CT Global Managed Portfolio (CMPG) released its annual results for the year ended 31 May 2023. NAV total return was -7.4% for the financial year, underperforming the total return of the FTSE All-Share Index of +0.4% by -7.8% points. Share price total return was -2.1%. The company increased its annual dividend by 8.3% to 7.20p per share for a yield of of 6.0% at 31 May 2023, based on total dividends for the financial year of 7.20p per income share. This compares to the yield on the FTSE All-Share Index of 3.7%. Dividends are paid quarterly.
The total NAV return per share is 143.3% since launch on 16 April 2008, the equivalent of +6.1% compound per year. This has outperformed the total return of the FTSE All-Share Index of +128.0%, the equivalent of +5.6% compound per year.
Commenting on the performance and the outlook, Chairman David Warnock added;
“The dominant influence on performance over the past year was what happened to discounts of share prices to net asset values of many underlying investments. The average discount for the investment trust sector steadily widened from 8% at the start of the year to 16% by the end. There is no one reason that caused discounts to widen, however the overall economic environment, with sharply rising inflation and the response from monetary authorities to raise interest rates after more than a decade of being at very low levels, was an important factor. Most companies experienced a fall in their share price over the year and this transmitted uncertainty through to investors. Uncertainty created adverse sentiment amongst investors who became very risk averse and cautious. This was reflected in widening discounts of share prices to net asset values across the investment company universe.
“As with last year, there is a heightened level of uncertainty pervading through financial markets. The war in Ukraine, political upheavals in the UK and elsewhere and levels of inflation not previously experienced this century are all factors. In order to combat the latter, interest rates have been raised faster and higher, and look likely to remain higher for longer than had been expected. The fear of recession is also a headwind to progress in stock markets which, not surprisingly lack confidence. Investment companies have been de-rated, as measured by average share price discounts, to levels not seen since the global financial crisis of 2008/2009.
“Whilst the chances of a recession over the next year have increased, valuations of UK companies in particular have already gone some way to take account of this possibility. They are at historically low levels both in absolute and relative terms and on a longer-term perspective offer the patient investor the prospect of attractive returns. As always, the Manager’s focus is on selecting only the highest quality investment companies with experienced managers in the belief that this will serve shareholders’ interests best.”
CMPG : CT Global Managed Portfolio struggles with rising discounts