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Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
European Assets sticks to dividend after quality shift

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Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
Small and mid cap European equity investment trust European Assets (EAT) has stuck to its generous dividend payout after shifting to quality names which were heavily sold in the market correction earlier this year.
In its half yearly results, the trust’s board committed to paying a fourth interim dividend of 1.755p per share in October, sticking to its policy of annual payouts totalling 6% of net asset value (NAV) at the end of the last year.
On the basis of the October payout, the trust is set for a dividend yield of 6.9%, nearly three times more than the second highest paying trust in its sector, TR European Growth (TRG), which yields 2.4%.
The trust’s total return during the six months to 30 June was -3.5%, in line with its EMIX Smaller European Companies (ex UK) benchmark, which also fell by -3.5%. With the share price discount to net asset value increasing to 10.6% at the period end in comparison to 5.2% at 31 December 2019, the share price return for the period was -8.6%.
Manager Sam Cosh conceded it had been a ‘challenging period’ but added that ‘from an investment point of view it has been productive’, having used the coronavirus crash in March to invest in quality names.
Many of these stocks had been kept out of the portfolio for years due to ‘challenging valuations’, which Cosh said were amplified by low interest rates and the stocks’ ‘abundant liquidity’.
‘The market fall provided a rare opportunity to invest in some great businesses at exceptionally attractive prices,’ he added.
Stocks which were added to the portfolio included Swedish stock market darling Avanza, the country’s largest stockbroker. After hitting a low of 68.90 SEK in March, it has more than doubled to change hands at around 163 SEK.
Other new names added which contributed to performance included German-listed meal kit provider HelloFresh, which has enjoyed a steady rise over the past year and since dropping to €18.46 on 13 March now trades at around €46.50, equating to a historic price to earnings ratio of a whopping 100.8 times according to Google Finance.
Cognac and Cointreau liqueur maker Remy Cointreau was also added in the selloff, with its share price rising over 58% since March as lockdown drinking boosted its outlook for the year.
Other names in the portfolio which performed well over the ‘entirety of the period’ were German housing portal Scout24, online food delivery firm Just Eat Takeaway (JET), and Dutch semiconductor manufacturer ASM International.
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell.
Shares is provided for your general information and use and is not a personal recommendation to invest. It is not intended to be relied upon by you in making or not making any investment decisions. The investments referred to in these articles will not be suitable for all investors. If in doubt please seek appropriate independent financial advice.
Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.
The value of your investments can go down as well as up and you may get back less than you originally invested. We don't offer advice, so it's important you understand the risks, if you're unsure please consult a suitably qualified financial adviser. Tax treatment depends on your individual circumstances and rules may change. Past performance is not a guide to future performance and some investments need to be held for the long term.
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