Gabelli Value Plus+ Trust has announced its first set of interim results for the period between 19 February and 30 September 2015. During the period the trust’s NAV fell 6.4% in total return terms underperforming the S&P 500 which fell 5.5% during the period (in Sterling adjusted terms). Share price total return during the period was a fall of 7.0%. The company says that excluding the initial 1% issue costs, the NAV return was in line with the total return (in sterling) of the US stock market index but that, in their view, there is little insight to be gained by analysing performance over such a short period. Arguably reflecting this, the annual report does not detail on specific stock contributions to performance.
The Company’s says that, whilst its prospectus had indicated an intention to declare an interim dividend in respect of the period to September 2015, the Board has now decided that it would not be in shareholders’ interest to declare a dividend at this interim stage. They say that the revenue return (after costs) during the period was very modest and would be further reduced by the requirement to audit the interim accounts if the company wished to make a distribution.
The company says that the recent period has been characterised by volatility in equity markets, partly rooted in concerns about economic stresses in emerging economies, particularly in China, and partly owing to some disappointment from corporate earnings in the U.S. linked to the strong dollar. These issues have been lent a sharper edge by the prospect of the U.S. Federal Reserve raising interest rates for the first time since 2006. However, more positive considerations include a U.S. domestic recovery that appears to be relatively resilient, the beneficial impact of lower energy and commodity prices (other than for directly-dependent sectors and economies) and the absence of inflationary pressures, which should allow the central banks to adopt a very gradual approach to raising interest rates. They also say that, in their view, where investor sentiment may have been complacent during the early summer, caution is now more evident which, for those of a contrarian inclination, can be a positive sign.
Gabelli Value Plus+ Trust holding fire on 1st dividend payment : GVP