Athelney Tst. Share Price (ATY)

I hope this is not the start of another slow downward spiral.

My purchase for elder son in his SIPP was executed today. Time will determine the wisdom or folly of this, but as a dividend hero, I am confident of solid if unspectacular return

Changes to the asset manager's fee structure show its intention to build on a strong dividend record built over 2 decades by Athelney Trust. As you can read in new research note here:

https://www.equitydevelopment.co.uk/research/specialist-uk-smaller-companies-investor

ATY should be of interest to investors tracking the relative undervaluation of UK small caps vs their international equivalents, and indeed the segment’s underperformance generally. Over the longer term a small cap weighting would be regarded as a core component of a diversified portfolio. It has, however, materially lagged mid and large caps in recent years.

Those who see this differential as cyclical and temporary, rather than structural, will see potential for resumption of long-term outperformance. ATY should be of interest to investors tracking the relative undervaluation of UK small caps vs their international equivalents, and indeed the segment’s underperformance generally.

ATY holds a diversified portfolio of established, cash generative businesses, with proven management and competitive advantages in their specific industry niches. The core investment focus is listed UK smaller (£50-230m market cap) companies, all at a stage of their lifecycle where they pay regular dividends. This support ATY’s own distributions and core commitment to maintain progressive distributions.

At today’s share price ATY is underpinned by its 5.5% yield (historic), backed by a 21-year history of distribution growth and commitment to maintaining membership of a small group of ‘dividend heroes’. The mid-price is also at a 9% discount to end October NAV/share.

New research note: https://www.equitydevelopment.co.uk/research/yield-attractions-with-small-caps-out-of-favour

"Small cap experts with 21 years of dividend growth"

Athelney Trust (ATY) is a Main Market listed investment trust with a portfolio which is focused on small (£50-230m market cap) UK companies. All investments are liquid, either fully LSE listed or via a trading facility on AIM or AQSE.

Although the strategy is total return, the portfolio is deliberately weighted towards assets with strong income generation characteristics. This supports ATY’s commitment to progressive distributions, reflected in its membership of the AIC’s ‘Dividend Heroes’, a short list of investment companies that increased distributions for at least 20 consecutive years.

The shares trade at a c 10% discount to 204.7p NAV/share (31 January 2024) and ATY agreed a 9.8p/share dividend in FY23 equivalent to a 5.3% yield. The underlying portfolio is also well diversified by company and sector, invested in entities in sound financial condition and well positioned competitively.

We see the portfolio as well placed to benefit as market sentiment towards UK smaller companies and investment trusts progressively improves. We would consequently expect the trust’s NAV to appreciate, along with the existing high discount of its shares to NAV diminishing.

Link to report: https://www.equitydevelopment.co.uk/research/small-cap-experts-with-21-years-of-dividend-growth