(Alliance News) - Seneca Global Income & Growth Trust PLC said Wednesday it underperformed against its benchmark for the first half of its financial year, due to the continued "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 1.6%, compared to its CPI+6 annualised benchmark, which made a positive return of 3.7%.
The trust's net asset value per share on October 31 was 172.89 pence, up 6.2% from 162.87p a year earlier but 3.5% lower from 179.08p as the end of April.
Seneca Global Income's share price at the end of October was 173.50 pence, reflecting a 0.4% premium to net asset value.
Shares in the investment trust were untraded on the day Wednesday, last quoted at 174.40 pence in London, reflecting an improvement since the period-end.
The Seneca fund said that during the period, the UK mid-cap companies in its portfolio performed well as fears of a no-deal Brexit faded. However the trust's portfolio suffered from a lack of exposure to US equities and sovereign debt.
In addition, the major detractors during the period were construction company Kier Group PLC and Woodford Patient Capital Trust PLC. Kier issued a profit warning under its new chief executive, while the Woodford investment trust was caught up in the meltdown of stock-picker Neil Woodford's open-ended funds and investment management business.
Seneca paid two interim dividends of 1.68 pence per share for the period, up 2.4% from 1.64p year-on-year.
"There are signs that valuations of some equities now reflect much of the risk and prevailing uncertainty. The UK has of course been dominated by Brexit uncertainty and with an election now looming, it is difficult (and dangerous) to predict the outcome of either. Elsewhere, US-China trade discussions rumble on, and future US monetary policy remains uncertain," said Chair Richard Ramsay.
"The diverse range of assets comprising the company's portfolio should provide reasonable returns over time, as well as real risk reduction, which seems particularly relevant in the current environment," Ramsay added.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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