Seneca Global Income & Growth reports an NAV total return of -1.3% for the six months ended 31 October 2015. This is below the return on its benchmark of 1.8%. However SIGT has outperformed most indices and its competitors. On a capital only basis Seneca Global Income & Growth reported a 3.2% fall in NAV as compared to a 7.3% fall in the capital value of the FTSE All-Share and an 8.5% fall in the capital value of the FTSE World Index over the six months to the end of October 2015. The average net asset value decline of the Global Equity Income sector was 5.3%. The return to shareholders was 3.6%. The quarterly dividend has been hiked by 5% to 1.47p. Seneca Global Income & Growth also reports annualised volatility of 7.6% for the period – which compares pretty well with an equivalent figure for the FTSE All-Share Index of 13.0%.
The Board has recommitted to its objective of keeping the shares trading close to asset value and says it will be putting forward any necessary resolutions at the next AGM in July 2016 to introduce a discount control mechanism that would aim to regulate the share price at close to its net asset value.
The managers’ report says the largest positive contributions to returns came from UK equity holdings, where the emphasis on mid cap companies was beneficial. Other areas making a positive contribution included property and private equity (with the Company’s position in A J Bell Holdings being revalued upwards following a partial sale of the position at a price a little above the carried value). Perhaps unsurprisingly, the major detractors were the equity market positions in Asia, emerging markets and commodities, given the negative sentiment surrounding slowing growth in China and disappointing economic data more generally.
On drilling down further into individual contributors to returns the top four positive contributions came from within the UK equity holdings. In particular the bid for Amlin, which was a holding that had already performed well, was beneficial. The emphasis on mid cap holdings in the UK portfolio was a significant contributor, as they generally outperformed their large cap brethren.
Detractors from returns, perhaps unsurprisingly, lay mainly within the third party funds used to gain exposure to Asian and emerging market equities. The main exception being Blackrock World Mining, which continued to suffer from a de-rating following the announcement of a major write down within the portfolio, together with very negative sentiment towards mining companies.
SIGT : Seneca Global Income & Growth outperforms indices and competitors