The Bankers Investment Trust (BNKR) has recently moved from a slightly geared to a small net cash position, as manager Alex Crooke seeks to lock in gains and await a more favourable re-entry point. The global fund is run as a collection of regional portfolios, with an overall tilt towards a value style of investment, although this varies from one sub-portfolio manager to another. Over 12 months to end-September almost all the regional portfolios have outperformed local indices, with the exception of the UK and the small and now largely liquidated non Asian emerging markets allocation. BNKR invests for both capital and income growth, and is on track to grow its dividend by c 6% for FY19 (ended 31 October), a 53rd consecutive annual increase.
Although many of the world’s equity markets have enjoyed a decade-long bull run since the end of the global financial crisis, monetary policy remains supportive of further gains, given the low returns available on assets such as bonds and cash. However, with risks from both unstable geopolitics and historically high valuation multiples, investors may prefer a globally diversified portfolio of stocks chosen for their attractive valuations as well as growth and income potential.
Long-term record of good total return performance in varied market conditions.
Experienced manager (Alex Crooke, since 2003) overseeing specialist managers of relatively concentrated regional sub-portfolios, with bias to value and income.
On track for 53 years of consecutive annual dividend increases, with 8% compound annual growth over last 20 years.
Flexible approach to gearing; small net cash position reflects manager caution but also gives the scope to take advantage of any market dislocations.
At 13 December 2019, BNKR’s shares traded at a 0.9% premium to cum-income NAV. The discount has historically been quite tight, with averages over one, three, five and 10 years ranging from 1.8% to 5.5%; the current level is close to the 12-month high premium of 1.1%. BNKR’s 2.1% dividend yield is above the average of its peers, and the board targets annual increases ahead of RPI inflation.