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Brunner Investment Trust relishes its geographic diversity

Snapshot

  • Formed in 1929 and managed by Allianz
  • Bruner has a global and sector agnostic remit
  • The trust is one of trade body the AIC’s ‘dividend heroes’
The Brunner Investment Trust - Brunner Investment Trust relishes its geographic diversity

Quick facts: The Brunner Investment Trust

Price: 751 GBX

LSE:BUT
Market: LSE
Market Cap: £320.62 m
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What it does

Brunner Investment Trust PLC (LON:BUT) has been around a long time and is a balanced fund focusing on income allied to capital growth.

Formed in 1929 by the Brunner family (who still own a 29% stake), the trust is managed by Matthew Tillett, Senior Portfolio Manager at Allianz, the trust’s manager.

At around sixty companies, it is a concentrated portfolio and to make the cut companies must meet thresholds of growth, quality and value, though some of the stocks are held largely for the income they produce.

ESG (environment, social and governance) is also becoming increasingly important and companies failing in this regard and not showing any signs of improvement are unlikely to be considered going forward.

Brunner has raised its dividend for 47 years on the trot with a notable 15% hike at the half-way point of the current year.

How it’s doing

In its half-year report in July, the company increased its interim dividend and said it will use its reserves to maintain payments while payouts from its portfolio recover after the coronavirus (COVID-19) disruption.

The trust's net asset value in the half-year to May declined by 5.9% to 890p due to the volatility caused by the pandemic, though there was a 33% drop in earnings as companies in the portfolio reduced dividends to preserve cash.

Brunner said it had revenue reserves equivalent to 27.6p at the end of May to continue to pay the dividend and sees payment expectations improving though recovery to former levels will take time.

The trust added that Microsoft was its best performer over the half-year as the resilience of the software giant’s corporate cloud revenues has provided a strong underpin to growth during this period.

Digitalisation has been a strong theme for the trust with other good performers including Ecolab a water management and hygiene business that has invested heavily into digital monitoring of its systems.

Visa, meanwhile, is a long-term beneficiary of the trend towards digital payments.

Brunner added that its healthcare holdings had also done well, notably Roche, which is manufacturing a highly automated test for COVID-19.

Inflexion points

  • Company has raised the dividend payment for 47 years consecutively.
  • Philosophy is concentrated on stock picking
  • Remit is wide and global

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on 11/5/20

2 min read