Invesco Bond Income Plus Ltd on Thursday said it fell slightly short of its benchmark in the first half of the year, but it still got growth and kept its dividend stable.
The UK investment company, which focuses on bonds and other fixed-interest securities, said its net asset value total return was positive 3.6% for the first half of 2024.
However, Chair Tim Scholefield noted this was ‘modestly below’ the 3.9% total return of the company’s reference index, the ICE BofA European Currency High Yield index.
Invesco Bond Income reported an NAV per share of 168.86p as of June 30, up 0.2% from 168.58p on December 31. The rest of the total return during the period came from dividend payments.
Invesco Bond Income declared an interim dividend of 5.75p per share, unchanged from a year before.
Shares in the company were down 0.1% at 171.27p on Thursday morning in London.
‘Economic growth in the UK, US and Europe was generally better than expected and so it does now appear that the major central banks have succeeded in taming the dramatic surge in inflation - which began in 2021 - without driving economic activity into deep or prolonged recession,’ Scholefield said. ‘This so-called ’soft-landing’ is an important achievement to date and goes some way to explain why high yield markets continued to make steady progress during the first six months of the year.’
Looking ahead, Scholefield commented: ‘It is estimated that over half the world’s population will vote in elections during the year...In the UK, the new Labour government emphasised economic stability as its key priority during its first weeks in office.
‘Across the Atlantic, the attempted assassination of [Donald] Trump in July served as a stark reminder of the elevated nature of political uncertainty as we approach November’s US presidential election.’
Nonetheless, Scholefield added: ‘On balance the inflation outlook is encouraging and there are good reasons for expecting the next six months to see further interest rate reductions here in the UK and for the first rate cuts in the US to materialise.
‘The prospect of easier monetary conditions and hopefully modest GDP growth should provide a supportive backdrop for high yield markets during the remainder of the year.’
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