Standard Life Investments

Standard Life Equity Income Trust PLC Fund

Mex ID: ITSLET SEDOL: 0603959 Reuters: SLET.L

Price
413.50
NAV
447.06
Premium/(Discount)
-7.58%
Daily Price Change
0.00p (0.00%)
Change date
20/02/2017

Figures above are updated every business day after the close of trading and those displayed are to the close of the previous business day. Figures are shown in pence (GBP) and the data is provided by, and copyright @2016, FE.

General Trust Information

Objective

The Company's objective is to provide Shareholders with an above average income from their equity investment while also providing real growth in capital and income.

Profile

The Standard Life Equity Income Trust plc will invest mainly in UK equities and may also hold a proportion in fixed interest stocks to supplement income, or to provide stability when the outlook for the UK equity market is less optimistic. Typical holdings will be 50 - 70 stocks with a minimum initial position of 1%.

Fund Manager

Thomas Moore

Thomas Moore

Thomas is an Investment Director within the UK equities team. He began his career in 1998, joining Schroder Investment Management as Assistant Fund Manager, UK Equities. He joined Standard Life Investments in 2002 as an Investment Analyst. He then managed EMEA portfolios before moving to the UK equities team in 2006. His responsibilities include managing the UK Equity Income Unconstrained Fund, an institutional fund, the Standard Life UK Equity Income Trust and analysing the banks and financial services sectors. Thomas began managing the Standard Life Equity Income Trust in November 2011.

Awards

What Investment – Best Investment Trust for Income – Standard Life Equity Income.

NMPI Status

Standard Life Equity Income Trust plc (‘the Company’) currently conducts its affairs so that securities issued by it can be recommended by financial advisers to ordinary retail investors in accordance with the FCA’s rules in relation to non-mainstream investment products and intends to continue to do so for the foreseeable future. The Company’s securities are excluded from the FCA’s restrictions which apply to non-mainstream investment products because they are securities in a UK listed investment trus

Performance

Trust Performance (on a bid to bid basis)

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Past performance is not a guarantee of future returns. The value of investments may go down as well as up and you may receive back less than you invested. Your capital and income is not guaranteed.

Trust Performance & Returns

(on a bid to bid basis)
Fund performance
Sector performance
 Last 1 month*Last 6 months*Last 1 year*Last 3 years*Last 5 years*
Fund performance
Sector performance

Past performance is not a guarantee of future returns. The value of investments may go down as well as up and you may receive back less than you invested. Your capital and income is not guaranteed.

* Values to-

Performance (on a bid to bid basis)

Powered by data from FE

Trust Performance(on a bid to bid basis)

(on a bid to bid basis)
Fund performance
Sector performance
 Last 1 month*Last 6 months*Last 1 year*Last 3 years*Last 5 years*
Fund performance
Sector performance

Past performance is not a guarantee of future returns. The value of investments may go down as well as up and you may receive back less than you invested. Your capital and income is not guaranteed.

* Values to -

** n/a indicates that fund performance information is not available for this period due to the date the fund was launched.

Current details

All prices displayed in p (GBP). Figures below updated at 06:15 pm. Figures are provided by, and copyright @2016, FE on a delayed basis.
EPIC code:SLET
Market sector:IT UK Equity Income
Mid price:413.5000
Bid price:413.5000
Offer:416.7500
Opening price:416.7500
Daily high:416.7500
Daily low:413.5000
Previous day's close:413.5000
Daily change:0.0000 (0.00%)

LSE Announcements

Video

Thomas Moore talks about investment trusts in general, the specifics around the Equity Income Trust he manages and gives a short-term outlook for the UK market.

SL Equity Income Trust

How to Invest

Shares in Standard Life Investments' range of investment trusts are listed on the London Stock Exchange. As with any public quoted company, investment trust shares can be bought and sold on the stock market. This can be done through directly through a platform provider such as Standard Life or via a stockbroker, financial adviser or wealth manager.

We recognise professional financial advice is important before taking any investment decision. We recommend investors seek financial advice before taking any decisions. If you'd like to find an adviser in your area, take a look at www.unbiased.co.uk.

Alternatively, there are a number of platform providers who offer an online ‘execution only’ service, some of these are listed below.

You should note that by clicking any of the above links, you will leave Standard Life Investments' website and go to another website. We are not responsible for the content or accuracy of external websites.

The value of investments and the income from them can go down as well as up and is not guaranteed; an investor may get back less than their original investment.

Insight

Have bond proxies had their time in the sun?

October 2016

Figures above are updated every business day after the close of trading and those displayed are to the close of the previous business day. Figures are shown in pence (GBP) and the data is provided by, and copyright @2016, FE.

Have bond proxies had their time in the sun?

Macro drivers have had a major impact on the UK equity market during 2016. Sector and stock performance has diverged wildly in response to sharp moves in bond yields and currencies. These influences have tended to favour share prices of the UK’s largest stocks as investors chase the beneficiaries of low bond yields and the strong dollar. This has opened up opportunities for investors willing to stay focused on company-specific fundamentals, including smaller and mid-sized stocks. In addition, there are some strong indications that sentiment towards markets may be approaching extreme levels.

Brexit jitters

First, the gap between equity dividend yields and bond yields has widened to record levels since the Brexit vote. This reflects anxiety regarding the reliability of corporate earnings and dividends. Investors are justified to question the dividend sustainability of many stocks whose tight dividend cover makes them increasingly reliant on debt and scrip dividends – but it is wrong to tar all stocks with the same brush. Investors willing to scour the market will find many UK stocks that offer the prospect of sustained dividend growth from a starting point of healthy dividend cover and low debt levels.

Investors should also question the sustainability of low bond yields in the environment of rising inflationary pressures and changing central bank attitudes towards quantitative easing. Indeed, investors seem to be flattering government bonds with the assumption of low solvency risk but punishing UK equities with the assumption of high earnings/dividend risk. This creates opportunities for active investors.

Valuations sharply diverge

Second, UK sector valuations are polarised and poised to snap-back. Macro-driven moves in bond yields and currencies have led to some extreme disparities in sector valuations. The gap between cyclical and defensive valuations is even higher than it was during the financial crisis of 2008-09. Low bond yields have pushed investors into sectors such as consumer staples, which now trade on valuations of around 20x PE with a 2-3% dividend yield, despite pedestrian organic growth rates.

Some investors continue to believe in the ‘greater fool’ theory, relying on being able to sell their overvalued stocks at an even higher valuation in the future. Up to now this approach has worked well, supported by QE. So, what is the trigger for this strategy to backfire?

Let’s get fiscal

In terms of sector performance, we would point to the potential for a shift in focus from monetary to fiscal stimulus as a potential game-changer. In this environment, we would expect cyclicals and financials to outperform, while bond proxy sectors should underperform. Brexit has been a wake-up call to global policymakers as it demonstrated the risk of popular discontent. The shift towards fiscal policy would help politicians to show that they are in touch with the electorate – and potentially drive a rebalancing of the economy and markets.

Monetary stimulus drove down bond yields and therefore led to the outperformance of bond proxies over cyclical and financials. However, we are now seeing increasing evidence of the real world pressure that QE is causing on savers, pension fund deficits, insurance companies, banks, etc. At the same time, central banks’ options are running out as the stock of purchasable government bonds diminishes.

It’s all about fundamentals

The other trigger for a change in sector performance is recognition that underlying corporate fundamentals do not justify either the underperformance of cyclicals and financials or the outperformance of bond proxies. Management commentary of UK domestic companies remains buoyant post-Brexit, supported by solid UK economic data. Initial fears of a sharp drop in activity are looking misplaced. Consumer sentiment remains positive and household cashflows look set to hold up despite the weak pound, as wage growth and lower interest payments offset higher import prices. Against this backdrop, domestic cyclicals and financials therefore look ripe for a recovery.

Opportunities abound

In summary, the UK equity market appears to be at an extreme in terms of macro-driven positioning, creating opportunities for bottom-up investors willing to stay focused on company-specific fundamentals. We continue to use our extensive research resource and Focus on Change investment process to identify companies which we believe have sustainable dividend growth, and where attractive dividend yield is backed by cashflow momentum, dividend cover and balance sheet strength. We remain confident that this approach will deliver superior growth in capital and income over the medium term.

Thomas Moore, Investment Director