within the portfolio," Gifford said.
In net asset value terms, the company's Managed Liquidity Shares, whose objective is derived from cash returns, were unchanged and there was a small fall of 0.2% in the share price, according to the company.
"Absolute performance was aided by generally strong markets in developed economies based on very stimulative monetary policy. Unfortunately this policy also meant that it was impossible to earn significant interest on cash and near cash holdings to the detriment of net revenue on the Managed Liquidity share class," Gifford said.
Invesco Perpetual Select Trust shares were quoted up 1.0% at 147.01 pence Friday afternoon.
By Samuel Agini; [email protected]; @samuelagini
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