The New Zealand Investment Trust suffered a 37 percent slump in net asset value in the year ended October 31, however it is turning that position around.
Chairman Donald Campbell says the Asian crisis and currency movements were the main reasons why the trust's NAV fell so far in the 12 month period.
During that time the trust underperformed the NZSE40 and its net assets fell from £23 million to £14.3 million.
The trust is listed in London and New Zealand, is managed by UK-based Exeter Asset Management and is advised in New Zealand by Coronet Asset Management.
Campbell says the trust's focus on smaller companies and lack of holdings in Telecom also contributed to last year's underperformance.
Telecom, which makes up a third of the NZSE40, fell by only 0.4 percent in the trust's financial year, compared with a 20.2 percent drop in the New Zealand equity market, as measured by the NZSE40 index.
Sharebrokers CS First Boston describe the past 12 months as "a period of disappointing share price performance as the portfolio generally under-performed, a poor performing market, and the share price moved from a premium to a discount against net asset value."
However, it is positive on future prospects and says NZIT is "extremely underratedand must now be attractive to investors looking to obtain exposure to a basket of NZ dominated equities, with an emphasis on capital appreciation."
"Having called the recovery in commodity price sensitive stocks a little too early, the last two months have seen the portfolio well placed to benefit from overall market upturn."
Since October 31 NZIT has reduced its holdings in cash. As at January 15 its six biggest holdings were INL, Ports of Auckland, TranzRail, Fisher and Paykel, Telecom and Fletcher Building.
The NZIT board will recommend at its annual meeting in London next month a final dividend for the year of 4.75p per ordinary share, the same as the previous year.
The New Zealand Investment Trust suffered a 37 percent slump in net asset value in the year ended October 31, however it is turning that position around. 