Malvern trust just beats All Share Index

MALVERN UK Index Trust, the rump of the old Globe Investment Trust which is intended to track the FT-A All Share Index, marginally outperformed its target over the six months to 30 June 1992. Its net asset value increased by 2.48 per cent compared with 2.43 per cent.

David Davidson, assistant company secretary of the trust's manager, Edinburgh Fund Managers, attributed the outperformance to the accepted 'tracking error' in the 'optimisation' system used to track the index.

He said an error of up to 1 per cent was acceptable. Since inception in August 1990, the trust has underperformed the FT-A by 0.7 per cent after allowing for the initial costs of investment.

There is a margin of error because EFM uses optimisation to select a portfolio of only about 250 stocks to match the average performance of the 650 stocks in the index.

During the six-month interim period, the net asset value per share rose to 109.77p from 107.11p and funds under management to pounds 53.8m from pounds 52.4m.

Earnings per share rose to 2.03p from 1.85p. The interim dividend is up to 1.70p from 1.25p.

Mr Davidson said the final dividend should be at least 2.0p. That would leave the shares, down 1p to 103p yesterday, on a yield of only 4.79 per cent compared with the FT-A's estimated 4.94 per cent.

The trust's board said: 'It is difficult to envisage the stock market making much progress until tangible signs of recovery become evident.'