Athelney Tst. Regulatory News (ATY)

Athelney Trust PLC

Legal Entity Identifier:

213800ON67TJC7F4DL05

The unaudited net asset value of Athelney Trust was 186.2p at 31 October 2023.

Fund Manager's comment for October 2023

In spite of the fact that the US economy expanded faster than expected in the third quarter, the equity risk premium increased materially in October. This was driven by fears that the Israel-Gaza war could involve more countries in the Middle East conflict and also disrupt the supply of oil as voluntary cuts by Saudi Arabia and Russia are still in place until the end of the year.

Furthermore, this week's confidence surveys confirmed a soft growth environment for Europe's major economies with the manufacturing PMI in contraction territory for the 16th straight month and the new orders component suggesting continued manufacturing weakness going forward. The news in the United Kingdom was only marginally better with the October services PMI easing further in September. This economic weakness and a substantial decline in Eurozone inflation prompted the European Central Bank to hold interest rates at 4%, bringing an end to its streak of 10 consecutive increases in borrowing costs. Whilst UK inflation cooled more than expected last month, June's 7.9% reading remains far higher than the Bank of England's 2% target and UK business activity contracted in October for the third consecutive month.

In a recently published survey by Stifel, it was shown that there are currently 35 investment trusts, investing primarily in shares, with a dividend yield of 4% or higher. Of these, the survey highlights those investment trusts, including Athelney, that have increased their annual dividend payout for at least 20 years in a row. Most funds comprise investments in the large-cap universe as they satisfy requirements for yield. However, there are three UK smaller companies' funds which have made the list this year with Athelney having the highest dividend yield of 4.9 per cent. The BlackRock Smaller Companies trust is on a yield of 3.1 per cent and the Henderson trust on 3.9 per cent with their current higher than normal yields resulting from poor share price performance over the past year.

During the month the NASDAQ was down by 2.78% with the S&P500 faring slightly better, declining by only 2.2%. In fact, markets globally were under pressure with the MSCI declining during the month by 2.97%. After a positive month in September, the FTSE100 was down, declining by 3.76% with the remainder of the market and in particular, the mid-cap companies substantially down. The FTSE 250 declined by 6.54%, with the AIM All-Share Index declining by 6.38%. The Small Cap Index was down by 6.13% and the Fledgling Index performed slightly better, down by 5.24%.

In periods when there is an increase in the equity risk premium, as occurred in October, the share prices of growth companies are affected the most as long dated earnings are discounted. This is the case for Athelney where in spite of the fact that investment income is the highest it has been since 2019, the value of the Athelney portfolio has declined by 6.77% during the month. After allowing for expenses, including a substantial increase in audit fees, the NAV reflected a decline of 7.78%.

There were no changes to the portfolio during the month. Our cash holding at month end was unchanged, comprising 3.2% of the portfolio.

Fact Sheet

An accompanying fact sheet which includes the information above as well as wider details on the portfolio can be found on the Fund's website www.athelneytrust.co.uk under "About" then select "Latest Monthly Fact Sheet".

Background Information

Dr. Emmanuel (Manny) Pohl AM

Manny is Chairman and Chief Investment Officer of E C Pohl & Co ("ECP"), an investment management company and has been a major shareholder in Athelney trust for many years.

E C Pohl & co is licensed by the Australian Financial services (license no.421704).

www.ecpohl.com

www.ecpam.com

Manny Pohl and the ECP group has AUD2.7bn (£1.5 billion) under its management including four listed investment companies, three listed in Australia and one in the UK:

· Flagship Investments (ASX code:FSI)

AUD95m https://flagshipinvestments.com.au

· Barrack St Investments (ASX code: BST)

AUD37m www.barrackst.com

· Global Masters Fund Limited (ASX code: GFL)

AUD33m www.globalmastersfund.com.au

· Athelney Trust plc (LSE code: ATY)

GBP6m www.athelneytrust.co.uk

Athelney Trust plc Investment Policy

 The investment objective of the Trust is to provide shareholders with prospects of long-term capital growth with the risks inherent in small cap investment minimised through a spread of holdings in quality small cap companies that operate in various industries and sectors. The Fund Manager also considers that it is important to maintain a progressive dividend record.

The assets of the Trust are allocated predominantly to companies with either a full listing on the London Stock Exchange or a trading facility on AIM or ISDX. The assets of the Trust have been allocated in two main ways: first, to the shares of those companies which have grown steadily over the years in terms of profits and dividends but, despite this progress, the market rating is favourable when compared to future earnings and dividends; second, to those companies whose shares are standing at a favourable level compared with the value of land, buildings or cash in the balance sheet.

Athelney Trust was founded in 1994. In 1996 it was one of the ten pioneer members of the Alternative Investment Market ("AIM"). In 2008 the shares became fully listed on the main market of the London Stock Exchange. Athelney Trust has a successful progressive dividend growth record and the dividend has grown every year since 2004. According to the Association of Investment Companies (AIC) Athelney Trust is one of only "22 investment companies that have increased their dividend every year between 10 and 20 years - the next generation of dividend heroes" (as at 20/03/2018). See link

https://www.theaic.co.uk/income-finder/dividend-heroes

Website

www.athelneytrust.co.uk