Seneca Global says Pfizer coronavirus vaccine has given boost to portfolio and strategy

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Seneca Global Income & Growth Trust PLC (LON:SIGT) has said that Pzier/BioNtech’s coronavirus (COVID-19) vaccine might mark the tipping point for a switch away from tech and towards value-based strategies.

The value-focused trust said its net asset value (NAV) total return per share was 12.4% in November as markets rallied following the Pfizer announcement, adding that it is now possible to imagine a timetable for recovery from COVID-19 even if it takes many months.

“Whereas before 9 November this was not possible and so the reaction of investment markets makes sense,” it added.

SIGT posted a total return of 10.5% in the six months to October 31, 2020, compared to 3.6% for its benchmark though NAV of 143.96p was still well below the 172.9p recorded a year ago but higher than the 133.1p in April

There were good showings from Halfords and Purplebricks in the period with National Express and Babcock the worst performers.

SIGT made two quarterly dividends of 1.68p during the half-year and said it intends to maintain its dividend payment at this rate for the full year to April 2021 even though many listed companies have cut or suspended payments due to COVID-19.

Once this picture becomes clearer, SIGT said it will evaluate an appropriate level for the dividend.

SIGT’s investment manager Seneca was recently taken over by Momentum Global but the team will remain unchanged, the group said, while its new owner shares a similar philosophy of multi-asset value investing.

The trust posted a profit of £6.4mln (2019 loss £1.39mln) for the half-year.

Kepler says strong performance relative to benchmark

Kepler Intelligence added that SIGT yielded 4.8% as of the end of the period and has paid two dividends in line with the previous year.

“The managers of SIGT employ a unique value-influenced decision-making process, across a wide range of assets. Currently, SIGT is comprised of UK and overseas equities, fixed interest, specialists funds and property, with different management approaches applied to each.

The trust research specialist added: “The performance of the trust over the six month period was strong relative to the benchmark and we note that it was achieved at a lower annualised volatility than the FTSE All-Share Index.

“That said the benchmark was adopted in 2017 and the board believes that it can be dangerous to look at short term comparisons, instead favouring measurements over a ‘typical investment cycle’ which the board believes is at least five years.”

Shares were unchanged at 160p.

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