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The principal objective of the Company is to provide shareholders with an attractive income yield and the prospect of income and capital growth through investing in a portfolio of predominantly UK equities.
FSA Share Fraud Warning
Share fraud includes scams where investors are called out of the blue and offered shares that often turn out to be worthless or non-existent, or an inflated price for shares they own. These calls come from fraudsters operating in ‘boiler rooms’ that are mostly based abroad.
Please click here to access a copy of the new FSA Share Fraud Warning leaflet, published February 2012
Manager's Monthly Report
April Commentary
During April the Trust delivered a Net Asset Value total return of +0.3% and a share price total return of +2.8%. This compares with a –0.3% return for the FTSE All Share Index.
Despite the rigours of our investment process we can not always eliminate all unwanted risks from your portfolio. In January Tesco plc delivered a profit warning that painfully reminded us, and much of the market, of that truth. It is now clear that for some time the business was being run too aggressively in order to ensure that earnings forecasts continued to be met. Such practices are never sustainable and the failure of Tesco’s Big Price Drop initiative at the end of 2011 was the final straw. Investors were then left to decide how quickly and easily management could get the business back on track.
Our concerns are that Tesco is a very cumbersome and difficult ship to turn around. Although the margin investment in some solutions (like more staff in store) is relatively easy to implement it is clear that there are also deeper rooted problems. Amongst others, Tesco’s UK food offering has lost its resonance with the customer and many aspects of the non-food offering are struggling to meet profitability targets. This suggests that the store portfolio may need significant reshaping and remodelling, and that is no small task. These changes would be difficult enough to make in a benevolent environment but that is not what Tesco faces. The UK consumer is weak, the competition increasingly focused, and the Tesco management team seems far from stable. For these reasons we have now sold the Trust’s holding in Tesco.
