Meanwhile, the income portfolio delivered NAV total returns of 6.0% and a dividend yield of 3.9% for the year.
Best performers in the growth portfolio in this period were the TR Property Investment Trust, which gained 33%, and Schroder UK Mid Cap Fund which rose by 32%. RCM Technology Trust and Herald Investment Trust, both focused on technology, increased 23%.
In the income portfolio, the Schroder Real Estate Investment Trust returned 31% with a dividend yield of almost 5%. European Assets Trust, Mercantile Investment Trust and Lowland Investment Company – those companies exposed to mid and small caps – delivered 24%, 20% and 20% respectively.
Those holdings which struggled were largely situated in the Asia Pacific region, where sluggish growth in China and weak corporate profits led to poor performance.
Fund manager Peter Hewitt was positive on the growth in the UK but warned that the Eurozone presented a mixed bag.
“The UK should continue to experience robust growth and although there is the likelihood of a change in direction of interest rates, the overall backdrop remains positive. Similarly, the US economy is growing, albeit at a slower pace. Encouragingly, there are indications that this will increase over the balance of the year. The Eurozone remains a mixed bag, however. A return to growth is more likely with even some of the countries worst hit by the financial crisis showing signs of recovery.”
He added that valuations for equities have moved above fair value, but provided overall corporate earnings and dividends grow as anticipated, then that should support further progress in equity markets.
Dividend increased slightly, with the annual dividend for income shares increasing by 4.3% to 4.8p per income share.
