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Seneca Global results reflect benefit of AJ Bell IPO

Seneca Global results reflect benefit of AJ Bell IPO – Seneca Global Income & Growth has published results covering the year ended 30 April 2019. Over that period, the trust returned 7.6% in NAV terms and 6.0% in share price terms, just behind the benchmark which returned 8.2%. The managers have been reducing the fund’s equity exposure in anticipation of slowing growth and falling markets. For now though markets continue to edge higher, the All-Share Index returned 2.6% and proved much more volatile than the trust’s NAV. The World ex UK index returned 11.8%.

The dividend was raised by 3.4%, ahead of inflation of 2.1% (as measured by the CPI).

Share issuance and buy backs were closely matched over the year (£3.66m in versus £3.77m out) as the trust’s discount control mechanism worked to keep the shares trading close to asset value.

Extract from the manager’s statement

…a fair proportion of the performance came from UK holding AJ Bell. AJ Bell was listed in December last year and performed very well during the many years it was held by your Company as an unlisted investment as well as at listing (the IPO price was well above the carrying value) and during the months since listing.
Elsewhere in the portfolio, negative contributors included overall positioning in UK equities, US equities and safe-haven bonds. In the UK we focus on medium-sized companies which in general underperformed their larger counterparts. We have had a zero position in US equities for a little while now and this hurt us as they continued to perform well both in absolute terms and in relation to equities elsewhere. In addition, we have a zero position in safe-haven bonds which, like US equities, also performed well over the year.”
[QD comment: The objective of delivering annual returns 6% ahead of inflation is a challenging one and Seneca Global Income & Growth can be forgiven for missing that target this year, especially given that its three year numbers are still well ahead of the benchmark (36.7% versus 20.5%) and the trust is delivering returns ahead of the UK market but with less volatility.]

SIGT : Seneca Global results reflect benefit of AJ Bell IPO

 

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