EDINBURGH INVESTMENT TRUST: All Weather Foundation restores its reputation as a major holding company
The Edinburgh Investment Trust has failed in recent years, especially when it was run by Mark Barnett at Invesco.
A long series of poor performance led to the fact that in late 2019 the manager was fired and replaced by Majedie Asset Management.
Although Majedie has since been absorbed by the investment house Liontrust, James de Ufa, who took over from Barnet, remains the head of the trust.
Now the head of the Global Fundamental Liontrust team, Ufaug says he remains on track to secure an “all-weather” investment trust that provides investors with a mix of capital and income growth that exceeds the FTSE All-Share Index.
The £ 1 billion trust, listed on the London Stock Exchange, is invested in 52 stocks, mostly in the UK.
Big holdings are familiar names – such as Shell, HSBC and NatWest. “My goal,” says Ufagh, “is to create this fund as a major holding company for investors with a long history. [going back to 1889]low charges and a good track record ‘.
This is a challenge. The portfolio was redesigned, while the new team had to deal with a sharp correction of the market in early 2020, when the UK imposed a block.
While performance is starting to look a little better – it has almost topped the FTSE All-Share index in the last three years – problems lie around every corner.
While dividend growth is part of it Edinburgh The target, this was postponed in the financial year until April 2021 with annual earnings remaining at 28.65 pence per share.
Uphaugh says it will be a council decision as to whether annual revenue increases for the year before earlier this month.
The first two quarterly payments of 6 pence per share were the same as last year.
The trust is managed flexibly without a well-thought-out investment program – it is not a growth-oriented and value-oriented fund.
“We’re looking at a few investment topics,” he says. These include “Darwinism” and “ESG rehabilitation” – ESG, which means environmental, social and governance.
Food retailer Greggs is an example of Darwinism surviving the best – that is, a company that has cemented its position as the country’s leading baker through blocking, expanding its real estate portfolio and market presence.
Uphaugh says Shell, its largest holding company, is desperately trying to improve its ESG reputation by promising to become a zero-emission business by 2050.
Shares the company has increased in recent months include defense firms BAE Systems and Thales Group (listed in France) and healthcare giants GlaxoSmithKline and Novartis.
Uphaugh wants the trust’s shares to reflect the value of the underlying assets.
They are currently trading at a nearly 7 percent discount, which means the underlying assets are worth more than the price you pay to invest in them through a trust.
But he says Liontrust’s willingness to provide the fund portends good – he has launched a special website at edinburghinvestmenttrust.com.
One of the big positives is that in late September he will be able to reduce the cost of loans by £ 100 million as a result of a refinancing deal. Interest fees will fall from 7.75 percent to 2.4 percent.
Over the past five years, Edinburgh has earned an overall return on investors of 11 percent compared to 26 percent on the FTSE All-Share Index.
Its annual expenses are a reasonable 0.5 percent, and its annual income is about 3.8 percent. His stock market identification code is 0305233, and his market ticket is EDIN.
EDINBURGH INVESTMENT TRUST: Flexibility is the key
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