London, UK, 23 March 2017
Edison issues review on Seneca Global Income & Growth Trust (SIGT)
Seneca Global Income & Growth Trust (SIGT) aims to generate income and long-term capital growth across multiple asset classes with low volatility. The trust adopts a long-term strategic asset allocation to equities (60%, split 35% to UK and 25% to overseas - with modest US exposure), fixed income (15%) and specialist assets (25%, generally yielding 5-8%). Shorter-term tactical asset allocations are made with a view to enhancing portfolio returns. For UK equity exposure, SIGT focuses on mid-cap companies, which over time tend to outperform the broader market. SIGT retains zero exposure to developed market government bonds, which the manager considers expensive. Following the change in mandate in 2012, SIGT's NAV total return has outperformed the FTSE All-Share index, with significantly lower volatility; while dividends and reserves have grown every year.
SIGT's shares are currently trading at a 0.7% premium to cum-income NAV, this compares to the 0.4% average discount of the last 12 months (range of a 3.3% premium to a 5.6% discount), and the discounts of the last three, five and 10 years (range of 2.5% to 6.9%). Since the change in mandate in 2012, SIGT has regularly increased its annual dividend; its prospective yield is 3.6%, which compares favourably to its peers in the AIC Flexible Investment sector.
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