Edinburgh Investment Trust (EDIN) increases net asset value
By Jenni Reid
11:05, 22 November 2021
Edinburgh Investment Trust (EDIN) said on Monday that it grew its net asset value (NAV) in the first half of the year amid market challenges.
The 132-year-old firm reported 9.8% growth in NAV in the six months to 30 September, which it noted was above the 8% rise in the FTSE All-Share Index.
That was “despite a combination of tempering growth rates here and abroad, ongoing supply bottlenecks and rising energy prices,” said manager James de Uphaugh.
Its share price discount to NAV widened from 4.5% to 9.3%, usually an indication that investors feel the securities in a fund are undervalued.
Edinburgh Investment Trust chair Glen Suarez said growth was due to “the foundations of a strong long-term track record beginning to take shape”.
“While growth in NAV has been encouraging, over the last six months the discount has widened,” he said.
“We are very pleased to have secured much more efficiently priced debt, and we are optimistic that the portfolio’s long-term returns should be enhanced,” Suarez added.
It will pay a first interim dividend of 6p a share on 26 November, in line with last year’s payout.
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de Uphaugh said of the outlook: “There are several compelling reasons to think that the UK equity market can generate further attractive returns on a medium-term view.
“There is no question pricing pressures are more prevalent now than in other inflationary spikes over the last decade, but we take reassurance from the fact that the portfolio is dominated by companies that have pricing power and strategic strength that we believe will afford greater protection against cost inflation.
“Overall, the UK is widely regarded as a great place to do business with strong companies. The return of overseas/marginal investors, boosted by the growing appetite for takeovers from foreign companies or private equity funds, is a positive endorsement of the UK market.
“Furthermore, the valuation discounts relative to other equity markets highlight the opportunity in UK equities. We believe the market is taking a short-term view of the prospects for many businesses in the UK, which provides opportunities for investors willing to look through the current macroeconomic headwinds,” de Uphaugh concluded.
EDIN stock was up 0.2% to 628.26 as of 11:00 GMT.