27th Sep 2013 13:40
LONDON (Alliance News) - New Star Investment Trust PLC Friday said it underperformed over the full-year because it adopted a defensive strategy in a bullish market, though it intends on maintaining its cautious approach for the time being.
New Star had significant holdings in cash and securities affected by weak commodity prices and said its underperfomance also arose from its relatively small holdings in US equities, which performed strongly over the period.
Its net asset value saw returns of 7.7% for the year to June 30, against a 9.8% decline for the corresponding period last year, but that did not match its chosen comparative index.
The Investment Management Association's Mixed Investment 40-85% Shares index gained 15.0%. New Star said this comparison is appropriate because it has "since inception been invested in a broad range of asset classes."
New Star made a GBP5.1 million pretax profit, up from last year's GBP7.9 million pretax loss. This followed an improvement in its gains on investments at fair value to GBP5.0 million, up from a loss of GBP7.8 million this time last year.
New Star shares were Friday quoted at 70.80 pence, up 2.3 pence, or 3.4%.
By Samuel Agini; [email protected]; @samuelagini
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