Diverse Income’s interim results, covering the six months ended 30 November 2015, show the fund generating a return on net assets of 6.4% and a return to shareholders of 7.0%. They also declared two quarterly dividends of 0.65p each. The Board is rebalancing the quantum of the four quarterly dividends to make them more equal in magnitude across the year. The returns were well ahead of the FTSE All-Share Index which returned -8.0%. The FTSE SmallCap (excluding Investment Trusts) Index was down 3.6% and the AIM All-Share Index was down 4.6%.
Diverse Income holds a Put option covering approximately one-third of the Company’s assets, which would be expected to rise in value should the FTSE 100 fall back significantly further.
The managers say, overall, the portfolio has held up well over this unsettled period. However, there are inevitably some stocks where the share price falls back. The most adverse in the period was Juridica Investments, a business that finances companies involved in legal action. In general, most of the cases they fund have been at least modestly successful, but they were caught out by a couple of cases where the verdict went against them in the period. In addition, the TalkTalk share price fell back after its IT systems were hacked, resulting in some of their clients’ bank details being stolen. The best performer in the period was Conviviality Retail, where the profits were substantially upgraded following its acquisition of Matthew Clark, a major wholesaler of alcoholic beverages. BioVentix also performed well again in the period and has been a very successful holding in the portfolio for over three years.
DIVI : Diverse Income well ahead of UK market