Interim Management Statement

RNS Number : 6709F

Aurora Investment Trust PLC

15 January 2010

 



AURORA INVESTMENT TRUST Plc

Interim Management Statement 31st December 2009

Directors:

Alex Hammond-Chambers (Chairman); James Barstow FCA, 

Richard Robinson

Fund Manager:

James Barstow of Mars Asset Management Ltd

Year End:    28th February

Dividend:     Final only. Latest dividend 3.25p plus Special dividend   Payment 16th July 2009

Benchmark: All-Share Index

Objective: 

Capital Appreciation through investments listed mainly on the London Stock Exchange.

Policy (Summary)

To invest primarily in equities but with some exposure also to Fixed Interest. In general the portfolio will be weighted towards the larger rather than smaller capitalised stocks. A distinctive feature is an emphasis on investments in companies with exposure to economies growing at a faster rate than the UK.

Largest Holdings    31st December 2009

	£ 000's	%
ASIAN CITRUS	2520	9.0
WEST CHINA CEMENT	2082	7.4
BTG	1979	7.0
KAZAKHMYS	1460	5.2
XSTRATA	1401	5.0
BP	1350	4.8
PRUDENTIAL	1269	4.5
ANTOFAGASTA	1240	4.4
GCM	1178	4.2
STANDARDCHARTERED	1170	4.2
	Total	55.7%

Sector Analysis

	Aurora %
Oil & Gas	12.9
Industrials	9.8
Consumer Goods	10.0
Health Care	7.0
Consumer Services	2.8
Telecommunications	1.5
Information Technology	2.4
Financials	20.2
Resources (mining)	28.0
Utilities	-
Fixed Interest	5.4

Performance

	NAV(ex-income)	FTSE All-Share
Since Launch to 31/12/09	+88.3%	+27.6%
5 years to 31/12/09	-4.1	+14.1
3 years to 31/12/09	-22.4	-14.6
1 year to 31/12/09	+52.5	+24.5
4 months to 31/12/09	+14.9	+9.1

	31/08/09	31/12/09
Share price	140.0p	163.0p
Discount	12.7 %	11.5%

Review

The four month period under review witnessed a continuation of the strong rebound in the UK stock-market, which had commenced in early March. The favourable background of the strong global economic recovery which was occurring proved the catalyst for all major stock-markets to rise, aided by the growing certainty that interest rates are likely to remain low for a protracted period amongst the nations in the West. The UK stock-market proved no exception, despite the fact that the UK economy is lagging the rest of the world in recovering from recession.

In this light, it was not surprising that the best performing sectors during the period were not the UK domestic stocks, of either a defensive or cyclical nature, but the overseas earners. The portfolio remains heavily exposed to the superior rate of growth taking place in Asia and other emerging economies- a feature which the manager considers will continue for several years.

The trend of out-performance by the company's portfolio relative to its benchmark, which commenced at the start of 2009, continued during the period under review. The net asset value per share increased by 14.9% from 160.26p to 184.15p, by comparison with the rise in the FT All-share index, which rose by 9.1%. Furthermore a slight contraction in the discount occurred.

Outlook

Although to date there are no visible signs of any recovery in employment numbers amongst Western nations, a strong recovery is currently taking place in the US, even without the rebuilding of inventories. The December figures - an expansion of Chinese exports by 17% - are the most obvious manifestation of that recovery.

Recent utterances from the Federal Reserve Board have intimated strongly that interest rates will stay low for a considerable period and that, although there has been a modest change of stance towards monetary policy, there will be no dramatic tightening in the near future. In this light the US markets are likely to continue to make further upward progress; its extent will depend on the outcome of corporate financial results in turn reflecting the productivity gains achieved.

The UK economy is set to experience a lacklustre recovery held back, not only by the heavily indebted nature of both the consumer and the government, but also by the strong probability of corporate indecision in the run up to the forthcoming general election in the late spring. Fortunately, the UK's FTSE100 index is heavily oriented to earnings from overseas. 

In view of the relatively low valuation, some growth in earnings and a recovery in confidence by investors who will continue to invest in equities while interest rates remain low, the prospects for a positive return from the portfolio over the coming months appear favourable.

15 January 2010

 

END

 

 

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