Brunner Investment Trust PLC (LON:BUT) outperformed its benchmark over the past six months with net asset value (NAV) rising 11.4%.
NAV per share at the end of May 2021 was 1,087p (976p) or a 9.3% discount to the share price. This compared to an average of 13.4% over the six months.
Brunner raised the dividend by 0.6% and said it intends to pay 20.15p this year to November. It will be supported by the dividend reserve if required.
Matthew Tillett, the trust’s manager from Allianz Global Investors, said as markets look beyond Coronavirus (COVID-19) inflation has become a growing concern.
In his view, however, the macro-economic environment is perhaps less deflationary than it was during the previous decade but is not yet an outright inflationary one.
“From an investment perspective, we believe owning quality companies on sensible valuations provides the best defence against a volatile and unpredictable inflationary environment.
“Such business models typically enjoy strong pricing power making them well equipped to pass on the impact of higher costs to their end customers whilst protecting their own profitability.
“In contrast, highly capital-intensive business models may suffer as they grapple with cost pressures and rising capex bills.
“Very highly valued growth stocks that are extremely sensitive to interest rates may also suffer if interest rates rise along with inflation.
“The trust's portfolio has a strong bias towards quality, whilst also having a keen eye on valuation, and is therefore well-positioned to deal with inflation should it arise.”
Tillet added that during the six months, the trust sold its positions in ITV (LON:ITV) and Citigroup, with the proceeds invested into RelX, Fleetcor and IG Group among others.
Lock maker and security products group Tyman was the best performer.