LONDON (Alliance News) - Seneca Global Income & Growth Trust PLC said on Tuesday it underperformed its benchmark for the first half of its financial year due to the "volatility of underlying financial markets".
For the six months to the end of October 31, Seneca Global Income reported a net asset value negative return of 3.6%, compared to its benchmark, which provided a total return of positive 4.3% for the period. The share price total return, meanwhile, was negative 6.0%.
Net asset value per share as at October 31 was 162.87 pence, down from 176.22p on the same date a year before, and from 172.25p at the end of April.
Shares in the investment trust were down 0.2% at 162.42 pence on Tuesday.
For the six month period, Seneca Global Income sunk to a pretax loss of GBP3.0 million from a profit of GBP4.2 million the year before, mainly due to a loss on investments at GBP4.6 million, swung from a gain of GBP3.0 million.
Seneca said the main detractor to portfolio performance was its large exposure to UK mid-caps, which underperformed large-caps over the period. In the UK as a whole, the market was negative, with only specialist assets, in particular infrastructure, being lucrative due to takeover activity.
Seneca Global Income paid two interim dividends of 1.64 pence per share for the period, up from 1.58p year-on-year.
"About a year ago, the manager began a gradual process of reducing the company's equity exposure. This caution has proved prescient and helped protect SIGT from the worst of equity markets', particularly recent, weakness. One of the strengths of the company's multi-asset value investment policy is that it provides transparent and straight-forward exposure to a range of assets, which together provide lower volatility returns than equity only portfolios," said Chairman Richard Ramsay.
Seneca Global Income noted that since the end of the half-year, AJ Bell PLC announced its planned initial public offering in London. The investment trust carries its holding in AJ Bell at GBP0.865 per share, but the price range for the IPO announced by AJ Bell was GBP1.54 to GBP1.66, suggesting a likely uplift.
AJ Bell said it will announce its final pricing on Friday for a start to trading on Wednesday next week.