trust celebrates three year anniversary

The Edinburgh Investment Trust (“EIT” or “the Trust”) Net Asset Value (NAV) and share price have outperformed the FTSE All-Share index over the three years since James de Uphaugh, supported by the Liontrust Global Fundamental team, became the portfolio manager in March 2020.

This performance has come from a high-conviction portfolio of 40 to 50 stocks listed in the UK and a small number listed on non-UK markets.

Highlights:

• The NAV has delivered a cumulative total return of 65.9% in the three years to 31 March 2023 against 47.4% by the FTSE All-Share index

• The share price has risen by 75.5% over the same period. The discount has narrowed from 11.5% at 31 March 2020 to 7.5% at 31 March 2023

• EIT has a dividend yield of 3.8% (as at 31 March 2023) and pays out dividends on a quarterly basis

• The returns have been driven by a diverse range of UK stocks and sectors. While up to 20% of the portfolio can be invested outside the UK, this is typically around 10% and currently is 7.9% (as at the end of February 2023)

• The Trust’s portfolio manager, James de Uphaugh, believes we are at the foothills of a resurgence of UK equities

• The long-term debt of the Trust was refinanced in 2021/22, with an average coupon of 2.44% and an average maturity of 25 years compared to the previous average coupon of 7.75%

• A new brand identity and website was created for the Trust ahead of the three-year anniversary 

James de Uphaugh and the 19-strong Liontrust Global Fundamental team have been managing EIT since March 2020. Over the past three years, the portfolio manager has delivered an increase in the NAV per share in excess of the growth in the FTSE All-Share Index. This has been achieved through a high-conviction portfolio of 40 to 50 stocks, many of which are world-leading businesses, and through a flexible investment approach.

The portfolio manager and the team consider the market environment and – combined with their rigorous bottom-up investment research – evolve weightings to growth, value and recovery companies accordingly. They seek to find stocks that can grow profits and dividends over the next three to five years and they engage with companies to encourage best practice.

Among the main positive drivers of returns for EIT over the past three years have been Ashtead, NatWest, Anglo American, Weir Group and Greggs.

James de Uphaugh, portfolio manager of EIT, said: “Since the spring of 2020, my aim has been to deliver long-term added value, regardless of economic and market conditions. To have delivered strong performance, both in relative and absolute terms, is a great endorsement not just of our strategy and our team, but also of the opportunities in the UK stock market.

“Investors have had little appetite for investing in the UK stock market in recent years, but it has shown real signs of resilience. Many UK stocks look undervalued, which offers investors the opportunity to benefit from discounted shares. This discount varies across sectors: our stock-driven research is unearthing fundamentally mispriced opportunities that should underpin future returns.

“One question that often crops up is why UK productivity has lagged every other major country since the Global Financial Crisis (GFC). However, measures of productivity are by their nature backwards looking, and therefore fail to take account of positive developments being made by businesses around innovation and technology or management changes. 

“The strength of our investment process and the opportunities in the UK stock market give me great confidence that we can continue delivering capital growth and income for shareholders of Edinburgh Investment Trust.”