Seneca Global Income Growth (LON:SIGT) aims to generate income and long-term capital growth across multiple asset classes with low volatility. The trust adopts a long-term strategic asset allocation to equities (60%, split 35% to UK and 25% to overseas – with modest U.S. exposure), fixed income (15%) and specialist assets (25%, generally yielding 5-8%). Shorter-term tactical asset allocations are made with a view to enhancing portfolio returns.
For UK equity exposure, SIGT focuses on mid-cap companies, which over time tend to outperform the broader market. SIGT retains zero exposure to developed market government bonds, which the manager considers expensive. Following the change in mandate in 2012, SIGT’s NAV total return has outperformed the FTSE All-Share index, with significantly lower volatility; while dividends and reserves have grown every year.
Investment strategy: Multiple income streams
SIGT employs a clearly-defined, research-driven process aiming to find value across a range of asset classes – investment in UK equities is direct, while investment in other areas is primarily via funds. At Seneca Investment Managers (SIM) there is a team of five managers, who all contribute investment ideas; each is assigned responsibility for one of the five areas in which SIM makes active decisions: tactical asset allocation, UK equities, overseas equities, fixed income and specialist assets. Gearing of up to 25% of net assets is permitted.
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