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Dunedin Income Growth Investment Trust PLC

 

Objective

The objective of Dunedin Income Growth Investment Trust PLC is to achieve growth of income and capital from a portfolio invested predominantly in companies listed or quoted in the United Kingdom.

Manager's Monthly Report

June 2009


Equity markets continued to rally in May, aided by not so much green shoots of recovery, but rather that the worst of the de-stocking impact was behind us. China and Brazil both provided stronger than expected economic data, and this helped fuel risk appetite across global markets. In the UK, the FTSE All-Share Index rose by 4.2% in total return terms. As risk appetite increased, it was the cyclical elements of the market that fared best, with strong performances from the Banks, Mining and Basic Material sectors. Commodity prices continued to rise, and with it, there has been a sharp pick up in inflationary expectations, perhaps not surprising given the scale of the stimulus packages from Western governments. The sectors which lagged the recovery tended to be those less exposed to global growth, including General Retailers, Telecoms and Real Estate. In terms of size impacts, the strength of the Mining sector saw the FTSE 100 Index outperform the FTSE 250 and SmallCap Indices. Economic news flow showed economies continuing to contract, albeit the data was no worse than expected. US unemployment rose to 8.9%, while Eurozone GDP fell by 2.5% in Q109, prompting the ECB to cut rates by 25bps to 1%. In the UK, the quantitative easing programme was extended, and despite this, gilt yields continued to push out, primarily in response to the perceived forthcoming issuance. It was a quiet month for activity, adding to positions in HSBC, National Grid, Rolls-Royce and Provident Financial, all trading at attractive valuations with sound business models, and which had been left behind in the market rally. We were net sellers in the month, trimming a number of areas including those more cyclically exposed stocks including Tomkins, which had rallied strongly.


Source: Monthly Factsheet Aberdeen Asset Managers Limited