Diverse Income Trust interim results for the six months ended 30 November 2014 show the fund generating a return on net assets of -3.2% and a return to shareholders of -1.9%. the first half dividend rose from 0.8p to 0.9p. The fund is skewed towards smaller companies relative to the FTSE All-Share Index and this accounts for the fund’s underperformance of that index – the FTSE All-Share Index fell by 1.7% while the FTSE Small cap. ex Investment Trusts Index fell by 6.6% and the AIM Index was down 11%.
The manager’s report says, in terms of attribution, the detractors to performance included Stobart Group, which has sold half of its trucking business to degear the company. The manager says Stobart intends to build up usage of Southend Airport and its biomass business, but as yet this growth momentum is still to come through. The share prices of both DX Group and UK Mail were affected by adverse sentiment in the parcels market and with Amazon announcing it was going to deliver its parcels directly in future, and CML Microsystems, a business that designs silicon chips that control memory boards, fell back when one of its major distributors pulled out of their sector.
Stocks in the portfolio that rose during the period included Powerflute, the paper making company, which completed an acquisition that substantially enhanced its earnings and hopefully its dividend growth going forward. The report also mentions Bioventix which announced good figures and substantially increased its dividend for the year; the report says that ,although its share price has already performed strongly, it is still yielding around 3.6% on a prospective basis with the increase in its dividend payment.
DIVI : Diverse Income held back by small cap. weakness