Fund Research

Lowland Investment Trust

Last update 13 June 2018

Veteran fund manager James Henderson has managed this trust since 1990, and was joined in late 2016 by Laura Foll as joint fund manager (she is currently on maternity leave until September 2018). Since James took the helm, the philosophy has been to 'grow the capital to grow the income' and this stock picking approach, along with the all-cap mandate, has meant the portfolio rarely ever resembles any benchmark.

The trust has a highly flexible approach – providing exposure to small and mid cap companies at certain periods in the cycle - and James has an excellent long-term performance track record. The objective differs from other equity income funds in that income is arguably less of a focus.

At times, the managers' stock picking approach has been out of favour. But the team has applied a consistent process, preferring 'quality' companies that have a unique or niche position in their market. With the bias towards mid to small cap stocks, the trust underperformed the market in 2016; however, the past two years have seen smaller companies rebound, and the trust has performed broadly in line with the benchmark. Over the longer term, the trust has delivered strong out-performance of the market.

Alongside NAV returns, the company’s revenues and dividend continue to increase. Last financial year, the board increased the dividend to 49p, an 8.9% increase over the previous year, as well as adding to the revenue reserves. We estimate that revenue reserves now stand at 0.75x the annual dividend. The trust yields 3.2%.

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Fund History: Lowland Investment Trust

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