Interim Management Statement

RNS Number : 9760K

British Empire Sec & Gen Tst PLC

25 July 2011

 



BRITISH EMPIRE SECURITIES AND GENERAL TRUST PLC

Interim Management Statement - 3 months ended 30 June 2011

This investment management report relates to performance figures to 30 June 2011.

	Qtr	Financial Yr*	Calendar Yr
BTEM	0.9%	8.5%	2.5%
Benchmark2	1.2%	11.4%	2.5%
MSCI World1	0.6%	13.1%	3.0%

Quarterly Investment Manager's Review

The markets have been unsettled by fears of potential European sovereign defaults.  The fundamental issues have yet to be resolved and thus the potential for further market volatility remains.

With this in mind we have been taking profits in stocks that have performed well and are now on narrow discounts and at risk from suffering from discount widening.  On the purchase side we have been focusing on companies that have lagged the market and remain on very wide discounts.  This has kept the weighted average discount on the overall portfolio towards the higher end of the historic range, which gives an indication of the potential for outperformance over the medium term.   In addition we have held liquidity of around 10% throughout the period and will look to put this to work as we find attractive investments.

Performance
During the Quarter, NAV rose by 0.9%, compared to an increase of 1.2%² for the Benchmark² index.

Discounts³
At the end of June the weighted average discount (excluding liquidity) stood at 32.3% compared to 30.8% at the end of March.  The discount calculation is a measure of how much the share price of each stock in the portfolio is below our estimate of its net asset value.

Activity
We invested into two new holding companies in Asia: Wheelock and Shun Tak, both on wide discounts.  We bought into Canadian listed property company MI Developments, which trades on a discount to the value of its industrial property portfolio and has recently had a change in management.  We also invested into Eurazeo the French listed holding company.

On the sales side we sold out of Lundbergforetagen on a narrow discount and have been reducing Deutsche Wohnen, the German residential property company that is no longer trading on a wide discount.

Financial Performance to 30 June 2011

Statistics

	Value	1 qtr %	1 yr %	3 yr %	5 yr %
Price (£)1	523.5	5.8	27.5	28.5	28.4
Net Asset Value1 (£)	548.2	0.5	22.4	26.7	30.4
Net Asset Value Total Return1		0.9	24.2	33.5	40.6
Benchmark1		1.2	24.2	21.5	34.9

Annual Returns (%)	2010	2009	2008	2007	2006
Price1	18.5	27.9	-22.3	-2.8	0.3
MSCI World1	15.9	16.5	-17.4	7.7	5.8

1 Source: Morningstar. Share price total return is on a mid-to-mid basis, with net income re-invested.
2 Morningstar Global Growth Index official Benchmark from 1 October 2008
3 Discounts are AVI estimates

Top Ten Equity Holdings                                                %

Vivendi	7.74
Orkla	6.30
Jardine Strategic	5.84
GBL	5.31
Investor	5.11
Jardine Matheson	4.61
Sofina	4.28
Aker	2.98
Deutsche Wohnen	2.68
CIR	2.26

Geographic Breakdown (% of total assets)      

	31/03/11	30/06/11
EMEA	3.13%	2.84%
Continental Europe	53.37%	49.71%
Japan	3.83%	3.04%
Canada / US	6.48%	8.96%
Asia Pacific	14.70%	18.57%
UK	4.58%	5.11%
Liquidity ~	13.87%	11.78%

~ Liquidity is held primarily in UK and US Government Securities

Sector Breakdown (% of invested assets)

	31/03/11	30/06/11
Closed-End Funds	4.40%	5.70%
Investment Holding Companies	61.76%	62.70%
Open-End Funds	0.89%	0.00%
Property	6.14%	6.74%
Resources & Mining	13.12%	14.22%
Other	13.71%	10.71%

Major Mover

Largest Risers	Percent change	Percent of Assets
Jardine Matheson	28.74%	4.61%
Deutsche Wohnen	17.88%	2.68%

Largest Fallers	Percent change	Percent of Assets
Is Gayrimenkul Yatirim Ortak	-28.90%	0.74%
Promotora de Informaciones SA (Prisa)	-21.60%	1.75%

Further Information Investment Manager - John Pennink, AVI Ltd. [phone]       [e-mail] The share price can be found under 'INVESTMENT COMPANIES' in The Financial Times, The Times, The Daily Telegraph, The Scotsman and The Evening Standard. *British Empire Securities and General Trust financial year commences on the 1st of October. ** Last audited figure updated annually # Book Values Information may be found on the following websites. www.british-empire.co.uk or www.assetvalueinvestors.com The content of the Company's web-pages and the content of any website or pages which may be accessed through hyperlinks on the Company's web-pages, other than the content of this Interim Management Statement, is neither incorporated into nor forms part of the above announcement.

Risk Factors you should consider before investing Investment in the British Empire Securities and General Trust plc (the "Trust") carries risks, which are more fully described in the Key Features Document.  Listed below are some of the key risks: Investors are reminded that past performance is not a guide to future performance and that their capital will be at risk and they may therefore lose some or all of the amounts that they choose to invest in the Trust. The Trust utilises gearing techniques (leverage) which exaggerate market movements both down and up and which could mean sudden and large falls in market value. Movements in exchange rates can impact both the level of income received and the capital value of your investment.  If the currency of your residence strengthens against the currency in which the underlying investments of the fund are made, the value of your investment will reduce and vice versa. As with all stock exchange investments the value of investment trust shares will immediately fall by the difference between the buying and selling prices. Where investments are made in emerging market, unquoted securities or smaller companies, their potential volatility may increase the risk to the value of, and the income from the investment. British Empire Securities and General Trust plc, Springfield Lodge, Colchester Road, Chelmsford, Essex CM2 5PW.  Registered in England & Wales No: 28203

All figures as at the period under review unless otherwise stated.  All sources Asset Value Investors Ltd unless otherwise stated.  Asset Value Investors Limited ("AVI") is authorised and regulated by the Financial Services Authority ("FSA").  This document does not constitute an offer to buy or sell shares in the British Empire Securities and General Trust plc (the "Trust").  The contents of this message are not intended to constitute, and should not be construed as, investment advice. Potential investors in the Trust should seek their own independent financial advice.  AVI neither provides investment advice to, nor receives and transmits orders from, investors in the Trust nor does it carry on any other activities with or for such investors that constitute "MiFID or equivalent third country business" for the purposes of the FSA's rules.

 

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