3rd Jul 2018 09:10
London, UK, 2 July 2018
Edison issues review on TR European Growth Trust (TRG)
TR European Growth Trust (TRG) lead manager Ollie Beckett says he and his team are still finding plenty of investment opportunities, in spite of the global bull market in equities arguably being closer to the end than the beginning. The managers focus on attractively valued smaller companies in continental Europe, where improving returns or management changes have not yet been appreciated by the wider market. After a stellar year of performance in FY17 (NAV and share price total returns of +54.0% and +75.5% respectively), recent returns have been more muted relative to the benchmark and peers, and the trust has moved from a slight premium to NAV to a discount, more in line with long-term averages. Beckett has recently taken profits in holdings where valuations looked stretched, and has increased TRG's gearing to take advantage of a dip in investor sentiment. The stock list is towards the longer end of the historical range.
At 29 June 2018, TRG's shares traded at an 8.9% discount to cum-income NAV. While this represents a substantial widening from a 10-year high premium of 3.2% seen in November 2017, and an average discount of 4.2% over the past 12 months, it is actually slightly narrower than average discounts over three, five and 10 years. TRG's shares currently yield 1.4% based on the FY17 dividend.
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