New Star Investment Trust PLC (NSI) 
New Star Investment Trust PLC: Interim ANNOUNCEMENT for the Six Months to 31 12 2020 
22-March-2021 / 07:00 GMT/BST 
Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 
(MAR), transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
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NEW STAR INVESTMENT TRUST PLC 
 
This announcement constitutes regulated information. 
 
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31st DECEMBER 2020 
INVESTMENT OBJECTIVE 
The Company's objective is to achieve long-term capital growth. 
 
FINANCIAL HIGHLIGHTS 
 
                                                                          30th June          % 
                                                      31st December 2020 
                                                                          2020               Change 
PERFORMANCE 
Net assets (GBP '000)                                   122,813             113,885            7.8 
Net asset value per Ordinary share                    172.92p             160.35p            7.8 
Mid-market price per Ordinary share                   122.00p             106.00p            15.1 
Discount of price to net asset value                  29.4%               33.9%              n/a 
 
                                                      Six months ended    Six months ended 
 
                                                      31st December 2020  31st December 2019 
 
Total Return*                                         8.71%               4.02%              n/a 
IA Mixed Investment 40-85% Shares (total return)      10.00%              4.41%              n/a 
MSCI AC World Index (total return, sterling adjusted) 12.32%              4.89%              n/a 
MSCI UK Index (total return)                          5.48%               3.03%              n/a 
                                                                    Six months ended 
                                     Six months ended 31st December 
                                                                    31st December 
                                     2020 
                                                                    2019 
REVENUE 
Return (GBP'000)                       279                            792 
Return per Ordinary share            0.39p                          1.11p 
Proposed dividend per Ordinary share -                              - 
Dividend paid per Ordinary share     1.40p                          1.40p 
 
 
TOTAL RETURN 
Return (GBP'000)                       9,922                          4,582 
Net assets (dividend added back)     8.7%                           4.0% 
Net assets                           7.8%                           3.1% * The total return figure for the Group represents the revenue and capital return shown in the consolidated statement of comprehensive income plus dividends paid.

INTERIM REPORT

CHAIRMAN'S STATEMENT

PERFORMANCE

Your Company generated a positive total return of 8.71% over the six months to 31st December 2020, taking the net asset value (NAV) per ordinary share to 172.92p. By comparison, the Investment Association's Mixed Investment 40-85% Shares Index rose 10.00%. The MSCI AC World Total Return Index rose 12.32% in sterling while the MSCI UK Total Return Index rose 5.48%. Over the six months, UK government bonds declined 0.82%. Further information is provided in the investment manager's report.

Your Company made a revenue profit for the six months of GBP279,000 (2019: GBP792,000).

GEARING AND DIVIDENDS

Your Company has no borrowings. It ended the period under review with cash representing 9.51% of its NAV and is likely to maintain a significant cash position. Your Company has small retained revenue reserves and your Directors do not intend to pay an interim dividend (2019: nil). Your Company paid a dividend of 1.4p per share (2019: 1.4p) in November 2020 in respect of the previous financial year. The level of future dividends may, in the short term, be adversely affected by Covid-19-related dividend cuts.

DISCOUNT

During the period under review, your Company's shares continued to trade at a significant discount to their NAV. The Board keeps this issue under review.

OUTLOOK Accommodative monetary and fiscal policies, the roll-out of Covid-19 vaccination programmes and mild inflation should underpin equities in early 2021, particularly lowly-valued cyclical stocks. Geographically, the UK stockmarket appeared attractive in the early spring of 2021 because of its heavy weightings in cyclical sectors as did the stockmarkets of Asia excluding Japan and the emerging markets, where public sector debt levels were low and where companies were trading on low valuations. Long-dated government bonds appeared vulnerable at a time of rising inflation expectations but gold equities may benefit from the current environment in which inflation is higher than official interest rates.

NET ASSET VALUE

Your Company's unaudited NAV per share at 28th February 2021 was 170.52p.

Geoffrey Howard-Spink

Chairman

18th March 2021

INVESTMENT MANAGER'S REPORT

MARKET REVIEW

Global equities rose 12.32% in sterling terms over the six months to 31 December 2020 as monetary and fiscal stimulus proved supportive and global Covid-19 vaccine rollout programmes began, increasing expectations of an early return to economic normality. Global bonds gained 6.03% in local currencies but fell 4.15% in sterling because of foreign exchange movements.

In the autumn of 2020, increasingly stringent lockdown measures were introduced in America and Europe to combat a second wave of the pandemic. Central banks responded with more stimulus to cushion the impact on businesses and households. The Federal Reserve shifted its inflation target from the fixed 2% rate it adopted after the credit crisis to an average of 2%, implying inflation will be allowed to exceed 2% for some time to compensate for more than a decade of persistently below-target inflation. The Bank of England announced GBP150 billion of additional quantitative easing in November while the European Central Bank announced an additional EUR500 billion of asset purchases in December. In the US, a further large-scale fiscal stimulus is on the way, with the new president, Joe Biden, unveiling a USD1.9 trillion rescue plan in addition to the USD900 billion relief package enacted in December.

Sterling strengthened as December's European Union-UK trade agreement averted a hard Brexit. Sterling gained 10.63%, 5.87% and 1.55% respectively against the dollar, yen and euro. UK stocks underperformed, rising 5.48%, but UK smaller companies, typically more sensitive to domestic trends, gained 27.56%. UK government bonds fell 0.82% but sterling corporate investment-grade and high-yield bonds gained 5.57% and 9.29% respectively as default fears receded and income-seeking investors bought corporate bonds in the wake of equity dividend cuts.

US stocks rose 22.16% in dollars but only 10.42% in sterling. Investors welcomed the initial outcome to November's elections. These gave the Democrats the presidency and control of the House of Representatives but not the Senate, initially forestalling investor fears of higher taxation and increased regulation. Run-off elections in January, however, gave the Democrats Senate control.

Asia was largely spared a second wave of Covid-19 infections, allowing China to ease restrictions. Dollar-weakness and stronger industrial commodity prices contributed to outperformance by equities in Asia excluding Japan and emerging markets, which gained 18.84% and 18.77% respectively in sterling. Strong global demand for Chinese products, particularly electronic goods, contributed to a record USD78 billion trade surplus.

Inflation data were stronger than anticipated, particularly in the US and UK, despite unemployment rising significantly above pre-pandemic levels. In the US, the five-year breakeven inflation rate, which measures medium-term inflation expectations, rose and implied that inflation would exceed 2%. In early 2021, commentators were divided on the long-term inflationary consequences of the exceptional monetary and fiscal easing in response to the pandemic. It is likely, however, that higher commodity prices, pent-up consumer demand and disrupted supply chains will foster inflation in the short term.

PORTFOLIO REVIEW

Your Company's total return over the period under review was 8.71%. By comparison, the Investment Association (AI) Mixed Investment 40-85% Shares sector, a peer group of funds with a multi-asset approach to investing and a typical investment in global equities in the 40-85% range, rose 10.00%. The MSCI AC World Total Return Index rose 12.32% in sterling while the MSCI UK Total Return Index rose 5.48%. Your Company benefited from its allocations to UK smaller stocks and emerging market equities but its allocations to dollar cash and gold equities hurt performance. Income from investments fell over the period as dividends were cut, cancelled and deferred. This will affect the revenue available to pay a dividends unless retained reserves are utilised.

Your Company's investment in dollar cash and the allocation to gold equities within the BlackRock Gold & General portfolio were hurt by currency movements over the period as extraordinary monetary and fiscal stimulus weakened the dollar and hopes of a Brexit deal buoyed the pound. Gold and gold equities rose 3.26% and 0.91% respectively in dollars but fell 6.66% and 8.78% respectively in sterling because of currency movements. Dollar cash and gold equities provide diversification, however, and may offer some capital protection should equity markets in general fall.

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