28 Jun 2017 08:53
London, UK, 28 June 2017
Edison issues review on Seneca Global Income & Growth Trust (SIGT)
Seneca Global Income & Growth Trust (SIGT) has proposed changing its benchmark to a more relevant CPI +6% versus the current Libor +3%; it aims to generate income and long-term capital growth across multiple asset classes with low volatility. SIGT also aims to grow annual dividends at least in line with UK inflation. It currently has a long-term strategic allocation to equities (60%, split 35% and 25% between UK and overseas), fixed income (15%) and specialist assets (25%, generally yielding 5-8%). SIGT has outperformed its current benchmark and the FTSE All-Share index over three and five years and since its change of mandate in 2012, with lower volatility than the UK equity market. Annual dividends have increased above the level of UK inflation for the last four years and SIGT has regularly added to reserves. The board has been actively utilising the discount control mechanism that was initiated in 2016, with the aim that SIGT's shares trade close to its NAV.
SIGT's shares are currently trading at a 1.4% premium to cum-income NAV; this is modestly higher than the 0.3% average premium of the last 12 months. The board has been actively utilising the discount control mechanism (DCM), repurchasing shares when they are trading at a small discount and issuing shares when they are trading on a small premium. The current premium compares to average discounts of the last three, five and 10 years of 1.9%, 4.9% and 6.7%, respectively.
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