25 Oct 2017 12:37
London, UK, 25 October 2017
Edison issues review on Seneca Global Income & Growth Trust (SIGT)
Seneca Global Income & Growth Trust (SIGT) has changed its benchmark to a more relevant CPI +6% rather than Libor +3%, aiming to achieve an average annual return of 6% above the rate of UK inflation over the course of a typical investment cycle. There has been no change to the investment process; SIGT seeks to generate long-term growth in capital and income, with low volatility of returns, from a portfolio of multiple asset classes. Anticipating a global economic downturn in 2020, SIGT is gradually reducing its equity exposure. At end-September 2017, its tactical asset allocation (TAA) was 59% to equities and 41% to other asset classes, including more than 25% to specialist assets, which generally yield 5-8%. SIGT aims to grow annual dividends at least in line with UK inflation (as achieved in each of the last four financial years). The trust has outperformed its blended benchmark and the FTSE All-Share index over one, three and five years and since its change of mandate in 2012.
Since adopting a discount control mechanism (DCM) in August 2016, SIGT's shares have traded close to NAV. The current 1.5% premium to cum-income NAV compares to the average 0.7% premium of the last 12 months (range of a 2.9% premium to a 2.1% discount). Over the last three, five and 10 years, SIGT has traded at average discounts of 1.2%, 3.9% and 6.4% respectively. SIGT has a progressive dividend policy, aiming to increase annual dividends above the rate of UK inflation; its prospective yield is 3.5%.
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