Aberdeen Diversified Income & Growth makes 3.7% in first six months – Aberdeen Diversified Income and Growth Trust has reported on the year to 30 September 2017. This period covers just a few months of its new investment objective and policy (which was approved by shareholders on 30 March 2017). The highlights are:
- net asset value calculated with debt at fair value up by 7.6% over the year ended 30 September 2017 on a total return basis
- discount, calculated using an NAV with debt at fair value and excluding income, improved from 6.9% to 3.1% narrowed further to 2.3% at the time of writing
- dividend, at an annualised rate based on the fourth interim dividend, would have equated to a dividend yield of 4.3% based on the year end share price
- total shareholder return was 14.6%
The managers say that, during this period, most asset classes performed well but developed market government bonds were the notable exception as investors anticipated monetary tightening by the major central banks. Global equities were the standout performer – the MSCI World Index returned +15% in sterling terms with the bulk of gains being generated in the first six months – in reaction to the improving outlook for economic growth in most regions. The UK equity market returned +11.9% and, despite marking time over the summer in the face of uncertainties over Westminster politics and Brexit, the All Share Index ended the period close to an all-time high.
For the six month period following the change in investment policy at the AGM on 30 March 2017, the shares delivered a total return of +7.0% comprising of an NAV increase (including reinvested dividends) of +3.7% and the benefit of an improved rating. (The shares ended the period on a 3.1% discount to NAV, calculated excluding income and with debt at fair value, compared to 6.9% at 30 September 2016.) The main contributors to portfolio performance were low volatility equities (+1.6% contribution to portfolio return), asset backed securities (+0.6%), UK equities (+0.4%) and infrastructure (+0.4%). Insurance linked securities were the most notable laggard (-0.6%).
Emerging market debt made a small positive contribution to portfolio performance (+0.2%). Similarly, portfolio gearing – via the 2031 debenture – had a positive effect on performance during the period when the impact of the gilt hedge is taken into account.
ADIG : Aberdeen Diversified Income & Growth makes 3.7% in first six months