Dunedin trust falls short of benchmark

Dunedin’s net asst value per share rose by 0.7 per cent in the six months to the end of April on a total return basis.

This compares with a total return of 1.3 per cent from the benchmark index, the FTSE SmallCap Index (excluding investment companies).

The better performers during the first half included Glasgow-based Smart Metering Systems, a recent introduction to the portfolio.

The trust’s board has declared an unchanged interim dividend of 2.15p per share. It intends to at least maintain last year’s total dividends of 6p per share.

Chairman Norman Yarrow said: “Although markets increased over the period as a whole, there was significant volatility, with sentiment dominated by concerns over slowing growth in China and the weakness of commodity prices, in particular oil, which fell to below $30 per barrel for the first time in 12 years. Towards the end of the period, sentiment improved as the Chinese authorities and European Central Bank announced further measures to stimulate their economies, resulting in an increase in investor appetite for risk.”

Looking ahead, he said: “The prospects for global economic growth remain uncertain, with China central to the outcome. The Chinese authorities have tilted policy away from reform and towards fiscal stimulus and for the time being this looks set to support growth. In the UK, although the recovery is continuing, it remains fragile and the timing of interest rate increases keeps moving further out. The uncertainty caused by the referendum on EU membership has been unhelpful in the context of both investor and corporate sentiment.