NCYF had been a part of my SIPP portfolio for a number of years however, it was one of several investment trusts to be sold as part of my drawdown release. One reason for selecting this for a sale was that earlier this year, I added the trust to my ISA portfolio.
They have today issued full year results to 30th June 2015 (link via Investegate)
Building on the previous years 3.1% uplift, the Company's net asset value has again seen a modest adjusted increase of 1.0% although the share price return has fallen back due to a reduction in the premium to NAV - this is always a possibility with investment trusts bought at a premium to their underlying asset value. Investment returns were muted due to Eurozone concerns and the strength of the US dollar.
Dividends have been increased to 4.31p for the full year (paid quarterly) giving a yield of around 7.3% based on the current share price of 59p. The dividend is more than covered by earnings of 4.51p per share and revenue reserves are 113.5% - the equivalent of 13 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 £50m. This has helped to reduce the percentage of ongoing charges for the year.
The management fee of 0.8% p.a. was reduced to 0.7% per annum on total assets in excess of £200m with effect from 1st January 2015. Ongoing charges for the year have reduced to 0.95%.
With a great deal of turbulence hitting the equity markets in recent weeks, its reassuring to have the steadying effect of the fixed interest constituents in my portfolio.
As ever, slow and steady steps…
I also hold NCYF in my ISA and now the results are out and seem OK I will probably buy some for my other half's ISA too.
Cheers for the review - always helpful.
I'm one of your twitter followers BTW.
I agree, the results appear broadly OK. The share price has retreated ~7% since I purchased in my ISA at the start of this year so with the current yield, I may just about break even! I guess most holders don't expect much capital appreciation but are mainly interested in the income.
Thanks for dropping by with a comment and hope you manage to buy at a good price if you decide to top up!
Thanks for sharing - its not an Investment Trust I was aware of before, but from first read of the review of year end results its one I will investigate and then if it gets down to NAV or below, provided my own research agrees with you (I suspect yes :)), then I may tuck in - potential for the watch list!
As you say, it would be good to purchase at a discount however for the past 4 yrs at least, I think it has mainly traded at a premium to NAV - although this has narrowed quite a lot this past year.
Another one to add to the watchlist! Good luck with it.
Its definitely on the watchlist and I looked at the history, so take your point :) Maybe I am just being overly optimistic that I only want to buy IT's on discount!
I have a good slug of NCYF - I bought as it is an Investors Chronicle top 100 fund.ReplyDelete
The high yield makes me nervous and the communication to shareholders is not great (compared to Henderson Diversified Income HDIV which I have a lot of time for esp. John Patullo sp?)
Still John Baron seems to like it and he is the investment trust guru so I am continuing to hold. I'm down about 5% but with 7% yield this will soon make up. The latest divi is up 3.2% so watch this space.
Mmmm the price is gently declining and the yield is going up. I should be happy & buy more but I am just slightly worried. I'm holding and watching with interest.
Any other views
I note there have been quite a lot of new shares placed this year which has bumped up the asset value but which may have caused some weakening of the share price - just conjecture of course.
Good to see John Baron is keeping the faith - holds in 3 of his 4 seasonal portfolios. Earlier in the year he sold out of Murray Income, Murray International and Temple Bar - all of which I hold!
My holding of NCYF now accounts for around 2% of my portfolio so I am not overly concerned with the price weakness so long as the income keeps going.
Thanks for dropping by.
Yes the share price dropped with the share placement as the premium decreased.ReplyDelete
A greater availability of shares I presume in an income hungry investing environment.
I figure that the placement is good as ultimately expenses will go down and liquidity will increase.
I have about 2.5% in my portfolio as an income diversifier.
Life as an investor is a lot of (hopefully) little worries and niggles. This is one of them.
John selling Murray Income, Murray International and Temple Bar was v good timing (I bought all 3 and I am £1000 down in total!).
Your view of not thinking about price weakness and focusing on the income is correct I think.
Many thanks for your thoughtful reply.