TIDMADIG

Aberdeen Diversified I&G Trust PLC

18 December 2020

London, UK, 18 December 2020

Edison issues review on Aberdeen Diversified Income and Growth Trust (ADIG)

Aberdeen Diversified Income and Growth Trust (ADIG) has a diversified multi-asset approach, aiming to generate attractive long-term income and capital returns. After a strategic review in October 2020, the manager intends to increase the share of private assets in the portfolio to 45% by Q221 and to 55% over the long term (vs the previous c 43% target). ADIG's investment committee will now be led by Nalaka de Silva, head of private market solutions at Aberdeen Standard Investments (ASI). While ADIG's NAV TR performance has lagged the benchmark in recent years, the shares continue to offer an attractive FY21 yield of 5.8% (based on ADIG's dividend guidance). The manager's plan to maintain or increase dividends should be supported by the lower interest expense post the partial bond repurchase in early November 2020 and the use of revenue reserves.

ADIG's NAV TR performance has lagged its benchmark (Libor + 5.5% pa) since the strategy change in March 2017 to an increased focus on less liquid assets. The NAV discount has widened to c 10-22% since end-March 2020 from 5% before the COVID-19 pandemic. The last 12 months (LTM) dividend yield is 5.7%, ahead of its peers. We note that in FY20 dividends were covered by earnings.

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