Last checked at 17 Jan 2012 15:10
Interim Management Statement - Blue Planet Financials Growth & Income Investment Trusts (Nos 1 - 10) plc
Quarter Ended the 31st December 2011
Fund Manager's Review
In December our NAV fell 1.7% to 52.2 per share. The benchmark index returned 3.5%. The Fund underperformed the benchmark due to a reversal in equity markets halfway through the month. The share price fell 7.1% to 26p. Over the last three months the NAV has fallen 5.4% while the benchmark has risen 6%.
The ubiquitous and worsening debt crisis in the developed world set 2011 to be one of the most profitable years on record for capital preserving assets such as UK and US government securities. UK and US government bonds posted returns of 16.7% and 9.9% respectively. Inflationary pressures which began to fade in 2011 should ease further amid weakening global growth prospects, placing a floor under such "safe haven" securities. In turn, a good portion of our cash is being put to use in similar income securities, which should help the Fund navigate the upcoming year's erratic economic signals.
After being in red territory for most of the month, financial markets posted a rally which more than pared earlier losses. A credit salvo of nearly EUR500 billion provided by the European Central Bank (ECB) to over 500 banks averted an imminent funding crisis; even after stern declaration by the ECB that it would not engage in "quantitative easing". This move was enacted with the primary aim to avoid an imminent banking collapse via provision of a gargantuan and unprecedented liquidity injection. A second round objective was to support PIIGS nation debt using banks as a conduit to lower funding costs in economies like Italy or Spain, which in turn immediately proved to be profit accretive for banks.
With the year coming to a close, tougher austerity could choke Europe into a mild recession next year, as Asian economies also struggle to convince markets that they will remain relatively immune to weakening conditions in the whimpering 27 nation economy. Amid the gloom, the US has been a beacon of hope as better than expected employment figures, if sustained, look to boost corporate profits. With more than fifty percent of Americans now having a mortgage worth more than their house, time will tell if the labour market improvements hold.
Global risk aversion may remain elevated in 2012 as sovereign and banking solvency risks remain high on the list of concerns. As political agendas in the US and France play a larger role in 2012, with the immediate interests of the banking system prevailing, the longer run interests of the economy will play second fiddle. Amidst all this noise, consumers could find it increasingly difficult to regain confidence in the economy, deferring risk taking and thus further delaying a solid private sector recovery.
Cumulative Performance (%) as of 31st December 2011
Current 1 month 3 months 6 months 1 year 3 years 5 years (p) NAV 52.20 -1.7% -5.4% -25.9% -35.7% -43.4% -84.0% Share Price - 26.00 -7.1% -7.1% -45.3% -55.2% -38.7% -87.3% Total Return Benchmark - 58.66 3.5% 6.0% -16.2% -17.7% 16.5% -26.8% Total Return Discount / + -50.2 -47.3 -49.3 -32.5 -28.6 -51.7 -34.1 Premium (%)
Discrete Annual Performance (%) as of 31st December 2011
Share price Benchmark 4Q/10 - 4Q/11 -55.2% -17.7% 4Q/09 - 4Q/10 -25.6% 8.9% 4Q/08 - 4Q/09 84.0% 29.9% 4Q/07 - 4Q/08 -76.7% -36.8% 4Q/06 - 4Q/07 -11.0% -0.6%
Source: Blue Planet, share price bid to bid, net income reinvested
Portfolio Information as of 31st December 2011
Security Security Country Valuation Weighting Type Name £ % 8,170 Equity iShares Markit Ireland 894,452 5.5 iBoxx ‚£CB XF 66,390 Equity Blackrock Ireland 715,000 4.4 Gilttrak Fund 6,110 Equity iShare JPM $ Emg Ireland 426,661 2.6 Mkt Bond Fund 12,200 Equity Lyxor ETF XBear Italy 422,723 2.6 FTSE MIB 52,540 Equity iShares FTSE UK Ireland 354,382 2.2 Dividend Plus 7,360 Equity Lyxor ETF XBear France 264,707 1.6 CAC 40 990,500 Equity Blue Planet UK 247,625 1.5 Worldwide Financials 9,310 Equity iShare S&P U.S. US 213,405 1.3 Pref Stk Indx 1,570 Equity iShares Markit Ireland 186,595 1.2 iBoxx ‚£CR BD 439,830 Equity Other Other 104,175 0.8 3,829,725 23.7 710,000 Bond ASIF III Jersey Jersey 704,782 4.4 5.375% 10/16 500,000 Bond Close Bros Grp UK 499,400 3.1 6.5% 02/17 460,000 Bond NAB 3.625% 11/17 Australia 458,464 2.8 356,470 Bond UK TSY 4.25% 12/ UK 438,030 2.7 40 250,000 Bond Swiss Re Co Switzerland 193,818 1.2 6.3024% 03/49 2,294,494 14.2 Security Cash Denomination Valuation Weighting Type Security Name £ % Liquid Near Cash Assets GBP 800,000 5.0 Assets Liquid Cash GBP 9,203,681 57.1 Assets Liquid Cash Other 0 0.0 Assets Currency 10,003,681 62.1 16,127,900 100.0
For more information, please visit www.blueplanet.eu
You can also contact the Company on 0845 527 7588 or by emailing info@blueplanet.eu