24th Feb 2014 13:00
LONDON (Alliance News) - New Star Investment Trust Monday said it underperformed global equity markets in the first six months of its current financial year, with cash making up too heavy a proportion of its assets.
In a statement, the trust said its total assets rose by 3.1% to GBP75.6 million over the half-year to December 31.
Over the same time period, the IMA Mixed Investment 40-85% Shares Index gained 6.6%, the MSCI AC World Total Return Index gained 6.3% and the MSCI UK Total Return Index gained 10.2%.
At the period end, the trust's net asset value per ordinary share was 106.44 pence. One month later, it fell to 105.69 pence.
"The principal reasons why your company lagged global equity markets during the period under review were its cautious positioning, with cash and cash equivalents accounting for a substantial proportion of its assets, and its holdings in natural resources and emerging markets," Geoffrey Howard-Spink, chairman, said in a statement.
"The net revenue profit for the period was GBP179,000, compared with GBP172,000 in the prior period," Howard-Spink added.
"As in previous years, your directors are not recommending payment of an interim dividend to shareholders."
The company's shares continue to trade at a significant discount to net asset value. The board continues to review the situation, but they do not anticipate a significant change in the near future," he said.
The discount means the company's shares are trading at less than the value of its assets less its liabilities.
Sometimes trusts engage in share buy-backs to remove the discount.
The trust's shares were Monday untraded at 71.00 pence.
By Samuel Agini; [email protected]; @samuelagini
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