LONDON (Alliance News) - The European Investment Trust PLC on Thursday said its last financial year represented a "more challenging" period for investing in European equities.
The trust noted "with much weaker markets in the final six months of our year, together with a currency headwind from a weaker euro".
The trust's net asset value per share decreased by 7.3% to 742.20 pence in the year ended September 30. After taking account of dividends paid in the year of 15.0p, the NAV total return was negative 5.5%. That compared with the total return of negative 1.8% from the FTSE All-World Europe excluding UK Index, adjusted to sterling.
During the year, the trust's share price decreased by 10.1% to 673.00p. The discount at which the shares traded to NAV per share widened to 9.3% from 6.5%. The share price total return, taking account of the 15.0p dividend paid in the year, was negative 8.3%.
"For much of the year under review, European equity markets favoured companies which have the lowest perceived earnings risk. The outperformance of these stocks was fuelled not by any material changes to their profits outlook, but by their valuations returning to historic relative peaks; this constituted a headwind for our relative performance," Chairman Douglas McDougall said in a statement.
"However, the investment manager believes that a significant number of the stocks within the portfolio remain undervalued and should rebound. We have therefore maintained or added to our positions in the majority of our underperforming stocks and are close to being fully invested," McDougall said.
Edinburgh Partners is the trust's investment manager, and has been since February 2010.
Shares in the trust were down 0.5% at 714.00p on Thursday morning.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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