25th Aug 2015 15:21
LONDON (Alliance News) - Jupiter Dividend & Growth Trust PLC on Tuesday said its net asset value, which refers to the difference between its assets and liabilities, increased by 4.8% in the first six months of 2015.
The trust said its NAV was GBP52.9 million at the end of June, compared with GBP50.5 million at the end of December.
By comparison, the trust said the FTSE All-Share Index, its benchmark, rose by 3.0% on a total return basis during the same period.
Chairman Martin Boase said the UK economy looks set for "solid growth" over the next 12 to 18 months, notwithstanding any anxiety over its looming EU referendum.
"We therefore expect a positive environment for your company's companies to operate in. They are well positioned for further growth and have the potential to deliver good returns and rising dividends," Boase said in a statement.
Boase said that historically low interest rates and quantitative easing, together pursued by central banks in the UK and the US in the wake of the financial crisis of 2007-09 to stimulate economic recovery and growth, have boosted asset prices and triggered a search for yield by investors.
"As assets become more fully valued their prices can become more susceptible to shifts in market sentiment, particular if, as finally seems likely, the UK and US central banks feel confident enough to make a token increase in interest rates in the face of inflation rates well below their targets," Boase said.
"Thus, we think a benign outlook for the UK economy is not incompatible with higher levels of volatility. In particular, when bond yields are ultra-low, capital values can fluctuate more widely than in normal circumstances. That is likely one reason why Mario Draghi told debt markets to 'get used to' higher volatility," the chairman added.
Jupiter Dividend & Growth Trust shares were down 17% at 3.75 pence late Tuesday.
By Samuel Agini; [email protected]; @samuelagini
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