During the past financial year, the Company's Net Asset Value ("NAV") and share price experienced steady performance with low volatility up until the end of August, despite a challenging period for global equity and bond markets, so it is disappointing to be reporting a sharp fall in the share price for the year to 30 September 2022, before income is re-invested, all of which occurred in September.  September can best be described as a 'perfect storm' for financial markets as the threat of recession combined with the spiralling cost of living crisis as inflation hit highs not seen for many years, and the war in Ukraine shows no end in sight.  The final straw for UK markets at the end of September was when the new Prime Minister at the time, Liz Truss, and her Chancellor, Kwasi Kwarteng, announced the now infamous 'mini budget' which produced a sharp sell-off in sterling, UK gilts and equities.  During October, following the change of Chancellor and then subsequently Prime Minister, the majority of the previously announced 'mini budget' was reversed which has helped these markets recover to prior levels despite the ongoing challenges. 

Portfolio performance

During our reporting period, which covers the year ended 30 September 2022, the Company's net asset value ("NAV") with debt at fair value, and income reinvested, was +1.2%.  During September, as the events mentioned above unfolded, the Company's discount widened in the market sell-off with the result that the share price fell just over 10% over the year ended 30 September 2022; with income re-invested (total return) this still equated to a negative return to shareholders of 5.0%. Since the year end, the turbulence in stock markets has subsided and further information may be found in 'Outlook'.

Since the change of strategy in August 2020, up to 30 November 2022, the Company's NAV total return was 17.6%, with debt at fair value and dividends re-invested, which compares favourably with our return target of 6% per annum; our total return to shareholders, with income re-invested, was 18.5% over the same period. 

Earnings and dividend

A major component of the proposition to investors remains a dependable quarterly dividend; this represented a dividend yield of 6.2% based on the year end share price of 89.8 pence. The Board confirmed, as part of the strategic review, its intention to continue to pay at least the current level of dividend. In addition, during the period while the new private markets' investments continue to grow their contribution to the Company's income, the Board is prepared to use its revenue reserves which have been built up by the Company over many years to support the dividend policy as required. These reserves are the equivalent of two years of the present dividend which should give shareholders a level of comfort regarding regular income payments.

Three interim dividends of 1.40 pence per share were paid to shareholders in March, July and October 2022.  The Board  declared, on 15 December 2022, a fourth interim dividend of 1.40 pence per share to be paid on 19 January 2023 to shareholders on the register on 23 December 2022. The ex-dividend date is 22 December 2022. Total dividends for the year are 5.60 pence per share. As in previous years, the Board intends to put to shareholders at the Annual General Meeting ("AGM") on 28 February 2023 a resolution in respect of its current policy to declare four interim dividends each year.

Discount management

Despite the increased stability and improved NAV performance achieved since the change in strategy in August 2020, the share price discount to NAV has remained stubbornly wide and at the year end was 23.7% (calculated with debt at fair value and including income).  The Board is conscious that further work is required to increase awareness of the strengths and benefits of the revised strategy, which has an increased tilt towards private markets, and is working with the Manager and the Company's broker in this regard.  While the Board is unhappy with the current level of the discount, the increased focus on less liquid investments is incongruous with the previous policy which, following a reconstruction in 2017, was stated as 'seeking to maintain the Company's share price discount to NAV (excluding income, with debt at fair value) at less than 5%, subject to normal market conditions'.  While market conditions could hardly be described as 'normal' at times over the past couple of years, the Company's limited share buybacks have proved largely ineffective in narrowing the discount in these more volatile markets.  Substantial buybacks in pursuit of defending a 5% discount level would not only demonstrably shrink the Company but, more importantly, would have a detrimental impact on the balance sheet and portfolio construction by reducing liquidity available for the Company's unfunded commitments.  The Board does not believe this to be in the best interests of shareholders as a whole and, as a consequence, considers that a refinement of the share buyback policy to being investment-led is merited following the revision of the investment strategy.

The Board has reviewed the share buyback policy, working closely with the Manager. The Manager seeks to generate attractive risk adjusted returns by investing in, or committing to, new or existing opportunities, whilst having particular regard to the Company's return target, and taking into account income, predicted cash flows, market risk and liquidity requirements.  It is proposed that, subject to overall liquidity needs, available cash may be used under the Company's share buyback authority, granted annually by shareholders, to undertake share buybacks where to do so represents a better prospect of delivering the return objective and long-term shareholder value than that which could be achieved by investing in new opportunities.  Shareholders are able to endorse this revised policy, which the Board believes is preferable, being investment-led, by voting in favour of Resolution 15 at the AGM, which gives the Company the authority to buy back its own shares up to a limit of 14.99% of the then issued share capital.  Further details on Resolution 15, as well as on Resolution 12 relating to the continuation of the Company, may be found in the Directors' Report.

Treasury shares

The Company bought back 871,424 shares into treasury, at a cost of £864,000, during the year ended 30 September 2022. The Board has agreed that shares bought into treasury will only be re-issued in the event of the share price trading at a premium to the NAV per share as Ordinary shares can be re-issued out of treasury less expensively than new Ordinary shares can be issued. Although shares may be held in treasury indefinitely the Board has adopted a policy such that, in the event that the number of treasury shares represents more than 10% of the Company's issued share capital (excluding treasury shares) at the end of any financial year, the Company will cancel a proportion of its treasury shares such that the remaining balance will equal 7.5% of the issued share capital (excluding treasury shares).

Investment team changes

During the year the Investment Manager has made changes to the team supporting Nalaka De Silva and I am delighted to welcome Heather McKay, Head of Global Active Allocation, and Simon Fox, Senior Investment Director for Global Active Allocation, who will now be working closely with Nalaka and Nic Baddeley. Heather brings considerable experience in strategic asset allocation while Simon, with his client consulting expertise, will support the Company's interaction with shareholders.


The Company's net gearing was 2.0% at 30 September 2022 as compared to 3.7% as at 30 September 2021, with the 6.25% 2031 Bonds priced at fair value. The Board continues to keep the overall level of gearing under review but, in the prevailing economic environment, there is no current intention to introduce further gearing.

Board review

As part of its annual board review the Board engaged an experienced board review consultancy to undertake an evaluation of the Board, its committees and individual Directors.  Assessments were undertaken by each Director and then discussed by the Board.  The evaluation has helped confirm that the Company's Board has in place an appropriate balance of experience, skills, corporate knowledge and gender diversity (60% male, 40% female).  Through recent changes to the listing rules boards will be, in future, required to report whether specific targets are met and publish data on the composition of the board by gender and ethnic backgrounds.  Currently the Board meets two of the criteria that at least 40% of Directors should be women and at least one senior board position (Chair, CEO, CFO or SID) should be a woman. The Board will use future recruitment opportunities to meet the third criteria of a board member who considers their ethnicity to be other than white or minority white.

Environmental, social and governance

There is no simple answer to sustainable investing and policies that accommodate climate change especially as some of the strongest returns in markets have come from fossil fuel companies on the back of soaring energy prices.  It is however very clear that these factors need to be carefully considered and active engagement with companies is required in order to help drive change.  Taking account of ESG factors is now an integral part of the investment process at abrdn as well as the ongoing monitoring after investments are included in the portfolio.  Equally as important the investment teams undertake constructive engagement with the investments held, in both public and private markets, on ESG issues and related risks.  More detail on the approach to ESG can be found in the comments on Socially Responsible Investment Policy in the Overview of Strategy as well as the comments on ESG which are set out in the Manager's Report.   The Board continues to review closely the Manager's approach to, and adherence with, its ESG philosophy and policies.

Changes in the allocation of certain expenses between capital and income

The Company has, in recent years, charged the Company's management fee and loan stock financing costs 60% to capital and 40% to revenue. Further to the reshaping of the investment portfolio following the strategic review in 2020, the Board has amended the allocation of these costs to charge 50% to capital and 50% to revenue with effect from 1 October 2022.

Name change

In order to align the Company's name with that of the Manager's business, which has changed to abrdn plc, the Board has resolved to amend the Company's name to abrdn Diversified Income and Growth plc, on or around 31 March 2023. The Company's website will change to abrdndiversified.co.uk. The Company's London Stock Exchange ticker, "ADIG", will remain unchanged.


This year's AGM is scheduled to be held in the South Place Hotel, 3 South Place, London, EC2M 2AF, from 12.30 p.m. on Tuesday 28 February 2023. The AGM provides shareholders with an opportunity to receive a presentation from the Investment Manager and to ask any questions that they may have of either the Board or the Investment Manager.

The Notice of AGM, which may be found in the published Annual Report, includes Resolution 12 relating to the continuation of the Company. The Board encourages shareholders to vote in favour of the Company's continuation as it believes the Investment Manager's strategy is now well positioned to deliver a dependable quarterly dividend as well as capital growth from its genuinely diversified portfolio consisting of a wide range of assets, each with clear, fundamental performance drivers. 


Markets continue to face considerable risks. These include higher inflation rates fuelling a cost of living crisis, economic recession in major economies, rising interest rates and the Russia/Ukraine conflict showing no resolution in sight.  Although markets have adjusted to reflect the likely damage to corporate earnings, there is little good news on the horizon to encourage investors back into the markets.  The Board, with the Investment Manager, regularly reviews the asset allocation taking into account these heightened risks; and the portfolio does incorporate a degree of inflation-linkage through its infrastructure assets whilst the renewable investments offer a degree of income protection. 

It is encouraging that markets have staged a recovery following the falls witnessed around the Company's year end in September. Throughout this challenging period, the Board believes that the Company's strategy, which seeks to provide a dependable quarterly dividend and capital growth from a globally diversified multi-asset portfolio, is well positioned to deliver an attractive total return with lower volatility than equities over the medium term.

Davina Walter
20 December 2022


Discrete performance (%)







Share Price












Total return; NAV to NAV, net income reinvested, GBP. Share price total return is on a mid-to-mid basis. Dividend calculations are to reinvest as at the ex-dividend date. NAV returns based on NAVs with debt valued at fair value. Source: Morningstar. Past performance is not a guide to future results.

Important information

Risk factors you should consider prior to investing:

  • The value of investments, and the income from them, can go down as well as up and investors may get back less than theamount invested.
  • Past performance is not a guide to future results.
  • Investment in the Company may not be appropriate for investors who plan to withdraw their money within 5 years.
  • The Company may borrow to finance further investment (gearing). The use of gearing is likely to lead to volatility in the Net Asset Value (NAV) meaning that any movement in the value of the company’s assets will result in a magnified movement in the NAV.
  • The Company may accumulate investment positions which represent more than normal trading volumes which may make it difficult to realise investments and may lead to volatility in the market price of the Company’s shares.
  • There is no guarantee that the market price of the Company’s shares will fully reflect their underlying Net Asset Value.
  • As with all stock exchange investments the value of the Company’s shares purchased will immediately fall by the difference between the buying and selling prices, the bid offer spread. If trading volumes fall, the bid-offer spread can widen.
  • Yields are estimated figures and may fluctuate, there are no guarantees that future dividends will match or exceed historic dividends and certain investors may be subject to further tax on dividends.
  • Derivatives may be used, subject to restrictions set out for the Company, in order to manage risk and generate income. The market in derivatives can be volatile and there is a higher than average risk of loss.
  • The Company may invest in alternative investments (including direct lending, commercial property, renewable energy and mortgage strategies). Such investments may be relatively illiquid and it may be difficult for the Company to realise these investments over a short time period, which may make it difficult to realise investments and may lead to volatility in the market price of the Company’s shares.
  • Investing globally can bring additional returns and diversify risk. However, currency exchange rate fluctuations may have a positive or negative impact on the value of investments.

Other important information:

Issued by abrdn Fund Managers Limited, registered in England and Wales (740118) at 280 Bishopsgate, London EC2M 4AG. abrdn Investments Limited, registered in Scotland (No. 108419), 10 Queen’s Terrace, Aberdeen AB10 1XL. Both companies are authorised and regulated by the Financial Conduct Authority in the UK.

Find out more at www.abrdndiversified.co.uk or by registering for updates. You can also follow us on social media: Twitter and LinkedIn.