LONDON (Alliance News) - Aberdeen Latin American Income Fund Ltd on Wednesday said it will rebase its annual dividend in the current financial year due to the challenging backdrop in Latin America and weak currencies in the region.
The investment company, which has maintained the current dividend of 4.25 pence since launch in July 2010, said that maintaining dividends at that level was unlikely in the short to medium term. The company will therefore set its annual dividend at 3.50p per share for the financial year which began on September 1.
The investment company said that seeking to maintain a high level of dividends was "inhibiting" its investment manager from "conviction investing which is detrimental to achieving future capital growth and, accordingly, to the total return to shareholders".
The investment company said it was "disappointed" with its performance in its last financial year, during which Latin America and other emerging markets had a tough time.
The investment company, which aims to generate a total return, with an above average yield, by investing in Latin American securities, said it produced a negative net asset value total return of 36.8% in the year to August 31. On a total return basis the ordinary shares fell by 32.3% to 52.5 pence in that time.
The total return of its benchmark was negative 32.2%. The company measures itself against a composite benchmark index weighted as to 60% MSCI EM Latin America 10/40 Index and 40% JP Morgan GBI-EM Global Diversified (Latin America Carve Out) both in sterling terms.
Ordinary shares in the company were up 2.3% at 49.59p on Wednesday late morning.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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