City Natural lags benchmark, ETF to blame? – City Natural Resources says that on 30 June 2017 its net asset value stood at 132.7p, giving a net asset value total return for the year of 7.9%. The benchmark index returned 17.7%. The shares returned 17.8% as the discount narrowed from 22.7% to 17%. This year’s fourth interim dividend of 3.02 pence per share brought the total dividend for the year to 5.60 pence, the same level as was paid last year and the year before. Earnings were 5.08p; they made up the balance from reserves which stand at 5.9p per share.
City Natural’s CULS mature at the end of September next year and the board has begun the task of considering how this will be best managed in the interests of shareholders.
The manager’s report is long on the industry backdrop and very short on reasons why the fund underperformed by 10%. They say zinc miner Trevali made a stand-out contribution to performance and that “the GDXJ gold equity ETF relaxed its market cap restrictions to incorporate midcap producers and reduce the weighting towards smaller-cap stocks. Illustrative of the growth of passive investment, this technical rebalancing caused considerable underperformance among smaller capitalised stocks that the company typically invests in“.
CYN : City Natural lags benchmark, ETF to blame?