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The Company’s net asset value decreased 0.8% in total return terms during the month. This compares with the 0.4% increase in the FTSE All Share 5% Capped Index over the same period.
New positions were initiated in Legal & General and Intermediate Capital Group. Legal & General provides savings, risk and investment management services through bank and building society relationships, independent financial advisers and directly to customers. As one of the market leaders Legal & General also enjoys economies of scale allowing it to generate better returns than its smaller competitors. The shares offer an attractive dividend yield with some scope for growth.
Intermediate Capital Group deploys capital on behalf of investors through private debt, mezzanine, credit and minority equity funds specialising in mid-market transactions. The Company also invests its own capital alongside third party funds. The company is evolving from a lender to a fund manager. We expect this relatively new business model will ultimately lead to higher growth, improved profitability and better visibility of returns.
The positions in National Grid and Severn Trent, both regulated utilities, were reduced after a period of exceptional performance. The utilities sector is vulnerable to any increase in bond yields from the current record low levels. There has been a further reduction in assets allocated to the Higher Yield portfolio in light of the low level of yields available on corporate bonds, particularly on higher quality, investment grade corporate bonds. At the end of the month, the Higher Yield portfolio accounted for 4.4% of the Company’s total assets.
As at 31 October 2016
The Company is an investment trust and therefore its shares are not subject to the Financial Conduct Authority's rules relating to the restrictions on the retail distribution of unregulated collective investment schemes and close substitutes which came into effect on 1 January 2014. The Company conducts its affairs so that its shares can be recommended by Financial Advisers to ordinary retail investors in accordance with the Financial Conduct Authority's rules relating to non-mainstream investment products and intends to continue to do so.
Share price (A Shares)
Share price (B Shares)
Share price (Units)
Past performance is not a guide to future results. The value of investments can go down as well as up.
The shares of the Company are listed on the London Stock Exchange.
Information in this section of the website concerning the Company is
directed solely at persons who are located in the UK. Nothing on this
website is, or is intended to be, an offer, advice, or an invitation, to
buy or sell any investments. Potential investors must read our full terms and conditions
before proceeding further with any investment product referred to on
this website. The information on this website may not be suitable for
everyone, and retail investors unsure whether an investment product
referenced on this website will meet their individual needs should seek
advice before proceeding further with such product.
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