The wildfires and storms which have hit California over the past year and a short-selling attack on a finance firm have been blamed for contributing to a disappointing year for investors in an Aberdeen Standard Investments trust.
The Aberdeen Diversified Income and Growth trust, which holds investments exposed to insurers, saw its net asset value edge up by just 1.1% over the year ended 30 September 2019 with the company’s share price falling by 9%.
Chairman James Long admitted it had been a “frustrating period for performance” for the trust which targets a total portfolio return matching Libor bank interest rates plus 5.5% a year over rolling five-year periods.
“The portfolio has delivered a high level of income in line with the board’s expectations but the capital value has been impacted by our exposure to insurance-linked securities and to a lesser extent the recent short selling attack on Burford Capital,” he said.
However Long said the investment manager had made good progress in changing the asset mix in the portfolio, in particular increasing the proportion of unlisted investments which he said included opportunities not otherwise open to many investors.
Long also highlighted valuation uplifts seen for a number of the fund’s investments including aircraft leasing firm Truenoord and the Harbourvest and Mesirow private equity funds.
“The board remains supportive of the investment manager’s long-term strategy of developing a diversified portfolio of assets, each with differing return drivers and risk characteristics, offering a sound proposition for investors against an often volatile global equities backdrop,” said Long.
“The board recognises that carefully building such a diverse portfolio of assets takes time but should see fruitful results in the medium and longer term, rather than the short term, as many of the unlisted investments mature and start to return cash.”
Total dividends for the year are 5.36p a share, 2.3% higher than in the previous year.