By Kristen McGachey, Portfolio Adviser, 26 May 22
Board banking on Liontrust’s ‘enhanced marketing resources’ to bring shares in line with NAV
The board of the Edinburgh Investment Trust is banking on Liontrust’s brand power to help rein in its discount, which has continued widening despite a turn around in performance with Majedie at the helm.
The £1.3bn trust beat the FTSE All Share for the second year in a row on an NAV basis since swapping Invesco’s Mark Barnett as its manager for Majedie’s James De Uphaugh.
It delivered a NAV total return of 14.1% in the 12 months to 31 March 2022 against the index’s 13%. The year before it had outperformed the benchmark by a much higher margin of 8 percentage points (ppts).
However, its share price struggled to catch up, rising by only 10.6% over the period. This resulted in its discount widening from 4.5% to 7.7%. As at 23 May, it had widened further to 8.3%.
QuotedData noted some shareholders would likely be “disappointed” by the share price underperformance.
Though the investment company increased its dividend by 3.3% to 24.8p, it noted this was not covered by revenue…
Last month the board confirmed it would keep Majedie as its portfolio manager following its acquisition by Liontrust. In the annual report, Suarez explained directors had been “reassured” the investment management process would be “business as usual,” including the team’s consideration of ESG factors in their work.
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