Aberdeen Standard Equity Income Trust has had a torrid year with the net asset value for the year dipping 10.8%, and share price total return dropping 15.1% against the FTSE All-Share Index total return of 2.7%.
“After a performance in 2018 which I described as ‘solid’, our results this year have come as a considerable disappointment,’’ admitted chairman Richard Burns.
The total return over ten years has been 120.1%, which matches the FTSE All-Share Index. This is the 19th successive year in the annual dividend and the board anticipates being able to increase the dividend for a 20th time in the coming year.
“This is a very poor result and there is no point in pretending otherwise. It is true that the market background over the year has been unhelpful to the manager's investment style. The performance of the index has been largely driven by large capitalization stocks whose profits predominantly arise outside the United Kingdom and whose shares have appeared to us too highly rated - names such as Diageo, Unilever and RELX.’’
“This unrewarding investment stance has not been mitigated, as might have been hoped, by successful stock picking; indeed the reverse is very much the case. Attribution analysis reveals a significant negative contribution from stock selection, largely the result of several serious disasters, such as Kier Group and Staffline,
Burns reminded investors: “It should be remembered that yours is a company which has as its objective ‘to provide shareholders with an above average income from their equity investment, while also providing real growth in capital and income’. We have achieved most of this objective this year, though obviously not "real growth in capital", but we have fully achieved the objective over three, five and ten years.’’
