Market Snapshot
  • U.S.
  • Europe
  • Asia
Ticker Volume Price Price Delta
DJIA 16,262.56 89.32 0.55%
S&P 500 1,842.98 12.37 0.68%
NASDAQ 4,034.16 11.47 0.29%
Ticker Volume Price Price Delta
STOXX 50 3,091.52 -40.05 -1.28%
FTSE 100 6,541.61 -42.15 -0.64%
DAX 9,173.71 -165.46 -1.77%
Ticker Volume Price Price Delta
NIKKEI 14,339.84 343.03 2.45%
TOPIX 1,159.48 23.39 2.06%
HANG SENG 22,813.92 142.66 0.63%



All information is at 31 December 2013 and unaudited.

Performance at month end with net income reinvested

                              One     Three     Six     Since
                            Month    months  months    launch
                                                    (24 Oct 2012)

Net asset value              1.3%      6.6%    2.5%     19.4%
Share price                 -2.6%      3.0%   -0.2%     16.3%
Russell 1000 Value Index     1.4%      7.6%    4.7%     30.2%

Source: BlackRock

At month end

Net asset value - capital only:                112.44p
Net asset value - cum income:                  113.19p
Share price:                                   112.25p
Discount to cum income NAV:                       0.8%
Net yield*:                                       3.6%
Total assets including current year revenue:   £112.9m
Target yield**:                                   4.0%
Gearing:                                           nil
Options overwrite:                               17.9%
Ordinary shares in issue:                   99,761,305

During the month, the Company has issued 150,000 shares for proceeds of £0.2m.

*based on dividends of 1p per share each declared on 14 February 2013, 14 May
2013, 6 August 2013 and 3 October 2013

** based on issue price of 100p


Sector Analysis                Total Assets (%)
Financials                                21.8
Industrials                               14.6
Energy                                    13.7
Consumer Staples                          11.3
Consumer Discretionary                     9.6
Health Care                                8.8
Materials                                  7.0
Utilities                                  5.6
Information Technology                     5.3
Telecommunication Services                 3.3
Net current liabilities                   -1.0

Country Analysis               Total Assets (%)
USA                                       93.2
Canada                                     2.6
Australia                                  1.6
France                                     1.4
United Kingdom                             1.3
Netherlands                                0.9
Net current liabilities                   -1.0

Ten Largest Investments(in alphabetical order)

Company                        Country of Risk
Chevron                                   USA
Comcast                                   USA
Exxon Mobil                               USA
General Electric                          USA
Home Depot                                USA
JPMorgan Chase                            USA
Merck                                     USA
Pfizer                                    USA
Prudential Financial                      USA
Wells Fargo                               USA

Bob Shearer and Kathleen Anderson, representing the Investment Manager, noted:


For the one month period ended 31 December 2013, the Company posted a 1.3%
increase in its NAV while the share price declined by 2.6% (all in sterling).
The Company's benchmark, the Russell 1000 Value Index, returned 1.4% for the

On a relative basis, the largest contributor to the Company's performance
during the period was a combination of stock selection and an underweight to
the financials sector. Not owning benchmark holding Bank of America Corporation
and owning non-benchmark holding American Express Company proved particularly
beneficial. Other positive contributors during the month included an overweight
to the materials sector and an underweight to the health care sector. An
overweight to consumer discretionary and stock selection in consumer staples
also modestly helped relative returns for the period.

The largest detractor from relative performance for the month was a combination
of stock selection and an underweight to the information technology sector.
Owning Microsoft Corporation, a non-benchmark holding, proved particularly
costly. Stock selection in the materials and industrials sectors also hurt
relative returns for the period, as did an overweight to consumer staples and
stock selection in the telecommunication services sector.


Transactions: There were no notable transactions to report for the month of

As of 31 December 2013, the Company's options exposure was 17.9% and the delta
of the options was 90.4%.


The Company is currently overweight to the consumer staples, materials,
industrials, consumer discretionary and telecommunication services sectors. We
are underweight to the financials, health care, information technology, energy
and utilities sectors.

Current Outlook:

2013 was an exceptionally strong year for the US equity market, achieving its
best return since 1997 and only the nineteenth time it has eclipsed 30% in a
calendar year since 1926. US equities climbed steadily higher throughout the
year led by the small, mid-cap and growth areas of the market place. Despite a
few speed bumps along the way (elimination of the 2% payroll tax cut, budget
sequestration, Fed exit strategy and political infighting, to name a few) the
US economy continued to show signs of a modest yet sustainable recovery.
Although deflation and politics remain primary concerns heading into the new
year, we believe there are many tailwinds in place to support US equities.
Corporations are exceptionally healthy, are carrying high cash balances and
continue to return capital to investors in the form of growing dividends and
buybacks. The S&P's aggregate income statement is likely to achieve
meaningfully higher revenues and earnings than in previous years, and after
having cumulatively bled nearly $400bn since 2008, equities seem primed to
benefit from more investment dollars flooding into the market. On the macro
side, housing has grown stronger, unemployment has improved and the Fed had
enough confidence to take its first baby step in December by reducing its pace
of bond-buying. Collectively, we believe these variables should provide more
stability for stocks, and decelerating correlations should afford a higher
degree of opportunity for active managers during 2014.

Though high quality stocks underperformed their lower quality counterparts
during 2013, we believe that these stocks are likely to be stronger performers
in a slow growth, low inflation economy with gradually rising interest rates.
From a valuation perspective, mega cap stocks remain more attractively valued
than other areas of the market place, are carrying higher yields and will have
a greater ability to fund projects from cash reserves should rates rise and
financing costs accelerate. Within this space, we continue to focus on sectors
likely to experience momentum in this environment. Financials now account for
over 21% of the portfolio, and is a sector we view as a natural beneficiary in
a recovering domestic economy; we increased weightings in diversified banks,
regional banks and insurance companies during 2013. Materials and industrials,
collectively, make up approximately 21% of the portfolio and we believe they
will benefit from global population growth and the explosive proliferation of a
middle class in emerging markets. Together, consumer staples and consumer
discretionary also account for nearly 21% of the portfolio. Companies within
these sectors are likely to profit from lower unemployment, eventual wage
growth and a rebound in home prices over time. While technology and health care
are relatively smaller parts of the portfolio, we believe they will be sectors
of growing importance in the years to come as steadier cash flows will lead to
more companies paying dividends. The Company remains well-positioned to capture
growth and deliver consistent income to investors, but importantly, ready to
provide relative protection should headwinds persist and market volatility
intensify in the New Year.

22 January 2014


Latest information is available by typing on the
internet, "BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3 (ICV
terminal). Neither the contents of the Manager's website nor the contents of
any website accessible from hyperlinks on the Manager's website (or any other
website) is incorporated into, or forms part of, this announcement.

-0- Jan/22/2014 14:15 GMT

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