1. an increase of the Net Asset Value per share by more than the growth in the FTSE All-Share Index; and,
2. growth in dividends per share by more than the rate of UK inflation.
Although this is a UK income trust, the manager is permitted to invest up to 20% of the portfolio in overseas listed holdings. Around 15% is currently allocated including Swiss Pharma, Roche and US tobacco firms Reynolds and Altria - these three are top 10 holdings and currently account for 12.7% of the portfolio.
Edinburgh is been one of the cornerstones of my income portfolio held in both Sipp drawdown and ISA. I took the opportunity to top up my ISA holding again earlier in the year. Mark Barnett took over as lead manager from end January 2014. He also manages Invesco's Income and High Income funds which have combined assets of over £20bn - must be a busy chap!
It has this week published results for the half year to 30th Sept 2014 (link via investegate).
The Company's share price, including reinvested dividends, rose by 4.6% during the past 6 month period, compared to a rise of just 1.2% (total return) by the FTSE All-Share Index.
The trust yields 3.7% based on the current share price of 640p.
Charges & Borrowing
Following the departure of Neil Woodford, the independent Board of Directors renegotiated charges at the start of this year. The performance fee has disappeared and the annual charges are reduced from 0.6% to 0.55%. As a result, ongoing charges for the half year are just £3.7m compared to a whopping £15.5m at the same point last year - a saving of nearly £12m!
Shareholders are also set to benefit from the significant savings in borrowing costs as the £100m 11.5% debenture has now been redeemed and replaced with a lower interest revolving facility from Bank of New York Mellon. The interest saving so far is £2.5m and the full year savings should be around £7.5m.
These are significant savings which should translate to improvements in performance and, importantly, a better return for shareholders!
More on this following the full year results, but so far, happy with progress made under the stewardship of the new manager.