Monthly Report
Deutsche Equity Income Trust PLC
11 April 2002
Deutsche Equity Income Trust
REPORT FOR THE MONTH OF MARCH 2002
MARKET BACKGROUND
The UK equity market as measured by the FTSE All-Share index rose by 3.7% in
capital terms over the month. Our net asset value per share fell rose by 5.1%,
partially helped by the increase in the value of the holding in Railtrack plc
from zero to a provisional price of 200p per share. The share price rose by a
more modest 4.4% over the same period as the discount to net asset value widened
from 5.9% to 6.6%.
Conditions were once again generally favourable for equity income funds as the
FTSE 350 Higher Yield index outperformed the FTSE 350 Lower Yield index by 4.0%
in capital terms, continuing the trend since the end of last year. Both the FTSE
250 and the FTSE Small Cap indices (which rose by 5.9% and 3.6% respectively in
capital terms) outperformed the FTSE 100 index (which rose by just 3.4%). The
best performing sectors over the month were the 'cyclical' areas of Engineering
& Machinery, Electronic & Electrical Equipment and Media & Photography. The
worst performing sectors were the 'defensive' areas of Food & Drug Retailers and
Pharmaceuticals.
Our purchases included buying new holdings in Debenhams, Meggitt and Rank Group.
Holdings were sold in Gallaher Group, Stanley Leisure, Ultraframe and Northern
Foods following recent strong outperformance.
OUTLOOK
Despite continuing concerns about an escalation in the ongoing conflict in the
Middle East, we continue to believe that the longer-term outlook for the UK
equity market remains positive due to a favourable valuation relative to bonds
and signs of an improvement in economic activity. Our balanced approach to
portfolio construction and philosophy of picking the most attractive stocks in
each sector remains unchanged.
31/03/02 28/02/02
NET ASSET VALUE 254.2p 241.8p
MID-MARKET SHARE PRICE 31/03/02 28/02/02
Ordinary Shares 237.5p 227.5p
Dividend Yield (%) 3.2 3.3
LARGEST HOLDINGS (market value £62.8 million equal to 63.1% of total portfolio)
£'000's % of portfolio
GlaxoSmithKline 7,735 7.8
BP 7,671 7.7
HSBC Holdings 5,002 5.0
AstraZeneca 4,708 4.7
Royal Bank of Scotland 4,297 4.3
Vodafone Group 2,573 2.6
Shell Transport & Trading 2,365 2.4
Barclays 2,348 2.4
Lloyds TSB 2,169 2.2
Forth Ports 2,059 2.1
Diageo 2,058 2.1
BT Group 1,989 2.0
Legal & General 1,988 2.0
Centrica 1,896 1.9
Scottish & Southern Energy 1,495 1.5
HBOS 1,487 1.5
Enterprise Oil 1,420 1.4
Morrison(W)Supermarket 1,335 1.3
Canary Wharf Group 1,321 1.3
3i Group 1,274 1.3
BG Group 1,185 1.2
Bunzl 1,145 1.2
EMAP 1,137 1.1
CGNU 1,100 1.1
Senior 1,020 1.0
FINANCIAL CALENDAR
Company Half-year end 31 March 2002
For further information, contact Graham Ashby at Deutsche Asset Management on
020-7545-6000.
For additional copies, changes of address or details of our Private Investors'
Plan, low cost ISA and Dividend Reinvestment Scheme (a recently established
scheme through which shareholders, who hold their shares on the Company's main
register, can use their dividends to purchase further shares) contact Mark Pope
on 020-7545-0520, e-mail address: mark.pope@db.com. Further details of Deutsche
Equity Income Trust including the latest annual, interim and monthly reports can
be found on the Deutsche Asset Management website located at www.deam-uk.com/uk/
invest/.
Issued by Deutsche Equity Income Trust PLC and approved by Deutsche Investment
Trust Managers Limited, regulated by the Financial Services Authority and
manager of Deutsche Equity Income Trust PLC. Investors should be aware that past
performance is not necessarily a guide to future returns, values can fall as
well as rise and investors may not get back the amount they invested.
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