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The Company currently conducts its affairs so that securities issued by Shires Income PLC can be recommended by financial advisers to ordinary retail investors in accordance with the FCA’s rules in relation to non-mainstream pooled investment products (NMPIs) 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 an investment trust.
The Alternative Investment Fund Manager Directive (“AIFMD”) requires Aberdeen Fund Managers Limited, as the alternative investment fund manager of Shires Income PLC, to make available to investors certain information prior to such investors’ investment in the Company.
The AIFMD is intended to offer increased protection to investors in investment products that do not fall under the existing European Union regime for regulation of investment products known as “UCITS”.
The value of investments and the income from them may go down as well as up and investors may get back less than the amount invested. The tax benefits relating to ISA investments may not be maintained. Please refer to the Key Facts documents contained in the ISA/Share Plan Brochure & Application form for general and specific investment risks attaching to the individual trusts.Read the detailed Risk Warning
Past performance is not a guide to future results.
See latest monthly factsheet below for performance history.
At close 25-Jul-2014Ord
|Net Dividend Yield||4.74%|
Source: Morningstar, NAV = Net Asset Value, excluding income.
Bow Bells House
One Bread Street
Registered in England as an Investment Company Number 386561
To provide for shareholders a high level of income, together with growth of both income and capital from a portfolio of investments substantially invested in UK Equities
In this webcast, Ed Beal gives an update on a wide range of subjects including performance, a sector breakdown, the twenty largest investments and an outlook for the Trust.
Markets declined over the month, with the FTSE All-Share Index falling by 1.3% on a total return basis. Economic news flow was quite good. In the US the labour market continued to improve and expectations are that the second quarter GDP reading will be materially more positive than the disappointing outcome in Q1. PMI readings suggest that China is back in expansionary territory and they have re-affirmed their target of 7.5% growth for the year. In the UK the recovery is ongoing; growth continues to lead the developed markets, unemployment is declining, and full time jobs are increasing. The Financial Policy Committee, part of the Bank of England, has put pre-emptive measures in place to help manage house price inflation. These include an affordability test based on a potential increase in interest rates and a loan to income cap.
The performance from Europe has been less positive, though it is notable that many peripheral economies are now performing better than some of the core ones. That said the ECB is worried about the low levels of growth and the potential for deflation and have therefore cut interest rates to their lowest ever level, including negative deposit rates. They have also made it clear that they are prepared to countenance some form of quantitative easing to stimulate lending growth.
In the portfolio we top-sliced the holding in Associated British Foods. The shares have performed extremely well, driven by the success of Primark.
The outlook is much as it has been since the start of the year. Equities are neither obviously cheap nor expensive. However, the gains over the past two or three years have been in large part a function of an expansion in valuation multiples. From a fundamental perspective it seems unlikely that this will continue indefinitely. Therefore a pickup in earnings growth should be a prerequisite of further progression. However, there are technical factors that could push markets higher as investors find themselves with little choice but to put money into equities.
The strength of sterling is constraining earnings growth for many businesses, although one positive is that it is also serving to limit the impact of inflation on costs. Interest rates are expected to increase in the foreseeable future, although Mark Carney has made it plain that in his view they will rise slowly and that the peak of this interest rate cycle will be below historic norms. Companies in general have strong balance sheets, which provide them with flexibility. Rolls-Royce demonstrated this during the month when they announced a well-received £1bn share buyback.
We remain of the view that investing in good quality companies with sound balance sheets will deliver attractive returns for investors with a long term horizon.