(Alliance News) - AVI Global Trust PLC on Wednesday reported a strong outperformance in the first half, repositioning its portfolio to benefit from global economies reopening from Covid restrictions, and believes further growth is in sight.
At the end of March, the trust - which seeks value through investing in companies whose shares stand at a discount to estimated underlying net asset value - recorded a net asset value per share of 1,038.07 pence, up sharply from 837.13p six months earlier.
The trust declared an interim dividend of 6.00p, unchanged on the year before.
AVI's NAV total return in the first half was 26.8%, higher compared to its benchmark - the MSCI AC World ex-USA Total Return Index - gaining 13.5%.
"This result made AGT one of the top performers in its peer group of global investment trusts," Chair Susan Noble said.
She continued: "Some of the strongest contributions over the period came from companies - such as Aker ASA, Jardine Strategic Holdings Ltd and EXOR NV - that had been hardest hit by the Covid-19 pandemic, and subsequently rallied in November 2020, following the announcement of the Pfizer-BioNTech vaccine trial results. The manager increased exposure to these companies, and initiated positions in others, during 2020 when their valuations appeared particularly compelling."
The trust's investment manager, Joe Bauernfreund from Asset Value Investors Ltd, noted market performance has "moved away from high-quality companies with clear secular growth prospects, and towards more cyclical and economically sensitive stocks which will benefit from a resumption of economic activity."
"Since the second half of 2020, we have been adding to AGT's exposure to these cyclical and economically sensitive stocks when their valuations appear compelling. These include companies such as Associated British Foods PLC, the UK conglomerate that owns Primark, those operating in the London office and retail property and leisure markets - Capital & Counties Properties PLC, Secure Income REIT PLC, Shaftesbury PLC - Jardine Cycle & Carriage, and Berkshire Hathaway Inc. These new positions build on the reflation beneficiaries which we already had in the portfolio such as Aker, Exor and many of the small-cap names which we hold in Japan, which provided a balance to the portfolio for much of 2020 when the portfolio had been tilted towards higher-growth names," Bauernfreund added.
Looking ahead, the investment manager believes the trust's prospects for growth are "promising".
Shares in AVI Global Trust were 1.0% higher in London on Wednesday morning at 984.52 pence each.
By Paul McGowan; paulmcgowan@alliancenews.com;
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AVI Global Trust (AGT)