Sarah Godfrey
5 January 2017 · 2 min read

European Assets Trust declares dividend for 2017

Fund pays distributions equal to 6% of year-end net asset value

European Assets Trust (EAT) has today declared its dividend for 2017. The fund has a policy of making distributions equal to 6% of year-end net asset value (in euros), paid in three instalments at the end of January, May and August.

The 2017 dividend will be a total of €0.7884 per share. Because the percentage is set, the amount of the dividend will vary from year to year and may fall as well as rise. During 2016, EAT’s euro-denominated NAV fell by c 13.5%, so the 2017 dividend is also c 13.5% lower than the €0.912 per share paid for 2016.

The weakness of sterling since the UK’s vote to leave the European Union has benefited UK-based investors in EAT, which invests in smaller and mid-sized companies across Europe. In contrast to the decline in euro-denominated NAV during the year, the sterling NAV was broadly static (+0.1%) for 2016, and the sterling NAV total return including reinvested dividends was +7.3%. Returns were behind the benchmark Euromoney Smaller Europe ex-UK index for the year (+23.3% sterling total return), largely as a result of declines in Irish holdings, which are seen as having greater exposure to the UK, following the Brexit vote. However, the fund’s performance in the second half of the year was better, with sterling share price and NAV total returns of +8.8% and +11.9% respectively, compared with +16.9% for the benchmark in the six months to 31 December 2016.

The first instalment of EAT’s 2017 dividend will be paid on 31 January. For sterling investors, the size of the payment will depend on the prevailing exchange rate at the time; the conversion will take place as close as practicably possible to the payment date. At current exchange rates the €0.7884 dividend is equal to 67p, which represents a dividend yield of 6.5% based on the 4 January closing share price of 1,034p.

Read our latest research on European Assets Trust, published on 3 January 2017, here.

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