LONDON (Alliance News) - Aberdeen Standard Equity Income Trust PLC said Wednesday it suffered a "poor" first half, underperforming its benchmark.
At March 31, the trust's NAV per share stood at 439.72 pence compared to 485.00p at September 30, a 9.3% decrease.
The trust's net assets decreased by the same amount in the period, slipping to GBP216.2 million from GBP238.4 million.
"It was very much a period of two halves, with the final quarter of 2018 being the worst fourth calendar quarter for the British market since 1987, and mid and small cap companies, in which we are heavily invested, underperforming large cap stocks. This pattern was reversed in the first quarter of this year, but our relative improvement was not sufficient to make up much of the ground lost in the last three months of 2018," said Chair Richard Burns.
Aberdeen Standard Equity Income's NAV total return in the first half was negative 7.0% compared to its benchmark returning negative 1.8%.
Portfolio Manager Thomas Moore added: "The portfolio's poor performance during the period can be attributed to two factors: adverse market conditions during the first half of the period and some sector and stock positions performing poorly."
Moore said the stock underperformance was concentrated in five sectors: Construction & Minerals, Travel & Leisure, Support Services, Oil Equipment, Services & Distribution and Banks.
Moore explained: "Within Construction & Materials the key detractors to performance were Tyman PLC and Kier Group PLC. Tyman was sold off aggressively on fears over the impact of rising rates on the US housing market. Kier Group's share price declined following the announcement of a rights issue designed to strengthen its balance sheet following a change in risk appetite by the banks towards the construction sector after the collapse of Carillion.
"GVC Holdings PLC is the portfolio's largest position in Travel & Leisure and it fell sharply on concerns over growing regulatory challenges in some of its major markets. Within Support Services the key detractors were Staffline Group PLC and Equiniti Group PLC both of which suffered from severe valuation de-rating. John Wood Group PLC is the only position in the Oil Equipment, Services & Distribution sector and it was adversely affected by fears over the impact of slowing global growth on their order book. Within Banks, CYBG PLC/Virgin Money declined on fears over the earnings impact of intensifying mortgage market competition."
Aberdeen Standard Equity Income declared an interim dividend of 9.8p, up 11% on the 8.8p distributed in the first half last year.
Shares in Aberdeen Standard Equity Income Trust were down 1.2% Wednesday at 430.00 pence each.