Further cash returns to investment trust shareholders are likely over the next 12 months, according ...
Further cash returns to investment trust shareholders are likely over the next 12 months, according to Scottish Value Trust chairman Simon McClean.
Following the release of the £97.5m trust's results for the 12 months to 30 September, a number of its larger holdings have come up with proposals either to restructure or return cash to investors, McClean said.
JF Japan OTC, Baring Emerging Europe and Asian Technology Trust have recently announced measures to realise value for shareholders, he added, while Thompson Clive Investments and Enterprise Capital Trust, both long-standing investments of the trust, have already returned cash this year.
'We believe there will be further progress from both in the current year,' McClean said.
The trust's NAV fell by 5.9% to 151.7p on a total return basis over the 12 months to the end of September, against a fall of 24.7% in the its benchmark, the FTSE World index.
'The outperformance over the benchmark has been accomplished through being substantially underweight the US, which accounts for more than half of the index, and through investing a substantial portion of the portfolio in either absolute performance or hedged investments,' McClean said.
The introduction of hedge funds and other hedged investments in 2001 has largely been completed and now accounts for 28% of the portfolio, he added.
The trust currently has gearing of about 17%, but with the absolute performance investments, effective exposure to equity markets is approximately 90%, said McClean.
'The board continues to believe gearing has the potential to enhance long-term returns for shareholders,' he added.
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