Shires Income Trust NAV soars

11th Nov 2009 12:28

Aberdeen Asset managed Shires Income comfortably outstripped both Footsie and the FT All-Share over the last six months, with NAV soaring by 46% due to a combination of good stock picks and gearing benefits.In the half year to 30 September 2009, NAV increased by 46% from 118.8p to 173.5p. The total return on net assets, which includes dividends, increased by 58.9% compared with the FTSE All Share's total return of 35.7%.The outperformance versus benchmark was due to the positive impact of both good stock selection and gearing in a period of increasing share prices, Aberdeen said.The equity portfolio benefited from its exposure to Industrial and Consumer Services sectors and from smaller company investments including the holding in Shires Smaller Companies. Preference share holdings were also positive contributors, although not as much as equities.Over the six months under review, gearing declined from 55.2% to 37.3%, principally due to the appreciation in assets. A new holding was established in Pearson, the media and education business which has a solid balance sheet and opportunities to develop its content from textbooks to the internet. Another new addition was Weir Group, Aberdeen said.The value of the listed investments increased from £52.7m to £69m. At the end of September 2009, around two thirds of gross assets were invested in equities with the balance in preference and convertible shares.The board expects to pay a dividend of 12p per share for the full year. "As shareholders will appreciate this prospect depends on market conditions and a still fragile economic situation".