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LONDON (Alliance News) - Personal Assets Trust PLC said Monday its full year net asset value per share had a "not unexpected modest fall", underperforming against its comparative index.
Personal Assets Trust net asset value per share for the year ended April 30 fell 2.6% to 38,821 pence from 39,870p, compared to the FTSE All-Share Index increasing by 4.2%.
The FTSE 250-listed company's total dividend was GBP5.60 per share, the same as the year before.
Shares in Personal Assets Trust were down 0.1% on Monday at 39,810.50 pence each.
Personal Assets Trust said the reason for its net asset value per share dip was that until it was "more fully invested its returns were likely to continue to "differ markedly" from the stock market.
It also said the strengthening of sterling had a negative effect on performance.
The company said the "market seemed to believe that investing stocks had become a one-way bet". It said "complacency was high, valuations were all but ignored and interests rates had remained so low for long that markets seemed to have forgotten that risk-taking had a downside."
Looking ahead, Personal Assets Trust said it is "optimistic" about investment opportunities to be had in "due course". Recent share price falls "offer the prospect for better value ahead", according the company.
"We reduced longstanding holdings in British American Tobacco, Philip Morris and Microsoft on valuation grounds following periods of strong performance and before their recent price falls. We sold two longstanding US holdings in their entirety. Becton Dickinson we first acquired in 2010, attracted by its clean balance sheet, lowly valuation, sensible attitude towards capital allocation and business model of selling repetitively consumable medical devices," said Investment Adviser Sebastian Lyon.
"More recently, however, Becton's management has turned to acquiring growth and scale through acquisitions, putting the balance sheet at risk. We prefer companies we hold to create goodwill rather than expensively acquire it, so we took our sizeable profit. We also sold Dr Pepper Snapple following the announcement of a merger with Keurig Green Mountain. This led to a material rise in the share price, making the retention of the shares in the combined entity, with a highly leveraged balance sheet, no longer attractive," Lyon added.