British Assets Trust outperforms benchmark in first half

British Assets Trust is a globally diversified investment trust managed by Julie Dent at F&C Investments in Edinburgh.

It sits in the AIC's Global Growth & Income sector and has a total return focus. Around 60% of assets are invested in UK equities, with the bulk of the remainder split between global developed and global emerging markets portfolios. There is also a corporate bond element making up roughly 11% of the portfolio. 

Net asset value total return of 13.1% for the period, compared with a total return of 12.6% for the composite (75% FTSE All-Share/25% FTSE World ex UK) benchmark.

Returns were boosted by gearing in a rising market (gearing net of cash in the equity portfolio stood at 5.1% at 31 March).

Emerging markets exposure continues to benefit the portfolio, in terms of both stock selection and relative to developed markets.

Interim dividends of 1.442p per share maintained at the same level as the previous year. There are three interim dividends, payable in April, July and October.

The Board considers it likely that the final dividend (payable in January 2011) will be maintained, but given analyst expectations of an improving picture for dividends, will keep the possibility of an increase under review.

Commenting on the outlook for the trust, British Assets Trust chairman Lynn Ruddick said: "Emerging markets should continue to outperform developed markets as strengthening world trade growth and rising commodity prices favour the former, coupled with a strong investment case based on good long-term growth prospects. In the UK, many of the best-performing stocks in 2009 paid no dividends at all. However, income remains scarce and we would expect to see investors shift attention to dividend paying stocks as 2010 progresses, which should be of benefit to the Company's portfolio."