Merrill Lynch UK Inv Tst PLC
15 April 2002
MONTHLY PERFORMANCE
MERRILL LYNCH UK INVESTMENT TRUST plc
All information is at 28 March 2002 and unaudited.
Performance at month end with net income reinvested
One Three One Three Five
month months year years years
Net asset value 4.0% 0.1% -10.7% -19.6% 14.7%
Share price 3.2% -5.0% -17.3% -31.3% 4.2%
FTSE All-Share Index 4.2% 2.3% -3.2% -5.0% 38.6%
Sources: Merrill Lynch Investment Managers, Standard & Poor's Micropal
At month end
Net asset value* 910.87p
Share price: 774.00p
Discount: 15.0%
Total assets: £161.4m
Net Yield: 3.9%
Gearing: 32.4%
Effective gearing: 18.5%
Value of debt: £39.5m
Ordinary shares in issue: 13,493,799
*Includes current year net revenue.
UK Sectors % Total Assets
Financials 24.5
Non-Cyclical Consumer Goods 18.9
Cyclical Services 16.1
Resources 12.8
Non-Cyclical Services 9.6
Basic Industries 2.4
General Industrials 2.3
Information Technology 2.1
Utilities 0.8
Cash 11.5
Net current liabilities (1.0)
Total 100.0
Ten Largest Equity Investments
Company
% Investments
BP Amoco 9.0
AstraZeneca 5.4
Vodafone 5.0
GlaxoSmithKline 4.9
Barclays 4.7
HBOS 4.5
HSBC 4.3
Royal Bank of Scotland 4.1
Amersham 3.5
Diageo 3.4
Total 48.8
Market commentary
UK Stockmarket Review
UK shares finished the quarter strongly to erase the losses sustained in January
and February. The FTSE All Share produced a total return of 4.2% in March, while
smaller companies slightly outperformed, ending 4.6% higher.
UK shares rose on strong performances by resources, basic industries and
cyclical services (particularly media) as investors positioned themselves in
expectation of an economic recovery and stronger commodity prices.
Some defensive areas, such as tobacco and beverages, were able to shrug off the
move into cyclicals, contributing meaningfully to the markets positive return.
Telecoms sold off further however, as investors questioned revenue growth
expectations being attributed to new services to mobile users.
Fund performance review
The Company's Net Asset Value (NAV) performed broadly in line with the FTSE All
Share Index over the month, rising by 4.0%. The Trust's tilt towards cyclicals
out of defensives was positive for relative returns, whilst its underweight
stance in financials had an adverse impact.
Performance was aided by our emphasis on construction companies and cyclical
services shares, such as general retailers (Next) and media (BSkyB). These
shares outperformed as investors became more positive towards the prospects for
economic recovery. Our favour for packaging firm, Rexam, also aided returns.
This share has benefited from restructuring and we believe that it is
well-positioned in its industry.
The rotation out of several typically-defensive industries played to the Trust's
positioning, being relatively lightly represented in pharmaceuticals and almost
zero-weighted in utilities as it is. While performance benefited from our
underweight stance in pharmaceuticals, it was also enhanced by our long-term
favour for healthcare company, Amersham.
Telecoms remained under pressure and we benefited from our long held underweight
stance in Vodafone. In contrast, insurance shares rallied, having suffered in
the face of uncertainty regarding the extent of likely claims for much of the
first quarter. Our holding in Royal & Sun Alliance benefited performance.
Outlook
Our confidence in the prospect of global economic recovery has further
increased. In the US, sentiment has recovered strongly in the manufacturing and
service sectors, while new orders have rebounded sharply from their September
lows. The UK economy remains stable; real economic growth in 2001 experienced a
mild decline, barely below its long run trend, supported by buoyant consumer
spending and a more expansionary fiscal policy. We expect a similar growth rate
for 2002. Consumer spending may slow a little but should be supported by
historically low unemployment and interest rates.
Latest information is available by typing www.mlim.co.uk/its on the internet,
'MLIMINDEX' on Reuters, 'MLIM' on Bloomberg or '8800' on Topic 3 (ICV terminal).
11 April 2002
This information is provided by RNS
The company news service from the London Stock Exchange
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