Diverse Income Trust plc (LON:DIVI) has provided its Factsheet for the month ended 31 August 2023:
Manager Commentary
We believe 2023 has been defined by an ongoing stream of sales of UK Open Ended Investment Companies (OEIC). Whilst this has been an ongoing feature for the last two years, it is noteworthy in
our view, that the share prices of larger UK quoted companies have been more resilient than might
have been expected. We ascribe this feature to international investors, which appear to be marginally increasing their weightings to global equity income companies, which includes many UK quoted companies. So, whilst the share prices of larger UK quoted companies would normally drift
down on voluminous local selling, to date this has been offset by international buyers.
Unfortunately, there is different pattern within AIMlisted (Alternative Investment Market) UK equity
income companies. These kinds of companies are not of interest to international investors, so the
ongoing UK OEIC sales have been marked with their share prices declining even further. All this is unhelpful given the speed and scale of interest rate increases over recent quarters. Raising interest rates tends to have a depressing effect on economic activity after a time lag. Therefore, the longer that US or UK interest rates remain elevated, the greater the risk that they do precipitate an economic setback eventually.
The Diverse Income Trust invests primarily in quoted or traded UK companies with a wide range of market capitalisations, but a long-term bias toward small and medium sized companies.
