Djerriwarrh Ltd (ASX: DJW) will be moving to quarterly dividend payments this year, with the first of these to be paid in May, subject to board approval.
The listed investment fund announced its half-year results on Monday, and set its dividend at 7.25 cents per share fully franked – equal to the same corresponding period last year.
The company said regarding the dividend:
Based on the interim dividend declared and the final dividend paid, the dividend yield including franking on the net asset backing is 6.6%. This represents an enhanced yield of 2.6 percentage points higher than that available from the S&P/ASX 200 Index when franking is included.
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Benchmark missed
The fund said that for the six months to the end of December, its portfolio return, including franking, was 2.1%, which underperformed the S&P/ASX 200 Index (ASX: XJO), which returned 4.2%.
Over 12 months, the fund also underperformed, returning 5.5% compared with 11.5%.
The fund said in its report:
Djerriwarrh's relative underperformance over these periods was heavily impacted by the cumulative effect of being underweight in gold and critical minerals companies, which have risen significantly, and the decline in the share prices of EQT Holdings and CSL. Djerriwarrh typically does not have exposure to small and mid-cap sized companies in gold and critical minerals as they are very cyclical investments and do not produce dividends of any significance. It is also difficult to write call options over many of these companies.
The fund's net operating result for the half was $19.7 million, down from $21 million for the previous corresponding period.
The fund went on to say:
In the current highly valued market, we have allowed many option positions to be exercised and have maintained a net cash position for the majority of the period. We also don't have exposure to small and mid-cap resources which have risen significantly over these periods. These factors have all impacted relative portfolio returns but we have been able to maintain a significant fully franked dividend yield ahead of the market which is a key objective of Djerriwarrh.
The largest contributors to Djerriwarrh's income were BHP Group Ltd (ASX: BHP), Woodside Energy Group Ltd (ASX: WDS), Transurban Group (ASX: TCL), Region Re Ltd (ASX: RGN), Rio Tinto Ltd (ASX: RIO), CSL Ltd (ASX: CSL), Woolworths Group Ltd (ASX: WOW) and Telstra Group Ltd (ASX: TLS).
The first half dividend will be paid on February 23. The dividend reinvestment plan remains in place with zero discount applied.
Djerriwarrh was valued at $822.8 million at the close of trade on Friday.
