HONEYCOMB Investment Trust reported a slight dip in net asset value (NAV) in January, which it attributed to “a seasonal increase in arrears”.
The London-listed fund, which invests in consumer, property and SME loans, posted a NAV return of 0.58 per cent last month under the new IFRS 9 accounting rules.
The new accountancy standards mean funds have to include potential losses in their portfolio.
“The company’s January return reflects the impact of an increase in IFRS 9 provisions related to organic portfolio due to a seasonal increase in arrears,” Honeycomb said.
“The performance of the structured and seasoned portfolios continues to be robust.”
The fund’s NAV has been in decline for the past few months, falling from 0.67 per cent in October to 0.65 per cent in November and 0.6 per cent in December.
However, Honeycomb’s investment asset portfolio increased slightly during January from £603m to £608m.
“The company believes that consumer, property and SME loans are asset classes that have the potential to provide attractive returns for investors on a risk-adjusted basis,” it said.
“Changes in the focus of mainstream lenders together with the implementation of new models that utilise data, analytics and technology more effectively, provide an opportunity to deliver better products to borrowers while generating attractive returns for the company.”
In the previous month’s update, Honeycomb said that economic uncertainty had impacted returns.
However, it said that there are still “significant lending opportunities with attractive returns in the company’s chosen markets with the pipeline of new opportunities remaining strong”.
By the end of January, Honeycomb was trading on a premium of 10.61 per cent to NAV.