Brunner Investment Trust (LSE:BUT) PLC hiked its interim dividend to keep it on track to maintain its ‘dividend hero’ status, tipping its hat to the AI hype that benefited its largest shareholding, Microsoft.
Net asset value per share increased 0.7% to 1,187p in the six months to end-May after shrinking 1.4% the previous year.
A first-half dividend of 5.55p per share was declared, with the board stating it anticipates second and third interim dividends at a similar level and an unchanged final dividend for 2023 of 6.05p, which would put it on track to have hiked its dividend for 52 consecutive years.
Chair Carolan Dobson noted that excitement about artificial intelligence (AI) had been a key theme of the first half of the year.
“Perhaps we will see that emerge as the next stock market bubble,” she said, while noting that the trust’s investment manager, Allianz Global Investors, found opportunities fuelled by the digitalisation trend occurring across many industries.
“The advent of greater usage of AI will simply continue this trend, though maybe with a greater intensity.”
Microsoft, which is 6.9% of the portfolio, is at the forefront of this new era, with close links to ChatGPT owner OpenAI and among the 'mega-cap' tech stocks that have led in terms of performance in the past several months.
Managers Julian Bishop and Christian Schneider noted that six tech mega caps, Apple, Microsoft, Amazon, Alphabet, Nvidia and Meta have accounted for virtually all the gains in the S&P 500.
“It only takes one Microsoft to perform well, with its near $2.5 trillion market cap, approximately the same as the entire FTSE 100, to mask declines in dozens of other, smaller companies. Probabilistically, this has made it a hard market to outperform. We are pleased with our performance in this context.”