Thomas Moore, manager of Abrdn Equity Income (AEI), the highest-yielding but worst-performing UK equity income trust, is positioning his stock picks in recovery plays as he looks to pull the portfolio out of its slump in recent years.
Half-year results this week showed the £151m portfolio lagged the FTSE All-Share index considerably over the six months to 31 March, with net asset value (NAV) down 1.6% against a 6.9% total return from the benchmark. The shares fell 8.2%.
At yesterday’s close of 315.5p, the 7%-yielder was left with a total shareholder return including dividends of just 1.5% over five years, way below the 37.8% return of the All-Share. That reflects a savage derating of all UK stocks but particularly the mid-cap and smaller stocks outside the FTSE 100 where the trust is 52% invested.