Seneca Global Income & Growth – Walk the walk
Marten & Co has published a note on a company in the flexible investment sector.
In mid-2017, Seneca Global Income & Growth Trust’s (SIGT’s) manager set out a clear road map of how it would gradually reduce the trust’s weighting to equities over the next couple of years. The manager has been sticking to this plan and, in this report, an update is provided on the changes that have been made to SIGT’s portfolio. The manager expects to see a global recession in 2020 with a global bear market in equities commencing in 2019. The aim is that SIGT’s portfolio will be meaningfully underweight equities as developed markets and economies reach their peak phase (during which equities traditionally show their poorest performance).
Multi-asset, low volatility, with yield focus
Over a typical investment cycle, SIGT seeks to achieve a total return (the capital return plus dividends and other income reinvested) of at least the consumer price index (CPI) plus six per cent per annum, after costs, with low volatility, and with the aim of growing aggregate annual dividends at least in line with inflation. To achieve this, SIGT invests in a multi-asset portfolio that includes both direct investments (mainly UK equities) and commitments to open-and-closed-end funds (overseas equities, fixed income and specialist assets). SIGT’s manager uses yield as the principal determinant of value when deciding on its tactical asset allocation and holding selection.