Edinburgh Investment posts NAV growth but return lags benchmark
Edinburgh Investment Trust PLC on Thursday upped its dividend as it said its net asset value return lagged its benchmark index in its latest financial year.
The firm, which invests primarily in large-cap UK securities, reported a NAV total return of 7.2% for the financial year ended March 31, while its benchmark, the FTSE All-Share Index, returned 21.5% over the same period.
NAV with debt at fair value grew 3.5% to 846.04 pence per share at March 31, from 817.16p a year prior.
Edinburgh Investment attributed its underperformance to three factors, namely, ‘share price weakness in holdings perceived to be losers from the Artificial Intelligence revolution, some operational underperformance in a small number of holdings, and being underweight in certain companies with a more pronounced ’value’ orientation.’
The company proposed a final dividend of 8.40p, up 12% from 7.50p. This brings its total dividend for the financial year to 32.00p, up 11% from 28.80p.
Edinburgh Investment discount to NAV tightened slightly in the financial year, ending the period at 8.6% compared to 9.4% a year prior.
Looking ahead, Chair Elisabeth Stheeman said: ‘There is well-founded optimism that the company’s diversified portfolio of stocks will drive attractive returns in the years ahead.’
Shares in the investment trust rose 0.2% to 794.34 pence on Thursday morning in London.
Portfolio Manager Imran Sattar commented: ‘Over the last year the portfolio had a bias to quality growth stocks. There was, however, a notable derating in a number of portfolio holdings which the market has, we believe erroneously, characterised as ’Artificial Intelligence losers’. Alongside this, a few holdings underperformed operationally and being underweight in larger value-oriented benchmark companies was a further drag.
‘We continue to identify many opportunities to invest in high quality businesses in the UK at attractive valuations. We remain focused on bottom-up stock selection and constructing a diversified portfolio to deliver attractive returns over the long term.’
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