London, UK, 3 January 2017

Edison issues research review on European Assets Trust (EAT)

European Assets Trust (EAT) aims to generate long-term capital growth from investment in European small- and mid-cap companies. It also has a high distribution policy; 6% of its euro-denominated NAV is paid out each year. Given the 9.4% discount to NAV, the current dividend yield is 7.8%. While EAT's near-term performance has trailed the benchmark Euromoney Smaller Europe ex-UK index, exacerbated by the result of the UK's European referendum, manager Sam Cosh states that his investment philosophy and process have not changed. He suggests that the process is robust and has been successful over the long term; areas of the portfolio that have been weak in the near term are expected to recover. EAT is currently running a net cash position of c 4%.

Having traded at a modest premium for a good part of the last three years, EAT's share price is currently trading at a 9.4% discount to cum-income NAV. This is wider than the average discounts of the last one, three, five and 10 years (range of 0.5% to 6.1%). There is scope for the discount to narrow if EAT's near-term investment performance versus the benchmark improves. EAT's current dividend yield is 7.8%.

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