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Interim results: Did Perpetual Investments outperform the market?

One of Australia’s largest fund managers has managed to beat the market over the second half of the 2018 calendar year, but only just.

Perpetual Equity Investment Company Ltd (ASX: PIC) posted its interim results this morning, announcing that its investment portfolio delivered a return of -6.5% over the period, outperforming the benchmark by 0.5%. A fully franked dividend of 3.1 cents per share was also announced, which represents a 3% increase on the previous corresponding period. The Perpetual share price is up 0.5% this morning.

The second half of 2018 was a tough period for Australian equities as global growth concerns and macro risks came to the forefront, sparking a sell-off.

“The Board recognises our shareholders value a sustainable dividend stream and is pleased to announce an increased interim dividend for the first half of the year. During a time of market volatility and overall market weakness, we have achieved this for our investors through prudent management of the Company,” said Chairman Nancy Fox in a statement.

The company recorded an operating loss after tax of $16.2 million for the period as a result of unrealised losses attributed to unfavourable market conditions. Perpetual noted that market conditions have since seen an upturn in the second half of the fiscal year.

A value investor’s market?

Perpetual Portfolio Manager, Vince Pezzullo said: “The ongoing market volatility has been challenging for the industry and created some uncertainty. We believe value investing will return to favour as market conditions continue to change.”

“We continue to focus on strategically managing our portfolio and our disciplined investment approach to deliver sustainable income for our investors over the long run.”

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Motley Fool contributor Cale Kalinowski has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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