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BUT offers global equity exposure without heavy reliance on the US…
Brunner Investment Trust PLC
BUT has consistently outperformed its benchmark over the past five years…
BUT has outperformed its composite benchmark for the fifth consecutive financial year…
Edison Investment Research is terminating coverage on The Brunner Investment Trust (BUT). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our website.
The Brunner Investment Trust (BUT) has two co-managers, Christian Schneider (CIO global growth) and Julian Bishop (global growth specialist), who are supported by deputy managers Simon Gergel (CIO UK equities, UK dividend and value specialist) and James Ashworth (global growth specialist). BUT may be considered as a ‘fund for all seasons’ given its steady outperformance in recent years in widely different market environments. The trust’s NAV performance also stands out positively compared with its 12 peers in the AIC Global sector, ranking first over the last three years, second over the last five and fourth over one year. BUT’s dual mandate of both income and capital growth and its straightforward portfolio of listed global equities may be an ideal way for investors to gain exposure to overseas companies.
The Brunner Investment Trust’s (BUT’s) two co-managers, Christian Schneider (deputy CIO global growth) and Julian Bishop (global equity specialist) are supported by deputy managers Marcus Morris-Eyton (European equity specialist) and Simon Gergel (CIO UK equities). BUT can be considered as a global equity fund for all seasons given its steady trend of outperformance in recent years despite volatile share prices and changes in stock market leadership. The trust stacks up well in both absolute and relative terms with double-digit annual NAV total returns over the last decade and above-average returns within the AIC Global sector over the last one, three and five years. BUT’s dual mandate of income and capital growth means it should appeal to a broad range of investors.
BUT’s all-weather portfolio has consistently generated strong performance…
The Brunner Investment Trust (BUT) is led by a very strong team at Allianz Global Investors (AllianzGI). Its two co-managers, Christian Schneider (deputy CIO Global Growth) and Julian Bishop (global equity specialist), are supported by deputy managers Marcus Morris-Eyton (European equity specialist) and Simon Gergel (CIO UK Equities). The trust has notably outperformed its benchmark over each of the last four financial years despite significant market rallies and falls and periods of growth and value stock leadership. BUT’s NAV total return is above the average of the 13 funds in the AIC Global sector over the last one, three and five years (ranking second over three years). The trust has delivered 51 consecutive years of higher dividends plus capital growth for investors.
BUT’s wider-than-average discount may present a buying opportunity, given its long-term consistent performance…
The Brunner Investment Trust (BUT) has welcomed another experienced manager into its team. Julian Bishop joined Allianz Global Investors (AllianzGI) on 1 November 2022, following the departure of Matthew Tillett. He is working alongside BUT’s lead portfolio manager, Christian Schneider, and deputy portfolio managers Marcus Morris-Eyton and Simon Gergel. Schneider says that the trust has a key focus on quality, with the team aiming to outperform BUT’s global/UK composite benchmark in all market environments. The trust is on track for its 51st consecutive year of higher annual dividends and currently offers a 2.1% yield.
The Brunner Investment Trust’s (BUT’s) lead manager is Matthew Tillett at Allianz Global Investors. He is ‘delighted’ by the fund’s relative performance so far in 2022, given elevated levels of share price volatility, and points to the balanced investment approach whereby the portfolio is not overexposed to a single factor within the global stock market. He has taken advantage of this volatility to improve the growth profile of BUT’s portfolio as he has been able to invest in some high-quality companies whose valuations would normally be considered prohibitive for the fund, including US software developer Adobe. BUT’s board has just announced the FY22 first interim dividend, which is 9.6% higher year-on-year despite the challenging market backdrop, and it highlighted the trust’s healthy revenue reserves and portfolio income that is comfortably above pre-pandemic levels.
Brunner (BUT) has retained its balanced, ‘core’ style of investing even through today’s difficult markets. BUT is managed by Matthew Tillett, who follows a process which places the greatest weight on the ‘quality’ factor. He is supported by Christian Schneider and Marcus Morris-Eyton two leading Portfolio Managers in the AllianzGI Global Equity team. Thanks to BUT’s global remit the team can invest across the entire market spectrum, with BUT’s portfolio capturing both the value and growth ends of the market. As a result, BUT’s portfolio is well diversified across multiple factors, including geography, sector, and style.
The Brunner Investment Trust’s (BUT) lead manager is Allianz Global Investors’ (AllianzGI) Matthew Tillett, who is supported by deputy managers Christian Schneider and Marcus Morris-Eyton. The trust has had three consecutive financial years of outperformance versus its benchmark, a time that has included significant market rallies and setbacks, along with periods of growth and value stock leadership. BUT’s managers invest for the long term, focusing on high-quality, reasonably priced growth companies. Following a period of improved relative performance, the trust’s NAV total return now ranks second out of 17 funds in the AIC Global sector over the last 12 months, is above average over the last three years and is broadly in line over five years.
Brunner Investment Trust (BUT) offers investors a balanced portfolio of global equities, with the dual objectives of capital and income growth. BUT’s lead manager is Matthew Tillett, with two other experienced Portfolio Managers contributing slightly different styles and areas of expertise to the Trust, helping Matthew create a diversified and balanced portfolio. BUT is not an expensive ‘quality growth’ strategy, nor is it a pure ‘value’ fund. Instead, the process balances companies’ quality, growth, and valuation factors, leading to a concentrated portfolio of distinct companies. These include global giants like Microsoft, alongside smaller companies like SThree, a small-cap UK recruitment firm. We note that BUT also contains a structurally high allocation to the UK, which has increased as a percentage of the portfolio in recent months due to the strong relative performance from their investments here. We cover BUT’s process in more detail in our Portfolio section. BUT has demonstrated strong recent performance, where over the last 12 months it has outperformed both its benchmark and its peers, ranking as one of the best global equity strategies over the period. Importantly, this performance has been generated entirely through stock selection rather than sector allocation, indicating the managers’ success as bottom-up stock-pickers. However, BUT has underperformed the peer group over the last five years, although we note that this is due in large part to the structural overweight to the UK in the benchmark rather than due to the managers’ active decisions. BUT’s relative performance is also due in part to the team’s comparative risk profile, whereby they take a more risk-conscious approach to investing than many of their more aggressive peers. BUT has one of the longest track records of consecutive Dividend increases of any investment trust, currently standing at 49 years, with its current dividend underpinned by a portfolio of companies whose strong current and future earnings potential lends itself to a sustainable income stream. BUT currently trades on a 8.9% discount, though this represents a narrowing from its discount at the start of the year.
The Brunner Investment Trust (BUT) is managed using a team-based approach. Lead manager Matthew Tillett at Allianz Global Investors (AllianzGI) is supported by deputy managers Christian Schneider and Marcus Morris-Eyton. The trust has delivered encouraging outperformance following the Q120 COVID-19 induced sell-off, with the managers continuing to focus on high-quality, reasonably priced growth companies, and employing a long-term investment approach. As shown in the chart below, the trust has a long-term record of outperformance with NAV and share price total returns ahead of the benchmark over the last one, three, five and 10 years.
A family office, particularly after the year we have just had, means different things to different people. For the less fortunate, it’s the kitchen – where mum and dad spent a large part of last year at the same table, each trying to block out the noise of the other’s zoom meeting while the children smeared peanut butter on the dog. In the more traditional – and entirely more desirable – sense, the term family office covers a range of multi-faceted organisations which, at their core, provide professional assistance with wealth management, and a very high level of personal service. Deloitte has come up with six broad objectives or functions that a family office should have.
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The Brunner Investment Trust (BUT) is managed by Matthew Tillett at Allianz Global Investors (AllianzGI), along with deputy managers Christian Schneider and Marcus Morris-Eyton. Tillett is confident that the trust’s shares can trade at a narrower discount to NAV following the exit of a major shareholder, which had acted as an overhang since 2016. He suggests that ‘now is a great opportunity to buy a solid reliable trust that has delivered good performance over the long term’. The manager says that BUT has a ‘philosophy and process that is tried and tested’ with the fund offering investors ‘high quality, large, liquid companies at attractive valuations’. He believes that the trust is well positioned to benefit in an environment where investors place a greater emphasis on the quality and strength of company fundamentals.
Brunner Investment Trust (BUT) offers a ‘one-stop shop’ for equity investors with its managers taking a balanced approach to investing in high quality companies, with a dual mandate of both capital and dividend growth. Their bottom-up stock selection focusses on identifying global blue chip companies which are able to provide long-term growth without commanding an excessive valuation. While COVID-19 has been a difficult year for many income paying companies, the team remark that their quality bias has allowed their holdings to remain resilient over the crisis, with any reduction to the trust’s underlying income being only a short-term phenomenon. The team expect many of their holdings to bounce back sharply, especially as they foresee the quality factor outperforming once the impact of and recovery from COVID-19 ceases to drive markets. BUT has a strong long-term track record of performance, having outperformed its benchmark over the last five years (see performance section). Over the last 12 months it has managed to generate returns ahead of its benchmark and only marginally behind its peers despite not owning many of the mega cap tech names which drove much of the post-crash recovery. The team have also continued to reduce their weighting to the UK, aligning the portfolio to a more global allocation. 2020 marks BUT’s 49th year of consecutive dividend growth, one of the longest records of any investment trust, qualifying it as one of the AIC’s dividend heroes. Despite its competitive performance and enviable dividend history, BUT trades at a 12.4% discount, after a major shareholder sold down its stake, as we discuss in the discount section.
The Brunner Investment Trust (BUT) is managed by Matthew Tillett at Allianz Global Investors (AllianzGI), working alongside deputy managers Jeremy Kent and Marcus Morris-Eyton. All three have positive track records in other funds that they manage, and bring complementary skillsets to the table. Tillett highlights the trust’s quality bias and diverse income stream, which is less dependent on the UK than it used to be. This has been beneficial in 2020 as domestic dividend cuts have exceeded those in other markets, and has helped BUT extend its long-term record of outperformance, particularly versus the broad UK market.
Brunner Investment Trust (BUT) offers a ‘one-stop shop’ for equity investors. The managers look for quality growth opportunities across the globe, but with a focus on the price they pay for that growth. BUT’s portfolio is stylistically balanced and aimed at delivering consistent returns throughout the cycle. The managers achieve this blend through a purely bottom-up approach, analysing the quality, growth and valuation characteristics of companies to create a portfolio of 60-80 holdings. BUT’s lead manager changed in May 2020, with Lucy Macdonald being replaced by her deputy, Matthew Tillett. Alongside Matthew, Jeremy Kent and Marcus Morris-Eyton have also joined the team as co-managers from other teams at Allianz. However, there has been no change to the process or approach, and the managers draw on the extensive resources of Allianz, as discussed in the Portfolio section. The trust has outperformed its benchmark in three of the last four years. It has nonetheless lagged its peers in the medium to short term, principally due to its overweight position in the UK and underweight position in the US relative to the rest of the sector. However, as discussed in the Performance section, the trust has rebounded strongly from the coronavirus crash. BUT is one of the standout trusts in the investment trust universe for dividend growth track records, having increased its dividend for the past 48 years. It currently yields 2.5%. Last year’s dividend was covered 1.3x by revenue reserves, meaning there should be some support in a difficult year for dividends. The current discount of around 10.9% is one of the highest of those of conventional trusts in the AIC Global sector.
The Brunner Investment Trust (BUT) is now managed by Matthew Tillett at Allianz Global Investors (AllianzGI), who worked closely with his predecessor Lucy Macdonald as co-manager on the fund for four years, with a particular focus on income generation. He is able to draw on the well-resourced investment team at AllianzGI, including BUT’s new deputy managers Jeremy Kent and Marcus Morris-Eyton. Tillett says BUT offers a balance between growth and income, having provided investors with consistent capital appreciation over the long term, pays an attractive yield and has a distinguished record of 48 years of consecutive annual dividend increases. He believes we are in an exciting part of the cycle, where there are extremely interesting investment opportunities for those with a disciplined approach.
The Brunner Investment Trust (BUT) is managed by Lucy Macdonald at Allianz Global investors (AllianzGI). Important developments for the trust in recent years include a move to a single global rather than discrete UK and overseas portfolios; a more global benchmark; better investment performance; an improved capital structure; and a more diversified share register. The manager believes that versus its peers, BUT’s relative headwinds (due to having less exposure to the most highly valued tech stocks and more to the UK) are dissipating. She says that having both an income and capital growth objective in a more volatile, lower-return environment ‘is probably not a bad thing’. Macdonald argues that BUT offers a more balanced style at a time when growth looks very expensive versus value; she describes the trust as a portfolio ‘for all seasons’.
The Brunner Investment Trust (BUT) has been sole-managed by Lucy Macdonald at Allianz Global Investors (AllianzGI) since June 2016. She says that following the trust’s refinancing of its high-cost debt in 2018, there is increased flexibility to focus on higher-conviction, more interesting quality growth names, without needing to invest in higher-yielding companies in order to cover BUT’s dividend. The manager notes that despite this shift in focus, the fund’s portfolio yield remains in line with that of the benchmark and the trust has a high level of revenue reserves, equivalent to c 1.5x the last annual dividend payment.
The Brunner Investment Trust (BUT) is now a much more focused global equity proposition compared with mid-2016: there is a single manager, running a single portfolio (rather than one UK and one overseas), performance has improved and the board has paid off the trust’s longstanding, high-cost debt. Manager Lucy Macdonald believes that the investment cycle is mature, characterised by peak levels of liquidity, earnings growth and equity valuations, suggesting investors should gravitate towards quality companies that can generate above-average returns on investment. BUT has a distinguished dividend track record; its annual distribution has increased for the last 46 consecutive years.
The Brunner Investment Trust (BUT) has recently announced a refinancing of its second (and last) tranche of high-cost debt (£28m). It placed a £25m note at a record low rate of 2.84% for 30-year debt, made possible due to declining UK government bond yields as a result of recent political concerns in Italy. The remaining £14.4m costs (including accrued interest) to repay the debt will be financed by existing assets and bank debt, and will meaningfully lower BUT’s overall weighted average interest costs from 7.7% to 2.9% pa. Manager Lucy Macdonald describes this as an exciting development, as it will allow the trust to have a more efficient balance sheet and provides greater flexibility to increase the dividend in real terms. Coupled with the lower cost of debt, a potentially higher yield could lead to a narrowing in the trust’s discount. BUT has a distinguished distribution track record, growing dividends for the last 46 consecutive years.
The Brunner Investment Trust (BUT) aims to generate long-term growth in capital and income from a portfolio of high-quality global equities. Over time the exposure to overseas stocks has increased, providing a broader opportunity to generate income and capital growth, and the number of holdings has been reduced. Since June 2016, BUT has had a single manager, Lucy Macdonald, who has refined the UK stock selection process in line with that for overseas companies. Under her sole tenure, the trust has outperformed the composite benchmark by more than 4pp. BUT has a distinguished record of dividend growth; annual dividends have increased for the last 45 consecutive years and the current yield is 2.3%.
The Brunner Investment Trust (BUT) is a well-established fund investing in a relatively concentrated portfolio of c 70 global equities, aiming to generate long-term growth in capital and income. Over time, the number of holdings has been reduced and the proportion invested in overseas equities has increased. Lucy Macdonald has been sole manager since June 2016, and now uses her bottom-up stock selection process to invest in both UK and overseas companies. BUT’s style balance between growth and value stocks meant that relative performance was maintained during a significant market style shift from growth to value stocks in Q416. BUT has increased its annual dividend in each of the last 45 consecutive years; its current yield of 2.3% compares favourably with its peer group.
The Brunner Investment Trust (BUT) invests in a concentrated global equity portfolio aiming to generate long-term growth in capital and income. Over time the number of stocks has been reduced, resulting in 70 high-conviction holdings selected for their strong fundamentals and attractive valuations. Since June 2016, BUT has been solely managed by Lucy Macdonald. Dividends are paid quarterly; BUT has a progressive policy and annual dividends have increased for the last 44 consecutive years. The current dividend yield of 2.7% compares favourably with sector peers.
The Brunner Investment Trust (BUT) began life as a vehicle for managing the wealth of one of the founding families of ICI, a role it continues to fulfil, as well as offering other investors access to its diversified portfolio of global equities. Managed by Allianz Global Investors (AllianzGI), it seeks to achieve long-term capital and income growth, and has grown its dividend (which has been paid quarterly since 2014) for 43 years in a row. The bottom-up investment process makes extensive use of AllianzGI’s global research resources, and the managers are increasingly focused on increasing the portion of the trust’s dividend yield (one of the highest in its sector) that comes from overseas. Expensive gearing has historically been a headwind, but this will begin to abate from January 2018.
