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(Alliance News) - European Assets Trust PLC said Monday it performed in line with its benchmark for the first half of 2020, through a positive investment performance in spite of a challenging market backdrop.
The trust's net asset value negative return was 3.5% for the six months to the end of June, the same level as the EMIX Smaller European Companies excluding UK Index.
Net asset value per share as at June 30 was 108.47 pence, down 9.1% from 119.28p the same date the year before, and 6.6% from 116.17p at the end of December.
Shares in European Assets Trust were down 0.5% at 101.55 pence on Monday in London.
The trust said that it was a challenging period, with many stocks in its portfolio affected by the Covid-19 pandemic, leading to a reduction in dividend income the trust receives from its holdings.
However, there were still strong performers, namely the larger holdings within the healthcare sector, which benefited from their defensive characteristics as well as expectations of larger demand as a result of the health crisis. Examples include Italian-listed diagnostics tests provider Diasorin and Swiss-listed Tecan.
European Assets Trust declared an interim dividend of 3.51 pence per share, up 17% from 3.00p a year before. Looking ahead, the trust expects to pay a total dividend for 2020 of 7.02p, a 17% rise from 5.99p.
"Quality assets have led the rebound, but towards the end of the second quarter market leadership transitioned to value, perhaps indicating optimism towards a more sustained economic recovery. This of course remains to be seen but risks remain high. Firstly, the virus has not been entirely contained and a vaccine has not yet been approved," said Sam Cosh, lead investment manager at BMO Investment Business Ltd.
"Even in places where infections had fallen to low levels, such as continental Europe, concerns of a second wave have surfaced while in the US and several emerging markets, the virus is not currently under control. Political tensions also remain high, with US and China's diplomatic relationship challenging whilst the upcoming US elections provides a further level of uncertainty," Cosh added.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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