Report to July 2001
Deutsche Equity Income Trust PLC
10 August 2001
Deutsche Equity Income Trust
Investment trusts
the easy way to invest on the stock market
REPORT FOR THE MONTH OF JULY 2001
MARKET BACKGROUND
The UK equity market as measured by the FT-SE All-Share index fell by 2.4% in
capital terms over the month. Our net asset value per share fell by 1.5%, but
the share price fell by 8.1% over the same period as the shares moved from a
1.3% premium to a 5.5% discount to net asset value.
Conditions were generally less favourable for income funds as the FT-SE 350
Value index underperformed the FT-SE 350 Growth index by 0.5% in capital
terms. However, the performance by sector was varied, with some 'cyclical'
areas such as Forestry & Paper and Automobiles performing well but the 'new
economy' sectors of IT Hardware and Software performing poorly. The
Electronic & Electrical Equipment sector also fell sharply due to a profits
warning from Invensys.
Our purchases included topping up existing holdings with attractive yields,
such as National Grid and Lonmin, and buying new holdings in some growth
stocks, such as Schroders and Man Group. Holdings were sold in Inchcape,
Northern Foods, Innogy and Rentokil, and significantly reduced in both Rexam
and Scottish Power.
OUTLOOK
Despite attempts by the monetary authorities to stimulate the global economy
by further cuts in interest rates, the immediate outlook for corporate news
flow continues to be poor. However, we continue to believe that the UK equity
market should ultimately respond positively to falling interest rates and
continued low inflation.
NET ASSET VALUE 31/07/01 30/06/01
257.7p 261.6p
MID-MARKET SHARE PRICE 31/07/01 30/06/01
Ordinary Shares 243.5p 265.0p
Dividend Yield (%) 3.0 2.8
LARGEST HOLDINGS (market value £65.7 million equal to 63.9% of total
portfolio)
% of
£'000's portfolio
GlaxoSmithKline 9,690 9.4
BP Amoco 6,377 6.2
HSBC Holdings 4,195 4.1
Shell Transport & Trading 3,812 3.7
AstraZeneca 3,192 3.1
Royal Bank of Scotland 3,170 3.1
British Telecom 3,114 3.0
Vodafone Group 3,043 3.0
Lloyds TSB 2,884 2.8
Legal & General 2,578 2.5
CGNU 2,378 2.3
Cookson Group 1,996 2.0
EMAP 1,961 1.9
BG Group 1,658 1.6
Bunzl 1,615 1.6
Diageo 1,614 1.6
Centrica 1,608 1.6
Carlton Communications 1,591 1.5
Lonmin 1,355 1.3
Powergen 1,342 1.3
Barclays 1,324 1.3
United Utilities 1,316 1.3
Bank of Scotland 1,313 1.3
3i Group 1,287 1.2
BAE Systems 1,286 1.2
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 Investment Management Regulatory
Organisation 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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