Edison review on Seneca Global Income & Growth

London, UK, 28 May 2020

Edison issues review on Seneca Global Income & Growth Trust (SIGT)

Seneca Global Income & Growth Trust (SIGT) is managed by a four-strong team at Seneca Investment Managers, seeking undervalued securities across multiple asset classes in order to diversify the trust's risk and return drivers. Its UK equity portfolio was particularly negatively affected by the coronavirus-led market sell-off in March, given its focus on domestic, mid-cap value stocks, which performed relatively poorly. However, these holdings could stand SIGT in good stead during an economic recovery. The trust's board has committed to continue paying quarterly dividends, using reserves where necessary if income falls short, which seems likely given the number of dividend cuts announced by corporates in response to the global pandemic.

SIGT actively employs its discount control mechanism (DCM), which was introduced in August 2016, aiming to ensure that its shares trade close to NAV. The trust is currently trading at a 1.1% discount to cum-income NAV, compared with average premiums of 0.4%, 0.7% and 0.2% over the last one, three and five years, respectively. Historically, SIGT has had a progressive dividend policy and currently offers a 5.0% yield. It has grown its annual dividend at a rate higher than UK CPI inflation for the last seven consecutive financial years.

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