Temple Bar (TMPL), the best performing UK equity income investment trust over five years, fell behind the FTSE All-Share in the first half of the year but has since pulled ahead of its benchmark, half-year results show.
The £1.3bn closed-end fund recovered from the shock of the Iran war and the spike in oil prices to generate a 5.4% investment return in the six months to 30 June. Shareholders saw a 5.2% return as the shares continued to trade at a small premium of around 1% above net asset value (NAV).
However, this trailed the 7.2% gain in the All-Share as a result of the trust not holding HSBC and Rolls-Royce, whose strong performance provided more than 3% of the benchmark’s return.
Temple Bar’s Redwheel value fund managers Nick Purves and Ian Lance saw financial holdings Aberdeen Group, Standard Chartered and Dutch conglomerate NN Group do best, although advertising agency WPP and Stellantis, the Vauxhall, Citroen, Renault and Fiat car maker, weighed as their shares fell.
They took profits exiting mining giant Anglo American and trimming some financial and energy positions and offloading US brewer Molson Coors on its worsening outlook. These funded purchases of seven new positions including B&M European Value Retail, Land Securities and Kraft Heinz.
Performance has improved since the end of June with the shares up 14.1% this year versus 10.8% from the FTSE All-Share. In March it reported a 33.9% investment return for 2025, exceeding the 19.9% of the previous year, and beating the benchmark’s 24%. Since Redwheel took over as fund manager in October 2020 up to 30 June, Temple Bar’s 216% total investment return, including dividends, has powered ahead of the All-Share’s 118%, the company said.
Chair Charles Cade said the board continued to monitor whether Temple Bar’s 30% limit on overseas stocks should be lifted in light of the continued shrinkage of the UK stock market. The first half alone saw bids for Beazley, EasyJet, Segro, Schroders and Tate & Lyle, which were compounded by widespread buying back of shares by companies, which the trust supported.
Purves and Lance said: “Whilst there is no investment approach that will outperform the stock market in each and every year, we feel confident that through the disciplined application of a well-diversified value investing strategy, we can continue to deliver these excess investment returns into the future.”
Our view
Matthew Read, senior analyst at QuotedData, said: “Temple Bar’s underperformance during the half-year is not a cause for concern and is largely explained by not owning HSBC and Rolls-Royce, rather than any obvious deterioration in the underlying portfolio. Long-term and year-to-date numbers are strong and, more importantly, the managers are still finding plenty of opportunities: the portfolio trades on around 11 times earnings, roughly half the valuation of global equities. The trust is also still seeing strong demand for its shares – allowing it to issue almost £87m of shares since October 2025. That combination of strong long-term performance, continued value in the portfolio and fresh capital coming in is a healthy one.”
