(Alliance News) - Invesco Income Growth Trust PLC said Friday it outperformed its benchmark for its recently ended financial year, despite reporting a negative return.
For the year to the end of March, the investment trust reported a net asset value return with net dividend reinvested of negative 17.3%, compared to the FTSE All-Share Index which gave a negative return of 18.5%.
Net asset value per share as at March 31 was 248.2 pence, down 20% from 311.2p the same date a year before. Invesco Income's share price at the end of March was 217.0 pence, reflecting a discount to net asset value of 13%.
Shares in the trust were up 0.6% at 235.44 pence on Friday in London.
Invesco Income said the UK equity market was volatile in its financial year, due to the outlook for global economic growth and Brexit negotiations and the outcome of the UK general election.
However this was overwhelmed in the final quarter by the Covid-19 pandemic, during which the UK equity market fell by 25%.
With the trust's portfolio, utilities such as Pennon Group PLC, Severn Trent PLC and United Utilities PLC performed well due to the Conservative victory in the election in December, ending the threat of nationalisation by a far-left Labour government. Pennon is up 10% so far in 2020, though Severn Trent is slightly lower and United Utilities is down 3.7%.
However, hospitality firm Whitbread PLC and events and publishing firm Informa PLC suffered as Covid-19 posed serious challenges to their businesses. Whitbread shares are down 43% in the year to date, while Inform is down 47%.
Invesco Income Growth proposed a total dividend of 11.75 pence per share, up 2.6% from 11.45p the year before.
"It has become increasingly apparent that Covid-19 will have a significant and widespread impact on global as well as UK economic growth. The scale and duration of disruption remains subject to great uncertainties. The restrictions put in place since March to limit the spread of Covid-19 will naturally have a large impact on a wide range of economic indicators," said Portfolio Manager Ciaran Mallon.
"As the effects of the virus start to fade, the measures implemented by the government and the Bank of England will, in my view, encourage the stabilisation of economic activity in the second half of 2020 and the resumption of economic growth in 2021," Mallon added.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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