Diverse Income Trust underperforms benchmark
By Michele Maatouk
Date: Friday 13 Feb 2026
(Sharecast News) - The Diverse Income Trust said on Friday that it underperformed its benchmark index in the six months to 30 November 2025, as its tilt towards smaller companies proved to be a headwind.
The company's net asset value total return was 8.5%, versus a 12.5% total return from the Deutsche Numis All Share Index.
The trust pointed out that the UK market's returns were led by larger capitalisation stocks, with the smaller company and alternative market sub-components delivering returns of 7.4% and 1.4% respectively.
"The company's portfolio is tilted towards opportunities amongst smaller companies, which presented a headwind during this reporting period," it said.
Since the period end, however, strong absolute performance has resumed, it said, with a NAV total return of 10% to 4 February, versus a 7.5% rise in the Deutsche Numis All Share Index.
Revenue earnings per share were 2.83p at the end of November, up 7.6% on last year's 2.63p.
The trust said it made "significant" changes to the portfolio over the half to reflect evolving market conditions.
Strong returns in gold mining stocks led it to take profits in Pan African Resources and Thor Exploration, while the Greatland Gold holding was sold in full. Still, the portfolio retained a large weighting to mining, with the purchase of additional copper mining holdings such as ACG Metals.
The trust took profits on several of its holdings in the financials sector. It sold out of investment manager Aberdeen Group, reinsurer Conduit Holdings, financial advisory services firm FRP Advisory, life insurer Phoenix and XPS Pensions, together with residual positions in pawnbroker H&T and pensions and annuities firm Just Group after they agreed premium takeovers.
During the period, the trust - which does not usually invest outside of the UK - introduced two new European listed stocks: Norwegian oil & gas company BlueNord and French energy conglomerate Engie. They were selected because "their valuations are even more out of line with their fundamentals than their UK equivalents", it said.
The trust said property companies Land Securities and Primary Healthcare Properties, and water and waste services supplier Pennon are sizeable new holdings bought for the portfolio.
"Within the UK market, many smaller companies have suffered more severe derating due to their invisibility to larger institutional investors," it said.
"With UK valuations looking attractive relative to other regions, with the regulatory discussion shifting towards encouraging investment in the UK market and with UK and global interest rates on a declining trend, the prospective risk-reward from UK equities looks better than for some years, particularly the neglected second liners and smaller companies."
The trust's top 10 investments include Galliford Try, CMC Markets, TP Icap, Aviva and Rio Tinto.
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