World Trust Fund has announced its interim results for the six-months ended 30 September 2015. During the period, the company’s NAV per share fell 12.9% b(in Sterling terms) modestly outperforming both the MSCI AC World Index (ex USA) Index, which fell 13.5% but underperforming the MSCI AC World Index, which fell 11.0%. The share price fell 14.3% during the period and so the discount widened a little during the period. An interim dividend of 1p per share has been announced in respect of the year to March 31st, 2016 (payable on January 15th, 2016, to shareholders who appear on the register on December 18th, 2015). The managers say that, with the Fund at a discount of 14%, and the underlying portfolio discount at 23.6%, the World Trust Fund is effectively trading at a combined discount of 34.3%. The managers say that this is the highest discount since the 2008 Global Financial Crisis.
The managers say that a number of investments in Europe, particularly those focused on small-cap companies, fared well. French holding company, Eurazeo, gained 4% amid negative equity markets. JPMorgan European Smaller Companies, Henderson Smaller Companies, and Invesco Perpetual UK Smaller Companies rose 10% on average. However, investments in emerging markets, particularly emerging Asia, hurt performance. Emerging markets exposure was trimmed from a peak of more than 28% in January 2015 to approximately 19% as of the end of March. The Fund maintained an average emerging markets exposure of 21% throughout the six-month period ended 30 September 2015 and the manager’s say that these emerging markets investments hurt the Fund’s return. The company says that that, amid the uncertainty, average discounts for the Fund’s investments widened which further hurt returns.
In terms of outlook, the managers say that, in their view, global equity market volatility continues to be elevated due to both economic and geopolitical concerns, and that they expect such volatility to continue in the foreseeable future. However, they say that, amid this market volatility, the discounts of the investable assets universe also react, thus creating potential investment opportunities for the Fund.
World trust fund trading at highest combined discount (34.3%) since the financial crisis : WTR