Seneca Global Income & Growth Trust (SIGT) is an actively managed global income fund that follows a multi-asset value approach with a core allocation of 60% to equities, although this could range from 25-85% depending on market valuations. The trust’s NAV total return has outperformed its benchmark of three-month Libor +3% and the FTSE AllShare index over the four years since its investment mandate changed in January 2012. Volatility has been consistently lower than the peer group average. The prospective yield on SIGT is just over 4%.
SIGT aims to outperform three-month Libor +3% by investing in a range of asset classes including UK and overseas equities, fixed income and specialist investments including property and private equity. A strategic asset allocation has been set to meet the trust’s objective, and chief investment officer Peter Elston makes tactical asset allocation decisions around this with individual holdings selected by the managers and other members of the investment team.UK equity exposure is gained through direct equities, while the bulk of other positions are in dedicated funds.
The year has started with heightened concerns over the pace of global growth and a further trimming of expectations. China remains a particular focus of uncertainty. Against this most estimates still look for economic growth to continue and from an equity market perspective valuations have retreated from recent highs, supporting the managers’ view that the market could make modest progress this year. SIGT’s distinctive multi-asset approach could prove particularly well suited to addressing the challenges of volatile markets and a range of macroeconomic risks.
SIGT’s discount has narrowed over time and currently stands at a discount to cumincome NAV of 3.3%.This is probably a reflection of a strong performance relative to the FTSE All-Share, 4.3% prospective yield and the prospective adoption of a discount control mechanism.