26th May 2015 17:01
LONDON (Alliance News) - Securities Trust of Scotland PLC Tuesday said it generated a positive return in its last financial year but underperformed its benchmark index.
In a statement, the trust said its net asset value total return was 12.5% in the year ended March 31, while the MSCI World High Dividend Yield Index delivered 13.4%.
"We marginally underperformed our benchmark for the full year. Our North American and UK holdings performed well, but this was not enough to offset our European (ex UK) and Asian performance. In sector terms, weak performances in healthcare and consumer discretionary had the biggest impact," investment manager Alan Porter said.
"Six years into the current bull market, the key positive supports to equity markets remain the relative yield attractions of equities versus other asset classes, and the anecdotal evidence that global fund managers lack conviction and hold high levels of cash. What is clear is that there is a lot of margin of safety around dividends but little around valuations in global equity markets in aggregate. Finding positive insight at the individual stock level is increasingly difficult, which is to be expected at this point of the stockmarket cycle," Porter said.
"However, we continue to believe that a diversified portfolio of companies, combining attractive dividend yields and the potential for dividend growth, will stand us in good stead," Porter said.
Shares in the trust closed down 0.4% at 143.75 pence on Tuesday.
By Samuel Agini; [email protected]; @samuelagini
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