Diverse Income Trust plc (LON:DIVI) has announced its Factsheet for the month ended 31 May 2024.
Manager Commentary
Currently, global elections are driving geopolitical change. The smooth globalisation decades are being displaced by international friction and a move to build back domestic manufacturing and an increased selfreliance for nations.
We believe these changes will favour companies that generate surplus cash, such as many of the companies in the UK. Alongside, we believe that as global growth becomes patchier, it is likely to favour smaller companies. When we look at both of these factors in the context of the UK’s investment universe, that we believe is currently standing on an exceptionally low valuation (especially smaller companies), we think that these new trends that are emerging could be the start of UK smaller companies experiencing above average growth, that could last for decades.
With all this in mind, we believe it is noteworthy that over recent weeks the UK stock market has broken out of the range it has been trading in for the last 10 years reaching new highs. The nature of breakout carries all the more significance given that it has occurred at a time when local investors are continuing to withdraw capital from the UK to invest overseas. At this stage, the new trend is most apparent within large and medium sized companies, but this is not usual as new trends often take time to work down the market to smaller companies.
Gervais Williams & Martin Turner
31.05.2024
Diverse Income Trust plc 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.
