They have recently issued results for the full year to 31st January 2016( link via Investegate).
The figures for the year do not make for good reading - NAV per share on a total return basis has fallen by -11.5% (2015 +11.1%) - underperforming against its benchmark the FTSE all-share index by 6.9% over the year. The trust has however outperformed its benchmark in 5 of the past 6 years.
Underlying income per share saw a modest 1.7% increase to 12.1p (11.9p 2015).
The Board is recommending a final dividend of 3.675p, which will make for a total of 11.4p for the full year (2015 - 11.25p) - an increase of 1.3%. As with last year, the uplift is a little disappointing and just about keeping pace with inflation. Dividend growth over the past 5 yrs is one of the weakest in the sector at an average of just 1.1% p.a. - maybe the trust needs a new name!
I am pleased to see dividend reserves have again increased to £23.9m (2015 £22.6m) and now represents 141% of dividends paid out over the past 12 months.
Portfolio turnover is again modest at just 0.05% (these costs for the average fund are over 1%). Ongoing charges for the trust have increased to 0.74% (2015 0.69%) mainly due to the reduction in net assets but still around the average for the UK income sector.
At the current share price of 213p, the trust yields a handy 5.3% but share price appreciation has been below par for the past couple of years. Over the past 12 months, the share price has lost its premium and currently trades at a significant discount to net assets.
In March it was reported that insurer Aviva has been selling off a number of its investment trust holdings. It is among the top five shareholders on a dozen investment trusts, mostly those focused on UK and global shares, private equity and property. This included the sale of ~£2.5m held in DIG in February which has increased the discount on the share price from ~7% to over 10%.
|3 yr chart DIG -v- Vanguard UK Equity Income Fund|
(click to enlarge)
One of my Vanguard index funds I use as a benchmark to evaluate my collective investments is their UK Equity Income Fund which I updated last month. As can be seen from the chart, the Dunedin trust does not compare too well over the past 18 months or so.
Last year, I sold the Dunedin holding in my SIPP. I will retain my ISA holding for the time being for the income but without any real enthusiasm. This seems to offer yet another example of lower cost passive index funds outperforming the managed investment trust. My strategy transition towards lower cost index funds and ETFs over the past year or so is looking increasingly a good move.
As ever, please DYOR.