(Alliance News) - BMO UK High Income Trust PLC said Friday it underperformed against its benchmark for its recently ended financial year, as the trust warned that financial markets fact the most uncertain outlook "since 1974".
For the year to the end of March, the investment trust reported a net asset value negative return of 21.4%, compared to the FTSE All-Share Index, which reported a negative return of 18.5%.
Net asset value per share as at March 31, was 76.66 pence, down 25% from 102.39p the same date the year before.
BMO UK High Income's share price at the end of March was 69.5p, reflecting a 9.3% discount to net asset value.
Shares in the trust were up 0.6% at 80.00 pence on Friday in London.
BMO UK said that its portfolio performed well for most of the year, following the UK general election outcome in December and greater certainty surrounding Brexit.
However, UK equities weakened sharply as the full implications of the Covid-19 outbreak became clear in mid-to-late-March, and nations responded with restrictions on movement and businesses to curb the spread.
BMO UK High Income declared a dividend of 5.21 pence per share, up 3.4% from 5.04p the year before.
"Financial markets face the most uncertain outlook, certainly since 1974. Central Banks and Governments throughout the Western World have responded to the Covid-19 pandemic and the necessary restrictions to defeat it by creating vast liquidity and attempting to mitigate the economic effects of the restrictions by providing funds and liquidity directly to companies. It remains to be seen how effective this support will prove to be and how quickly economic activity will resume," said Chair John Evans.
"As I said above these are difficult and uncertain times for a UK orientated Income Trust and we are in for a testing year," Evans added.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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