Investment Trusts  

Sanditon: Investors have to get used to zero returns

Sanditon: Investors have to get used to zero returns

Investors have to get used to an era of low, or no, returns, according to the chairman of the Sanditon Investment trust, as the asset manager saw funds under management fall during the first six months of year.

According to results for the year ending 30 June, the £53m trust has managed to make a modest return despite wobbly markets, achieving 5.8 per cent over the last 12 months.

Chairman Rupert Barclay said it had been an encouraging first two years since Sanditon Asset Management launched back in June 2014, but admitted the past six months have been more challenging for the firm, with funds falling from a peak of over £630m at the end of last year to £568m at 30 June. 

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He said negative interest rates, elevated asset prices and “anaemic” global growth remain significant hurdles for all investors, pointing to the Brexit vote, which he said has created another layer of uncertainty.

“We can but hope that common sense prevails and this vote does not usher in a period of protectionism but...Brexit or no Brexit, these are very challenging times for all investors. 

“We all have to get used to an era of low, or no, returns,” he said.

The trust has seen its net asset value (NAV) per share dip to 2.7 per cent from 3 per cent.

Its share price has remained relatively flat over the year, falling slightly to £1.064 for the year, from £1.065.

The shares have traded at a modest premium throughout the year, and at lower volatility than the European and UK equity markets, which Mr Barclay said was due to the market neutral structure of the portfolio.

He said: “This year has been a very challenging period for the investment industry, with the Brexit referendum acting as a constraint on buying UK funds in particular. 

“Time will tell, now the referendum is out of the way, whether conditions get any easier.”