It invests in high-yield fixed-interest securities and has produced positive NAV total returns and increased dividends in each of the past six years. The trust has a widely diversified portfolio, including some high-yielding convertibles and equities, with useful exposure to floating-rate notes to guard against inflation.
They have today issued full year results to 30th June 2016(link via Investegate)
Building on previous years modest 1.0% uplift, the Company's net asset value has again seen a modest increase of 1.0% although the share price return has increased by 4.7%. Investment returns were muted due to a slowdown in China’s growth combined with Eurozone concerns around Brexit.
Dividends have been increased to 4.36p (2015 4.31p) giving a yield of around 7.3% based on the current share price of 60p. The dividend is more than covered by earnings of 4.50p per share however revenue reserves have reduced to 98.3% (last yr 113.5%) - the equivalent of 12 months current dividends.
As in previous years, the trust continues to trade at a premium to net assets and the management have place new shares raising £3.4m.
|Compare NCYF with City Merchants (click to enlarge)|
Ongoing charges for the year have increased significantly from 0.95% to 1.25% which leaves me to ponder whether I wish to continue holding. With a great deal of turbulence hitting the equity markets in recent weeks following the Brexit decision, its reassuring to have the steadying effect of the fixed interest constituents in my portfolio. However, the charges are a full 1.0% more than my Lifestrategy fund.
If sterling starts to recover, making the LS option more attractive then I may well cash in my chips with this one.
As ever, slow and steady steps…