(Alliance News) - Schroder Income Growth Fund PLC on Thursday said it underperformed against its comparative index for its most recently ended financial year due to a weaker performance from its portfolio holdings.
For the year to the end of August, Schroder Income Growth's net asset value negative return was 1.9%, compared to a positive return of 0.4% from the FTSE All-Share Index.
Schroder noted its peer group median fund made a negative return of 2.2% during the period.
Net asset value per share as at August 31 was 297.66 pence per share, down 5.7% from 315.54p the same date the year before.
This was mainly due to a weaker performance from its portfolio, which Schroder Income mainly attributed to a lack of exposure to FTSE 100 beverage firm Diageo, which saw substantial investor interest in the period due to its defensive growth characteristics.
There was also a weak performance from the industrials section of the portfolio, in which security services firm G4S PLC struggled during the period.
In addition, ITV PLC's share price was weakened by investor concerns over structural and cyclical issues, and William Hill PLC was affected by profit headwinds brought on by tighter UK regulation and concerns over its expansion in the US.
Schroder Income Growth declared a total dividend of 12.4 pence per share, up 5.1% from 11.8p the year before.
"The global nature of UK equities has resulted in international developments setting the tone for the market. Recent global economic data increasingly points to deteriorating fundamentals. This has caused central banks to again loosen monetary policy in order to try and keep economies stable," said Schroder Investment Management Ltd.
"In addition to the global trends influencing UK equities, Brexit continues to dominate sentiment, creating considerable uncertainty for the UK economy and political environment. As a result, we are presented with a compelling valuation opportunity in some good quality, soundly-financed domestic companies taking a long-term perspective," the investment manager added.
Shares in Schroder Income Growth remained flat at 284.00 pence on Thursday in London.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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