Annual Financial Report

THE DIVERSE INCOME TRUST PLC

ANNUAL REPORT AND ACCOUNTS FOR THE YEAR TO 31 MAY 2022

AND

NOTICE OF ANNUAL GENERAL MEETING

The Diverse Income Trust plc (the “Company”, “Diverse” or the “Trust”) announces its annual results for the year ended 31 May 2022 and the publication of its annual report and accounts for the same period, which includes the notice of Annual General Meeting.

HIGHLIGHTS

SUMMARY OF RESULTS FOR THE YEAR TO 31 MAY 2022

• NAV total return* to shareholders of -3.41% This includes the change in NAV, plus the dividends paid during the year and compares with an increase in the Numis All-Share Index of 4.74% on a total return basis over the year to 31 May 2022.
• 3.90p of ordinary dividends for the year The three interim dividends and the proposed final dividend for the year amount to 3.90p, compared with 3.75p in the previous year, an increase of 4%.
• Share price total return* to shareholders of -10.53% The share price total return was -10.53%, reflecting the decline in the NAV and the widening of the discount towards the year-end.
• Revenue reserves were £15.9m (2021: £15.2m) The Company’s revenue return after taxation was £14.5m, which compares with dividends distributed to shareholders during the year of £13.8. At the year end £15.9m of revenue reserves remain available to enable us to make consistent dividend distributions to shareholders.

	31 May 2022	31 May 2021	Change
NAV per ordinary share*	110.55p	118.31p	(6.6)%
Ordinary share price (mid)	103.00p	119.00p	(13.4)%
(Discount)/premium to NAV*	(6.83%)	0.58%
Revenue return per ordinary share*	4.01p	3.73p
Dividends per ordinary share paid/ declared	3.90p	3.75p	4.0%
Ongoing charges*	1.05%	1.06%
Ordinary shares in issue	361,920,105	361,445,105

KEY PERFORMANCE INDICATORS

The Board has the following Key Performance Indicators (KPIs) that are used to gauge the success of the Company’s strategy and its outcome for shareholders.

NAV total return* – Over the year, the NAV total return of the Trust was -3.4% (2021: 38.4%), which compares to 2.1% (2021: 38.3%) for the peer group** and 4.7% (2021: 25.2%) for the Numis All-Share Index. Since the Company’s listing in April 2011, its NAV total return including compounded dividend income was 228.1% which compares to 140.7% for the peer group** and 90.2% for the Numis All-Share Index.

Growth of ordinary dividends to shareholders – Over the year, the four dividends to shareholders have increased from 3.75p to 3.90p. The Trust’s revenue per share for the year to 31 May 2022 has now exceeded that of the year to 31 May 2019, prior to numerous dividend cuts by UK quoted companies during the pandemic.

Discount* – Over the year to 31 May 2022, the share price discount averaged 1.44%, moving from trading at par at the start of the year, to trading at a 6.8% discount at the end, in line with other companies within the Trust's peer group**. Over the period since the Trust was first listed, its share price has traded both above and below its daily NAV, with the long-term average being in line with its NAV.

Ongoing charges* – The ongoing charges for the year to 31 May 2022 are 1.05% of NAV (2021: 1.06%), which compares with 0.58% for the peer group**. The Board pays careful attention to expenses and believes that the Trust’s overall costs are justifiable in the context of its specialist investment universe, and premium returns it has delivered since issue.

* Alternative performance measure. Details provided in the Glossary in the full Annual Report.

** The peer group is the AIC’s UK Equity Income Investment Trust sector as defined in the glossary in the full Annual Report. One outlier (British & American Investment Trust) has been excluded from the calculation of the peer group's ongoing charges ratio, in order to provide a figure which is comparable and not skewed by one exceptionally high ratio.

CHAIRMAN’S STATEMENT

“The Company’s exposure to smaller companies was a headwind this year, having boosted returns in 2021”

This report covers the year to May 2022, a period of gradual economic recovery from the pandemic lockdowns but accompanied by increasing inflationary pressures, which have been exacerbated by the effects of the Russian invasion of Ukraine on energy and food prices. The combination of these factors coupled with rising interest rates has reversed the earlier buoyancy in equity markets, particularly in those areas where over-abundant liquidity had led to speculative excesses and a bubble in valuations. The UK, as a relatively lowly valued market, has been more resilient than most, while the US has fallen further owing to its higher valuation, concentrated in the technology sector.

Annual returns

With inflation proving more prevalent than anticipated, global asset valuations have come under pressure during 2022. The NAV total return of the Trust fell 3.4% in the year to 31 May 2022, which compares with a rise of 4.7% in the Numis All-Share index (including investment companies) and a 9.5% decline in Numis Small Cap Plus AIM Index (excluding Investment Companies).

The weakness of sterling boosted the returns of larger UK quoted companies, which earn most of their earnings overseas, hence the unusually wide disparity between the returns on the UK market as a whole and those of smaller companies. The Company’s exposure to smaller companies was a relative headwind this year, having boosted returns the previous year.

Returns since April 2011

Over the eleven years since the Trust was first listed in April 2011, its NAV total return has been 228.11%, well ahead of the 90.22% total return from the Numis All-Share Index over the same period. The Trust’s return was also ahead of the 110.87% return from the Numis Small Cap Plus AIM Index (excluding Investment Companies).

Income

The Diverse Income Trust was set up to deliver attractive total returns and pay an attractive stream of growing dividends, derived from investment in a multi-cap portfolio of companies principally listed on the London Stock Exchange and AIM exchanges. Over the year to May 2022, the Trust’s revenue per share rose from 3.73p to 4.01p, a figure in line with that for the year to May 2019, prior to the spate of dividend cuts over the pandemic. The Board has declared three interim dividends amounting to 2.70p and if the proposed final dividend of 1.20p is approved by shareholders, together they amount to 3.90p, up 4% from the 3.75p paid in respect of last year. A small addition has also been made to revenue reserves, available to support future dividend growth, in case the portfolio’s dividend income is held back by rising inflation and slower growth over the year ahead.

Share Issuance and Redemptions

Over the year to May 2022, the Company’s share price discount to NAV averaged 1.4% which was an improvement on the 4.8% average discount in the prior year. However, amid this year’s uncertainties resulting from the surge in inflation and consequently rising interest rates, deteriorating market sentiment resulted in the discount ending the year at a relatively wide 6.8%, compared with a small premium at the end of May 2021. The Board views the recent widening as temporary but remains willing to use its share buyback authority should a wide and anomalous discount persist.

The Company also offers all shareholders the option to redeem their shares each year. At the end of April 2022, 6,049,458 shares (1.7% of the issued share capital) were offered for redemption in respect of the 31 May 2022 Redemption Point. These were redeemed on 16 June 2022, the redemption value being the NAV calculated as at 30 May 2022.

Board Refreshment

During the year, a search was conducted for a new non-Executive Director, using Nurole, an external search agency. As reported at the interim stage, following this process, Charles Crole was appointed and joined the Board from 1 February 2022. Charles has extensive experience as a UK equity fund manager and in the marketing of investment trusts, both of which skills the Board views as central to its role. Paul Craig, who had served as a non-Executive Director since 2011, stood down following the appointment. I should like to take this opportunity to welcome Charles to the Board and to thank Paul for his wise counsel and service to shareholders from 2011 until 2022.

Prospects

For the first time in several decades, investors are having to contend with high and persistent levels of inflation. The Bank of England’s largesse in sustaining its boost to the money supply at near zero interest rates, at a time when trade frictions and pandemic disruptions were undermining the economy’s ability to meet consumer demand, has contributed to UK inflation hitting the highest level for 40 years.

Although some of the causes of inflation are not responsive to higher interest rates (for example the shortage of oil and gas production, disruption to trade with China and the impact of the Russian invasion of Ukraine on food prices), high global levels of inflation have left central banks with no alternative to raising rates in order to reduce demand, even at the risk of a recession. Given these risks, the Company’s Manager has recently purchased a FTSE 100 Put Option covering the period to December 2023, replacing the Put Option purchased in 2021 which was due to expire in December 2022. This provides a degree of downside protection for the Company’s assets in the event that economic pressures intensify and lead to a significant fall in global equity markets. Further details are set out in the Manager’s Report below.

The stock market implications are particularly negative for the most highly rated sectors and those valued on hopes of becoming profitable at a distant future date. Cheap money in recent years led to growth being chased irrespective of valuation, whereas higher interest rates have ushered in a more sceptical view. The exceptionally high ratings on many technology stocks have fallen, while job cuts and corporate collapses in more speculative areas are a reminder of the vulnerability of companies with negative cash flows.

The UK market in 2022 has, in contrast with recent years, held up better than most. This is partly due to its sector mix (given the index’s exposure to higher commodity prices and banks’ margins benefiting from higher interest rates) but also due to its low valuation. Growth is important but paying a realistic price for it is essential. If inflationary pressures were to become endemic, the benefits of the UK market’s lowly-rated cash flows could attract greater investor attention.

Diverse Income Trust’s widely spread portfolio of companies with good and growing dividends has delivered premium returns. This is despite the headwind from purchasing companies with tangible cash flows at attractive valuations, during an era when investors’ focus was on growth alone. The Board believes that the Company’s distinctive features continue to offer shareholders the potential for further income growth as well as actively managed exposure across the UK equity universe, including the strength and diversity on offer in the mid- and small-cap areas of the UK market.

Andrew Bell

Chairman

8 August 2022

MANAGER’S REPORT

This Manager’s Report has been set out in two parts. The first part highlights a risk that appears to have become more acute as inflationary pressures have persisted. If our fears are justified, corporate profitability could come under sustained pressure. We have set out the reasoning for our anxiety, and some of the features that we use to select portfolio holdings across this first section, to give it prominence. Thereafter, we have set out in greater detail some of the answers to the key questions that we believe investors might have with regard to the Trust’s returns in the year under review, some features of the portfolio construction such as the inclusion of the FTSE 100 Put Option, and the prospects for the future.

We worry that the changing market trends may be accompanied by lower profit margins…

…and hence we have a stock selection process that actively seeks to address this risk.

During globalisation, economic slowdowns were addressed by boosting demand, enhancing corporate growth and profits

During globalisation, inflationary pressures were subdued principally due to abundant imports of low-cost goods. During these decades, supply exceeded demand, so when economic growth slowed, central banks were able to address the problem by increasing demand – typically through reducing interest rates or more latterly via financial stimulus in the form of Quantitative Easing.

When demand is boosted, businesses tend to benefit, as it drives additional sales and profits.  Overall, the decades of globalisation were marked by a long period of ongoing sales and profit growth, that led many businesses to enjoy increased profit margins.

Over the last couple of years 'demand' has increased, but with the trade tariffs, COVID-19 and the Ukrainian conflict, the ability to 'supply' has reduced. Overall, central banks are currently obliged to bear down on demand, to bring it back into balance with supply

Even prior to COVID-19, trade tariffs were starting to scale back the ability of the global economy to supply. Subsequently, it has reduced further due to the global pandemic and the Ukrainian conflict. Excessive demand relative to supply has now led to renewed inflation, with central banks obliged to constrain demand, to bring it back into balance with supply.

Suppressing demand represents a major business challenge, as there are fewer sales to go around. As sales fall away, it often sparks price wars, that drive down profit margins as well. The risk is that there is a major reduction in profitability, with some potential for insolvency for the over-levered.

The best chance of holding on to margins lies with businesses that deliver outstanding customer service

With inflation, it appears that many businesses could come under margin pressure, as demand moderates, and companies seek to hang on to customers, even if this involves cutting prices. Generally, businesses delivering poor customer service are often the most vulnerable in these circumstances. Conversely, companies delivering not just good, but outstanding levels of customer service can sometimes retain their customers even when others are offering similar services at lower prices.

Given that most quoted companies notionally say they prioritise customer service, how can we identify those that are genuine?

Management teams genuinely interested in customer service are normally diligent in collating the data and including it in their regular board packs. In our Manager’s meetings with management teams, they have long asked a series of detailed questions on this data, to differentiate between those who are genuinely interested in customer service versus those that say they are. Furthermore, management teams that are truly aligned ensure they make it as easy as possible for front-line staff to deliver service. Hence the Manager often follows up by asking whether management actively ask about their problems, via regular staff surveys for example. These questions help the Manager to prioritise portfolio holdings that have management teams that have a definite ambition to deliver outstanding customer service.

Key questions that shareholders may ask of the Manager

Who are the specific fund managers of the Trust?

Premier Miton Group plc is an independent, listed fund management company, formed from the merger of Premier Asset Management and Miton Group in November 2019, with a well-established reputation for successfully managing UK-quoted smaller company portfolios over the longer term. The Trust’s Board appointed Premier Miton as Manager when it was listed in April 2011.

The day-to-day management of the Trust’s portfolio continues to be carried out by Gervais Williams and Martin Turner, who came together as a team in April 2011.

Gervais Williams

Gervais joined Miton in March 2011 and is now Head of Equities in Premier Miton. He has been an equity fund manager since 1985, including 17 years at Gartmore. He was named Fund Manager of the Year by What Investment? in 2014. Gervais is also a board member of the Quoted Companies Alliance and a member of the AIM Advisory Council.

Martin Turner

Martin joined Miton in May 2011. Martin and Gervais have had a close working relationship since 2004, with complementary expertise that led them to back a series of successful companies. Martin qualified as a Chartered Accountant with Arthur Anderson and had senior roles and extensive experience at Merrill Lynch and Collins Stewart.

Why are the index comparatives used in this report different from those used previously?

When the Trust was first listed in April 2011, the Prospectus set out that given the multi-cap bias of the portfolio, there wasn’t a suitable equity index similar enough to be a formal benchmark. Even so, the Trust has routinely set its results in the context of the returns of various FTSE Index equity indices since issue, to provide some perspective.

The London Stock Exchange that owns the FTSE Index data has recently concluded that although the Manager pays for a licence to use this data, in future this will not extend to its use by the Manager’s clients. Premier Miton already has a licence to use the Numis Index data, and Numis have confirmed that its terms will continue to include its use by Premier Miton clients. Therefore, as outlined in the Trust’s Interim Report, it need not pay the cost of a new FTSE Index licence if it uses the Numis Equity Indices data as a performance comparator in future.

What were the main contributors to the Trust’s return over the year?

In prior periods, the Trust has outperformed the equity income peer group. In contrast, this year, the multi-cap bias of the Trust’s portfolio was something of an impediment. The share prices of the largest UK quoted companies that have a majority of their businesses overseas, greatly outperformed most other UK-listed stocks over the year to May 2022, in part as their earnings are enhanced when sterling is weak. Hence, over the year to May 2022, the NAV total return of the Trust declined by 3.41% which compares with a rise of 4.74% for the Numis All Share Index over the same period. The equity income bias of the Trust’s portfolio did continue to add value relative to other strategies however, and the Trust greatly outperformed the return of the Numis Small Cap Plus AIM Index (excluding Investment Companies) which declined by 11.67% over the year.

Although global equity markets have been quite unsettled over the second half of the year under review, in fact the largest detractor to portfolio return in the period was the FTSE 100 Index Put Option, as it bucked the global asset market trend. After a very strong period of outperformance last year, the Trust’s holding in CMC Markets was trimmed, and in the year to May 2022 its share price has fallen back. Hence, whilst CMC Markets was the second worst detractor to portfolio return in the period under review, it still remains the second best contributor over the two years to May 2022. Meanwhile, it still remains part of the portfolio given the potential for it to deliver even greater returns in future.

In terms of positive contributions, the Trust’s holdings in Energy were easily the strongest, in aggregate adding 4.0% to the Trusts returns over the year, with i3Energy adding over half of this total. The second best contributor was Utilities as the portfolio holdings in both Drax and National Grid contributed over 1.0% to portfolio return between them.

As the FTSE 100 Put Option didn’t assist this year in providing an offset to the general weakness of markets, what are the advantages of including it in the portfolio?

In general, the valuation of a FTSE100 Put Option is often negatively correlated with fluctuations of the Trust’s portfolio, and most especially at times of major market distress. The Trust has held a FTSE100 Put Option in the past, although as major stock market setbacks happen infrequently, often they decline in value as their term expires. When stock markets do suffer a major setback however, such as during the global pandemic, the valuation of a FTSE100 Put Option can rise to a multiple of its initial cost. This was helpful during the pandemic as it offset, in part, the decline in the rest of the Trust’s portfolio valuation during the year to May 2020.

When Put Options rise to elevated valuations they can be sold, and in March 2020 the Trust’s FTSE100 Put Option was sold, and the cash receipts from the sale were invested in additional equity income holdings at relatively low entry prices. These new holdings boosted the recovery of the Trust’s portfolio as the stock market rose thereafter. Importantly, although the revenue from the Trust’s portfolio fell in the year to May 2020 as many companies cut their dividends, with the new holdings and the extra dividend income they generated, the Trust was in a stronger position to fund a sustained and slightly growing stream of dividends to shareholders over this period.

Whilst investing in FTSE100 Put Options does have advantages during stock market setbacks, it is worth keeping in mind that setbacks happen infrequently, and more often the valuation of a FTSE100 Put Option investment declines over time. To minimise such losses, the Strike price* of the FTSE100 Put Options is typically set at a level somewhat below the FTSE100 trading level at the time of purchase.

Over the year to May 2022, a FTSE100 Put Option was purchased early in the period. Although the Trust’s portfolio has declined in value over the year, this trend hasn’t been reflected in the fluctuations of the FTSE100 Index. Overall, the valuation of the FTSE100 Put Option has reduced during the year as its term has reduced and the FTSE100 Index was a lot more resilient than the portfolio, and indeed than most other mainstream stock market indices.

Recently, during July 2022, the FTSE100 Put Option with a term to December 2022 was sold, and a new FTSE100 Option with a term to December 2023 was purchased. To moderate its potential cost were the FTSE100 Index to continue to be resilient, this new FTSE100 Put Option has a lower Strike price of 5,700 rather than 6,200 previously. Of course, if interest rate increases were to precipitate a global recession, and global stock markets such as the FTSE100 Index were to become much more unsettled, then the valuation of the new FTSE100 Put Option might appreciate in a similar manner to that of March 2020. With the new FTSE100 Index Put Option, the Trust’s portfolio would benefit were the FTSE100 Index to suffer a major setback prior to December 2023, rather than prior to December 2022 as previously, albeit that the new option comes at a higher cost given its longer term.

* As defined in the Glossary in the full Annual Report.

What are the main factors that have driven the Trust’s returns since it first listed in April 2011?

As noted elsewhere, the Trust’s strategy seeks to deliver a premium return, through investing in a portfolio where returns are delivered by compounding dividends from the portfolio, that hopefully grow over the longer term. Following the launch of the Trust in April 2011, the revenue from the Trust has steadily grown up to the year to May 2019.

The economic disruption of the global pandemic was so substantial that numerous UK-listed equity income stocks either suspended or cut their dividend payments to shareholders. Although the global economy has subsequently recovered, unfortunately this recovery has come at the expense of renewed inflationary pressures, where the extra costs may also lead to corporate margin pressure, and less buoyant dividends from UK-quoted companies.

Although the revenue per share from the Trust’s portfolio did initially decline during 2020 when numerous UK-listed companies did scale back their dividend payments, it is reassuring to note that it has recovered in the year to May 2022. The Trust’s revenue per share appears to have grown better than many others during the period of globalisation, and also to have been more resilient than others subsequently. Given that academic evidence suggests that longer term return is principally derived from the compounding of the initial yield, plus the benefit of any subsequent yield improvement, it would appear that the Trust’s superior revenue per share is one explanation why it has delivered such strong returns since issue.

Total returns of the Trust, the Numis All Share Index, the Numis Small Cap plus AIM Index (excluding Investment Companies) and the NAV total return of the Trust between April 2011 to May 2022

	%
The Diverse Income Trust Plc	228.11
Numis LargeCap Index (excluding ICs)	82.17
Numis MidCap Index (excluding ICs)	115.52
Numis SmallCap Index (excluding ICs)	140.00
Numis Alternative Markets Index (excluding ICs)	17.55
Numis All-Share Index	90.22

Why does the Diverse Income Trust include UK quoted small and micro-caps in its investment universe?

Prior to a sustained period of globalisation, the returns on mainstream stock markets were often related to the rate of underlying inflation. UK-quoted small and micro-caps delivered premium returns, so institutions often made capital allocations to them because of the commercial pressures to access the premium returns they offered.

During the period of globalisation, asset returns of all kinds have been incredibly plentiful, so institutional allocations into quoted small and micro-cap stocks have been crowded out by larger weightings in long-duration assets such as the US technology unicorns. Indeed, over recent decades most quoted micro-cap stock markets around the world have been closed for lack of institutional interest.

In contrast to others, the UK government has sustained the support for a quoted small and micro-cap exchange via dedicated tax exemptions, as quoted micro-caps often generate additional skilled employment and increased productivity. This ultimately contributes to additional tax take for the Exchequer.

Generally, we believe that the prospects for the UK economy may not differ much from other developed economies. The UK stock exchange differs from others in having retained a vibrant universe of UK quoted micro-caps with all the advantages this has brought in the past, particularly in the decades prior to globalisation. Note that even now, the number of listed stocks with a market capitalisation of less than £150m, is not dissimilar to the number of stocks with market capitalisations above this metric. If declining valuations of bonds and interest rate rises are likely to depress prospective returns on stock markets generally, then the premium returns on UK-quoted small and micro-caps can be expected to generate renewed interest from institutional investors.

Number of UK-quoted companies below and above £150m market capitalisation

	Number of companies
Under £150m	605	£17.2bn Combined Market Capitalisation
Over £150m	554	£2,331.2bn Combined Market Capitalisation

Source: These companies are listed on the LSE or the AIM Exchange.

What are the prospects for the Trust?

In the early part of 2022, stock market weakness was principally related to a decline in asset valuations given ongoing inflationary pressures, the new uncertainties from the Ukrainian conflict, and the persistent pandemic outbreaks. More recently, it has been the synchronised, accelerating rise in short term interest rates that is anticipated to slow global demand, and potentially initiate demand destruction, via a global recession that has driven weak share prices.

As outlined at the start of this Manager’s Report, with a forthcoming demand moderation, we fear corporates may now find it harder to achieve prices that sustain current profitability. Furthermore, if demand were to decline, there is a risk it might spark a competitive price war as companies seek to retain customers, or sales disappointments if they don’t participate.

Despite giant challenges to the stock market participants of past decades, generally access to cash has not deteriorated seriously for more than a year or so. During the global financial crisis for example, UK interest rates were quickly cut from 5.75% to 0.5% and Quantitative Easing was used for the first time. Similar parallels can be made with regard to the pandemic, where giant government assistance helped businesses remain solvent, even in the face of a major decline in profitability.

In contrast, with this slowdown, companies may now be faced with a severe corporate cashflow challenge that may persist for some time, given the ongoing rise in interest rates. Furthermore, profitability might be adversely affected as well by potential price wars and sales disappointments.

Since the dividend yield on equity income stocks rises during bear markets, they can become attractive to a wider range of potential investors. Being quoted, equity income stocks also have the potential to keep the viable but formerly over-levered businesses going by acquiring them debt-free at distressed valuations from the receiver. Investors support these kinds of transactions when they enhance their future cash surpluses, and hence potentially accelerate dividend growth. Were capital to remain scarce for an extended period, then investor demand and the prospects for UK-quoted equity income strategies might be relatively resilient.

Over the past year, US dollar strength has favoured many of the very largest UK quoted companies as they have the vast majority of their earnings derived overseas. Meanwhile, AIM-listed stocks have often remained overlooked, and interest has recently been further tempered by uncertainty over the UK’s political leadership. The net effect has been that the return of the Diverse Income Trust with its multi-cap portfolio has lagged behind that of the peer group over the past year.

This effect has come through in a major valuation gap between many of the largest LSE-listed stocks and many AIM-listed competitors. The cashflow per share differential between some of the largest listed oil stocks and Independent Oil and Gas plc that is held in the Diverse Income Trust portfolio for example, appears notably wide.

This position isn’t quite unique. As set out earlier in this report, one of the features of the multi-cap nature of the Trust’s portfolio, is that its returns are often less correlated with the fluctuations of the mainstream indices. There may be any number of reasons that might catalyse a narrowing of valuations. Either way, we believe there is real scope for the Trust to have a period of performance catch-up. When this potential is overlaid with all the other advantages of the strategy, we consider that its prospects continue to be very attractive over both the short and longer term timeframes.

Gervais Williams and Martin Turner

8 August 2022

PORTFOLIO INFORMATION

As at 31 May 2022

Rank  Company	Sector & main activity	Valuation £000	% of net assets	Yield1 %
1  i3 Energy2	Energy	12,879	3.2	5.3
2  Kenmare Resources	Basic Materials	10,199	2.6	5.2
3  CMC Markets	Financials	9,801	2.5	3.9
4  K3 Capital2	Financials	8,191	2.0	3.6
5  Drax	Utilities	8,056	2.0	2.8
6  Savannah Energy2	Energy	7,278	1.8	-
7  National Grid	Utilities	6,912	1.7	4.4
8  MAN	Financials	6,513	1.6	4.3
9  888	Consumer Discretionary	5,888	1.5	1.7
10  FRP Advisory2	Industrials	5,673	1.4	2.6
Top 10 investments		81,390	20.3
11  iEnergizer2	Industrials	5,636	1.4	4.4
12  Legal & General	Financials	5,504	1.4	7.1
13  XPS Pensions	Financials	5,422	1.4	5.3
14  Phoenix	Financials	5,422	1.4	7.7
15  BT	Telecommunications	5,145	1.3	4.1
16  Aferian2	Telecommunications	5,041	1.2	2.3
17  Tesco	Consumer Staples	4,972	1.2	4.2
18  Just	Financials	4,816	1.2	1.2
19  Mears	Industrials	4,771	1.2	4.1
20  Galliford Try	Industrials	4,730	1.2	3.3
Top 20 investments		132,849	33.2
21  DWF	Industrials	4,652	1.2	5.8
22  Strix2	Industrials	4,519	1.1	4.2
23  Sainsbury (J)	Consumer Staples	4,501	1.1	5.7
24  CT Automotive	Consumer Discretionary	4,462	1.1	-
25  SSE	Utilities	4,458	1.1	4.8
26  BP	Energy	4,418	1.1	4.0
27  Jadestone Energy2	Energy	4,403	1.1	1.4
28  Direct Line Insurance	Financials	4,385	1.1	8.8
29  Vodafone	Telecommunications	4,300	1.1	5.9
30  Bloomsbury Publishing	Consumer Discretionary	4,289	1.1	4.5
Top 30 investments		177,236	44.3
31  Sabre Insurance	Financials	4,171	1.0	6.2
32  Pan African Resources2	Basic Materials	4,137	1.0	4.2
33  Plus500	Financials	3,930	1.0	6.1
34  Centamin	Basic Materials	3,925	1.0	8.9
35  Conygar Investment Company2	Real Estate	3,886	1.0	-
36  Rio Tinto	Basic Materials	3,827	1.0	13.2
37  Admiral	Financials	3,821	1.0	12.6
38  AVIVA	Financials	3,745	0.9	5.1
39  Lords Group Trading2	Financials	3,738	0.9	2.2
40  Hostelworld	Consumer Discretionary	3,667	0.9	-
Top 40 investments		216,083	54.0
Balance held in 89 equity investments		161,508	40.4
Total equity investments		377,591	94.4
Fixed interest investments		-	-
Total equity and fixed interest investments		377,591	94.4
Listed Put Option UKX – December 2022 6,200 Put		2,481	0.6
Total investment portfolio		380,072	95.0
Other net current assets		20,041	5.0
Net assets		400,113	100.0

A copy of the full portfolio of investments as at 31 May 2022 is available on the Company’s website, www.diverseincometrust.com.

1 Source: Refinitiv. Dividend yield based upon historic dividends and therefore not representative of future yields. Includes special dividends where known.

2 AIM/AQUIS listed.

Portfolio exposure by sector (%)	£380.1 million
	%
Financials	28.3
Industrials	18.2
Energy	11.5
Consumer Discretionary	10.4
Basic Materials	9.7
Utilities	5.1
Consumer Staples	4.5
Telecomms	3.8
Real Estate	3.7
Health Care	2.5
Technology	2.3
	100.0

Actual income by sector (%)	£16.5 million
	%
Financials	38.2
Basic Materials	17.2
Industrials	14.5
Consumer Discretionary	7.1
Energy	5.1
Consumer Staples	4.0
Utilities	3.5
Telecomms	3.5
Real Estate	2.1
Technology	2.1
Fixed Interest	1.0
Health Care	1.0
Oil & Gas	0.7
	100.0

Source: Thomson Reuters.

NOTICE OF ANNUAL GENERAL MEETING

The eleventh Annual General Meeting of the Company will be held on Tuesday, 18 October 2022 at 11.30 am at the offices of Stephenson Harwood LLP, 1 Finsbury Circus, London EC2M 7SH.  The formal Notice of AGM can be found within the Annual Report.

FURTHER INFORMATION

The Diverse Income Trust Plc’s annual report and accounts for the year ended 31 May 2022 (which includes the notice of meeting for the Company's AGM) will be available today on www.diverseincometrust.com.

It will also be submitted shortly in full unedited text to the Financial Conduct Authority's National Storage Mechanism and will be available for inspection at data.fca.org.uk/#/nsm/nationalstoragemechanism in accordance with DTR 6.3.5(1A) of the Financial Conduct Authority's Disclosure Guidance and Transparency Rules.

ENDS

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on this announcement (or any other website) is incorporated into, or forms part of, this announcement.

LEI: 2138005QFXYHJM551U45