NCYF weathered 2022 well. The fund delivered a broadly flat NAV TR whilst increasing its portfolio yield by 136bps to 9.54%. The 2023 outlook mixed with prospects for near term volatility followed by recovery in H2/Q4 as the rates-cycle ends. Given portfolios increased yield, we expect dividend cover to improve in FY23 (0.93x covered FY22). Reflecting the funds revenue reserves, our call is for continued modest dividend growth. At a 6.2% premium to NAV, NCYF is trading close to its 12m average of 6%. Given its yield and track record we expect its premium to be maintained as the manager navigates through the challenges offered by 2023.
