Edison issues review on the Diverse Income Trust

Diverse Income Trust PLC (The)

04 August 2023

 

London, UK, 4 August 2023

Edison issues review on the Diverse Income Trust (DIVI)

The Diverse Income Trust (DIVI) has two co-managers, Gervais Williams and Martin Turner at Premier Miton, who employ a genuine all-cap UK equity income strategy. DIVI's long-term total returns are a function of its income and above-average income growth and although valuations can vary, over time they become less important as they trade in a range. While the trust's performance has been disappointing over the last two years as stocks have derated and AIM stocks have underperformed, its income profile remains robust; hence, the managers are anticipating an improvement in DIVI's performance. The trust has delivered a rising level of regular annual dividends throughout a range of market conditions.

DIVI's multi-cap income strategy sets the trust apart from its peers; only a third of the fund is invested in large and mid-cap companies. It offers both an attractive yield and an income stream, which tends to grow faster than those of competing funds, suggesting DIVI should also achieve superior capital growth over the longer term. The portfolio's broad stock list of more than 120 companies and below-market beta should ensure that the fund's performance is relatively defensive during periods of stock market volatility. Hence, DIVI could be described as a high alpha, low beta fund. The managers are not constrained by a benchmark, so the trust's sector exposure differs from the UK market, with notable overweight exposures to financials and materials, and below market allocations to healthcare and consumer staples stocks.

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