Edison reviews Aberdeen Standard Equity Inc Trst
London, UK, 7 February 2019
Edison issues review on Aberdeen Standard Equity Income Trust (ASEI)
Aberdeen Standard Equity Income Trust (ASEI, formerly Standard Life Equity Income Trust [SLET]) has been managed by Thomas Moore since November 2011. He is bullish on the long-term outlook for the trust as the yield on the portfolio is the highest since the end of the global financial crisis in 2009, suggesting UK share prices are discounting a recession or another global crisis. The manager says that ASEI's holdings - chosen from across the market cap spectrum - can be classified in one of three 'buckets': global yield (c 40% of the portfolio), domestic opportunities (c 30%) and uncorrelated value (c 30%), and he is finding good opportunities in all three. The trust's revenue was higher than projected in FY18, leading to an annual dividend increase of 12.3%, which was much higher than the 7.5% compound annual growth rate over the last five years.
ASEI's current 3.5% share price discount to cum-income NAV compares with the range of a 2.4% premium to a 5.9% discount over the last 12 months. Its average discounts over the last one, three, five and 10 years are 1.1%, 3.3%, 2.6% and 3.6% respectively. The trust has a progressive dividend policy and its annual distribution has increased in each of the last 18 consecutive years. Based on its current share price, ASEI offers a 4.6% dividend yield, which is above the majority of its peers in the AIC UK Equity Income sector.
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