Seneca Global Income & Growth Trust (SIGT) has a value-biased, multi-asset investment strategy. It aims to generate average total returns of at least CPI +6% pa over the course of a typical investment cycle. Recent performance has been significantly enhanced by the holding in financial platform AJ Bell, whose shares have nearly trebled since listing in December 2018. This has more than offset the negative effects from SIGT’s lack of exposure to US equities and safe-haven government bonds, which have performed relatively well. SIGT has a positive medium- and long-term track record versus its benchmark, despite growth rather than value stocks leading the markets in recent years. Performance has been helped by its c 30% exposure to specialist assets, which offer the potential for enhanced total returns, including high yields, supported by stable, inflation-linked income streams, along with lower volatility.
At any given stage of the investment cycle, valuation opportunities vary across asset classes. An experienced management team, with a multi-asset approach, has the potential to exploit changes in the opportunity set to generate a diversified income stream and long-term capital growth over the course of a business cycle.
Actively managed fund across multiple asset classes. More defensive positioning ahead of anticipated stock market pullback in 2020. Medium- and long-term outperformance versus benchmark. Lower volatility total returns versus peers and UK stock market. High and growing revenue stream; current 3.6% dividend yield. Active discount control mechanism providing adequate liquidity.
SIGT has employed a discount control mechanism since August 2016, aiming to ensure that its share price regularly trades close to NAV. Its current 1.8% share price premium to cum-income NAV compares with the range of a 2.4% premium to a 2.8% discount over the last 12 months, and average premiums of 0.5% and 0.6% over the past one and three years, respectively. The board aims to grow SIGT’s annual dividend above the rate of UK inflation, and has increased its distribution for the last six consecutive financial years. Gearing of up to 25% of NAV is permitted; net gearing was 3.0% at end-April 2019.