M&G High Income Investment Trust has announced results for the year ended 31 May 2015. On a net asset value basis, each Package Unit delivered a total return of 8.8% over the 12 months to 31 May 2015. This was above the returns of the FTSE 350 Higher Yield Index and the FTSE All-Share Index, which rose 2.6% and 7.5% respectively over the same period. The discount narrowed from 4.9% to 3.3%, the mid-market price at the period end being 176.0p and the NAV 182.06p. Each Package Unit produced a total return of 10.7%.
Revenue for the period was 6.44p per Package Unit, 4.9% higher than the total of 6.14p reported at the same stage last year. During the 12 months to 31 May 2015, the Company has declared total
dividends of 6.6p per Income share, comprising two interim dividends of 1.5p, a third interim of 1.6p and a fourth interim of 2.0p. This represents an increase of 8.2% compared with the total of 6.1p per Income share for the previous year. Currency movements affected the revenue but they say that so far this year, dividend announcements have generally been positive and they have seen a continuation of the trend in special dividends, with, notably for the Company, Synthomer, Direct Line, Booker and Jupiter Fund Management all returning spare cash to shareholders.
M&G High Income is approaching the end of its planned life and is due to be wound up on 17 March 2017. The Board believes it would be beneficial to shareholders as a whole, for the Company to have the ability to use derivatives, including equity index options, in certain market conditions during the run up to the wind-up date, so as to lock in a proportion of the value of the Company’s assets while retaining exposure to a market increase, if it is in the best interests of shareholders to do so. The aggregate exposure of the Company to derivatives will not exceed 35% of its gross assets at the time at which any derivative contract is entered into. Shareholders will need to approve the proposed changes to the investment policy of the Company at the AGM (resolution 10).
There is no manager’s report in the announcement.
MGHC / MGHI / MGHU / MGHP : M&G High Income wants to use derivatives