UK-focused Dunedin Income Growth Investment Trust said its net asset value had outperformed the market in the first half, but warned times would remain tough.

Net asset value per share was up by 5.9% in total return terms, compared with the company's benchmark, the FTSE All-Share Index, which increased by 1.9%.

The firm's share price increased by 11.8% on a total return basis over the six months to the end of July.

Chairman Roy Macnamara said that since the rise in the market, Dundein believed company valuations in general were no longer cheap.

"The analyst community seems reluctant to look more than twelve months ahead and still expects close to double digit earnings growth in 2013; we consider that this is a somewhat optimistic view," he said.

"Companies considered safe and secure which distribute a fair proportion of their profits to shareholders have become 'in vogue' investments in recent times.

"While we are inclined to agree with such a stance, we do keep a wary eye on valuations and bear in mind that these will be a key determinate of our investors' long-term returns," he said.

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