TIDMSCF
Schroder Income Growth Fund PLC
27 October 2023
Schroder Income Growth (SCF)
27/10/2023
Results analysis from Kepler Trust Intelligence
Schroder Income and Growth (SCF) has published results for the
full year period ending 31/08/2023. Over this period, the trust saw
NAV total returns of 4.2% and a share price total return of -3.0%,
which compares to 5.2% total return from the FTSE All-Share Index.
NAV total returns remain comfortably ahead of the index since Sue
Noffke took over management in 2011, with the trust delivering
128.5% compared to 103.5% for the benchmark.
The board has also increased the dividend for the 28th year
running, 13.2p to 13.8p per share, an increase of 4.6%. The
increase came despite a fall in the total income received from the
portfolio, as the trust utilised its revenue reserves to help
fulfil its primary objective of real growth of income above the
levels of inflation over the longer term.
Kepler View
SCF focuses on generating real growth, in both the income and
capital over the long run. So, while short term performance may be
a little disappointing during a tough period for the small and
mid-caps which the trust is usually overweight, its long-term
performance remains very strong, outperforming the benchmark by
roughly 25%, since 2011, when Sue Noffke took over management.
Despite being out of favour over the short term, we think exposure
to medium and small companies should help deliver income and
capital growth over time.
The long-term outperformance has been driven by astute stock
selection in the UK medium and small cap space, but is also down to
the way Sue and her team focus on exploiting market inefficiencies
through companies they believe boast strong fundamentals that the
market has failed to value appropriately. The diversity of the
characteristics associated with different stocks, be that income
generation or low correlation against inflation, means the
underlying portfolio is designed to benefit from multiple forms of
returns in a cycle and to perform in a variety of market
environments.
Over the period, SCF benefited from strong performance from
Whitbread, Hollywood Bowl and Pets at Home, and not owning a number
of staples companies such as Diageo or Imperial Brands. The
underperformance against the benchmark came primarily from the
omission of some strongly performing industrial names, and its
larger weighting to basic material companies compared to the index.
While a larger allocation to medium and smaller sized companies has
helped SCF's performance historically, returns have lagged those of
the larger FTSE 100 more recently, which hurt performance.
We think that Sue and the team's high-conviction approach to
running the portfolio has rewarded investors well over various time
horizons and is an attractive proposition for income investors
looking for real growth in income and capital over the long term.
We also think that UK equity valuations are very cheap versus its
history and other equity markets, so the propensity for equities to
return to long-term average valuations, or 'mean reversion', could,
in conjunction with SCF's wide discount, present an opportunity for
long-term patient investors.
CLICK HERE TO READ THE FULL REPORT
Visit Kepler Trust Intelligence for more high quality
independent investment trust research.
Important information
This report has been issued by Kepler Partners LLP. The analyst
who has prepared this report is aware that Kepler Partners LLP has
a relationship with the company covered in this report and/or a
conflict of interest which may impair the objectivity of the
research.
Past performance is not a reliable indicator of future results.
The value of investments can fall as well as rise and you may get
back less than you invested when you decide to sell your
investments. It is strongly recommended that if you are a private
investor independent financial advice should be taken before making
any investment or financial decision.
Kepler Partners is not authorised to make recommendations to
retail clients. This report has been issued by Kepler Partners LLP,
is based on factual information only, is solely for information
purposes only and any views contained in it must not be construed
as investment or tax advice or a recommendation to buy, sell or
take any action in relation to any investment.
The information provided on this website is not intended for
distribution to, or use by, any person or entity in any
jurisdiction or country where such distribution or use would be
contrary to law or regulation or which would subject Kepler
Partners LLP to any registration requirement within such
jurisdiction or country. In particular, this website is exclusively
for non-US Persons. Persons who access this information are
required to inform themselves and to comply with any such
restrictions.
The information contained in this website is not intended to
constitute, and should not be construed as, investment advice. No
representation or warranty, express or implied, is given by any
person as to the accuracy or completeness of the information and no
responsibility or liability is accepted for the accuracy or
sufficiency of any of the information, for any errors, omissions or
misstatements, negligent or otherwise. Any views and opinions,
whilst given in good faith, are subject to change without
notice.
This is not an official confirmation of terms and is not a
recommendation, offer or solicitation to buy or sell or take any
action in relation to any investment mentioned herein. Any prices
or quotations contained herein are indicative only.
Kepler Partners LLP (including its partners, employees and
representatives) or a connected person may have positions in or
options on the securities detailed in this report, and may buy,
sell or offer to purchase or sell such securities from time to
time, but will at all times be subject to restrictions imposed by
the firm's internal rules. A copy of the firm's Conflict of
Interest policy is available on request.
PLEASE SEE ALSO OUR TERMS AND CONDITIONS
Kepler Partners LLP is authorised and regulated by the Financial
Conduct Authority (FRN 480590), registered in England and Wales at
70 Conduit Street, London W1S 2GF with registered number
OC334771.
This information is provided by Reach, the non-regulatory press
release distribution service of RNS, part of the London Stock
Exchange. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
NRAGCBDGDUDDGXR
(END) Dow Jones Newswires
October 27, 2023 05:55 ET (09:55 GMT)
Schroder Income Growth (LSE:SCF)
Historical Stock Chart
From May 2024 to Jun 2024
Schroder Income Growth (LSE:SCF)
Historical Stock Chart
From Jun 2023 to Jun 2024