BMO UK High Income Trust (BMO) has recorded a net asset value (NAV) total return per share of 37.4 percent, according to its newly released financial results for the year ending on 31 March.
In a challenging period for the market, the trust’s performance was ahead of the FTSE All-Share Index, which recorded a total return of 26.7 percent.
Its financial data also revealed a distribution yield of 5.8 percent on ordinary shares and B shares at 31, compared to the yield on the FTSE All-Share Index of 2.9 percent. Total distributions increased by 1.7 percent to 5.3p per share compared to the prior year
Share price total return for Ordinary shares and B shares stood at 40.8 percent and 44.9 percent respectively, compared to the FTSE All-Share Index total return, at 26.7 percent.
Highlights within portfolio included strong returns of Brewin Dolphin, Close Brothers and Intermediate Capital Group, which delivered total returns of 49 percent, 44 percent and 114 percent respectively. BMO believes this validates the decision to own quality mid-cap financials.
Following the pandemic, structural growth technology stocks, including Just Eat Takeaway, Delivery Hero and The Hut Group now make up 10 percent of the portfolio
Chairman J M Evans said: “We are pleased the company has produced excellent returns in both absolute and relative terms for shareholders, in a period where there were major concerns around the impact the lockdown might have on economic activity and corporate profitability.”
Commenting on the performance and selection process, fund manager Philip Webster explained: “This year’s performance is the culmination of several years of work we have done to differentiate the portfolio through concentration, giving the company a strong foundation for us to take active decisions throughout the financial year. We cut some of the weakest sectors pre-Covid, namely oil & gas and banks, increased the quality and contrarian views in the mid-cap space, added to our European exposure and upped our technology weight to around 10% of the portfolio.
He concluded: “Looking forward, I am encouraged by the balance we have across our holdings. We have a good mix of businesses that are likely to benefit from the opening-up of trade, a recovering UK economy, and high-growth technology businesses that have seen a structural shift in behaviour.”