Edison issues review on The Diverse Income Trust

RNS Number : 6460N

Diverse Income Trust PLC (The)

21 May 2020

 

London, UK, 21 May 2020

Edison issues review on The Diverse Income Trust (DIVI)

The Diverse Income Trust (DIVI) aims to provide shareholders with an attractive income, as well as capital growth, over the long term through a bottom-up approach to investing in UK equities across the market capitalisation spectrum. This gives the manager a wider opportunity set from which to pick stocks and dial down portfolio risk. DIVI has also profited from put options that boosted cash levels when the market was extremely weak. Although DIVI's income may decline in the short term, as many UK companies have recently cut their dividends, the board has recently maintained the third interim dividend, which suggests it expects this to be a transitory feature for the trust.

DIVI trades at a discount of 8.1% to its cum-income NAV of 19 May 2020, which is well below the three-year average of 2.1%. The board takes a proactive approach to manage this discount to a level close to the trust's NAV, including an annual opportunity to redeem shares at NAV less costs. An improvement in sentiment towards UK equities would give considerable scope for DIVI's NAV to narrow over time. 

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