Thursday, 27 February 2014

Law Debenture - 2013 Final Results

The objective for this investment trust is to achieve long term capital growth in real terms and steadily increasing income. The aim is to achieve a higher rate of total return than the FTSE All-Share Index through investing in a portfolio diversified both geographically and by industry.

Although this is catagorized as a global trust, 77% of the portfolio are UK listed equities. The rationale for this is that most of these companies derive a significant proportion of their profits from overseas operations. The remainder of the portfolio are comprised of Europe (7%), N. America (8%) and Asia/Japan (mainly via funds) (8%).

The trust has today issued results for the full year to 31st December 2013 (link via Investegate). Net Assets total return for the year was 28.6% compared to 20.8% for its benchmark FTSE All Share Index. Revenues increased 7.5% to 16.3p per share and the proposed full year dividend will be increased 5.3% to 15p (2012 14.25p). The trust has either held or increased the dividend in each of the past 40 years.

3 yr comparison -v- FTSE All Share
(courtesy of Digital Look - click to enlarge)

In addition to the investment trust, it also has a fiduciary services business which contributes to overall profits but the value of this business is not accounted for in the trusts NAV.  Earning from this business were 7p per share - if a fairly conservative p/e of 10 is applied, this would value the fiduciary business at 70p per share.

The costs remain low with ongoing charges at just 0.45% and with the added benefit for investors of no performance fee. Also portfolio turnover rate is low at around 10%.

I’m very happy to continue holding  LWDB in my SIPP drawdown portfolio and as I said last year .. " it may well become another of my long term buy and hold core holdings".

As ever, please DYOR.

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