Fund Profile

Edinburgh Investment Trust 13 April 2021

Disclaimer

Disclosure – Non-substantive Research

This is not substantive investment research or a research recommendation, as it does not constitute substantive research or analysis. With this commentary, Kepler Partners LLP does not intend to influence your investment firm's behaviour. 

Overview
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Overview

Edinburgh Investment Trust (EDIN) invests in UK equities in order to achieve capital growth and above inflation dividend growth. EDIN was managed by Invesco until March 2020, when the board handed the management contract to boutique firm Majedie Asset Management (MAM) after a beauty parade overseen by leading global consultancy Willis Towers Watson.

Lead manager James de Uphaugh and deputy manager Chris Field look to construct a diversified portfolio of between 40-50 stocks, adopting a ‘total return’ approach to stock analysis. Supported by the wider MAM investment team and with a team-based approach, James looks to ensure that stock-specific factors are the primary drivers of relative returns, though he will also input top-down considerations into stock analysis and portfolio construction. As we discuss under portfolio, the output is a portfolio that we would consider ‘core UK’ exposure, where significant divergence in returns are unlikely to be primarily driven by factor/style considerations.

Returns relative to the benchmark have improved over the past 12 months compared to the previous management regime though, as we discuss under performance, it remains early days. As noted under dividend, EDIN’s board has voiced its intention of maintaining dividends at the same level as the previous financial year going forward, and has substantial reserves available to support this. The historic yield on the share price is 4.8%.

EDIN’s discount of c. 4.6% (as at 31/03/2021) remains wider than that of the peer group average, but has narrowed significantly in recent months, with the board active in buying back shares.

Kepler View

EDIN’s yield of c. 4.8% looks attractive, backed as it is by significant reserves and with earnings seemingly remaining reasonably robust within the underlying portfolio. With the board seemingly committed to supporting this for at least the present financial year, we believe this can afford the management team flexibility in pursuing their ‘total-return’ investment style without needing to focus excessively on dividend generation. This seems attractive at the current time given the challenging macroeconomic backdrop and ‘dividend resets’ seen in much of the UK market, which is potentially giving rise to significant growth opportunities for many companies. Yet over the long-term, we believe this balanced, total-return focussed approach will likely see the dividend well supported, with James happy to collect dividends as a source of return where sufficiently attractive.

Active returns (relative to the FTSE All-Share) have been reasonably strong over the past 12 months under the stewardship of the new management team, though EDIN has trailed the broader peer group slightly. Whether this can be maintained remains to be seen, but significant outperformance since November 2020 suggests to us that the stated top-down views of the management team are feeding through to portfolio construction, whilst over the whole past 12 months we note the thematic diversity of stock contributors as an encouraging sign.

bull beAR
Attractive dividend yield backed by substantial reserves
With a stylistically diversified portfolio, may lag more style-driven peers at points in the cycle
Experienced manager with deep analytical resources backing him
Returns have improved relative to benchmark, but lagged peers during rally
Incorporation of ESG into different stages of investment process could appeal to ESG investors
Expensive fixed debt is not redeemable until September 2022
Continue to Portfolio

Fund History

24 Jun 2024 Fund Analysis
EDIN’s new manager is off to a strong start…
19 Jun 2024 None in, one out
We ask why companies are disappearing from public markets, and if it matters…
05 Jun 2024 Fast and FTSErious
With the FTSE 100 reaching record highs, is there still value on offer?
29 May 2024 Results analysis: Edinburgh Investment Trust
Stock selection has driven EDIN’s excess returns versus the FTSE All-Share…
22 Nov 2023 Results analysis: Edinburgh Investment Trust
EDIN continues to deliver impressive outperformance versus the FTSE All-Share…
25 Oct 2023 Fund Analysis
EDIN has delivered strong outperformance in its first three years under a new manager…
31 May 2023 Results analysis: Edinburgh Investment Trust
EDIN has delivered impressive outperformance since the new manager took over in March 2020…
24 May 2023 Five alternatives for income investors
Watch the presentations from our event focused on trusts delivering income via a diverse range of strategies…
16 May 2023 Edinburgh Investment Trust
James de Uphaugh
Rewatch this webinar from our online series in May 'Alternatives for income investors' hosted by the team at Kepler Trust Intelligence 15-19 May…
Watch Recording
30 Mar 2023 What I’m doing with my allowance this tax year
Two of our analysts debate whether to invest in punchier funds for the long term or take a more cautious view…
25 Nov 2022 Results analysis: Edinburgh Investment Trust
EDIN has outperformed over three years, doing particularly well under the new management team…
23 Nov 2022 Guns n’ roses
A sustainable future for the free world may depend on investments in weapons and oil as well as traditional ESG friendly assets…
16 Nov 2022 Bottom fishing
What can history tell investors about calling the bottom of a market?
01 Nov 2022 Fund Analysis
A new look, better-balanced EDIN portfolio has delivered strong performance…
31 May 2022 Five alternative trusts for income investors
Slides and audio from our event last week, featuring five trust managers discussing different strategies to deliver income for shareholders in challenging market conditions...
31 May 2022 Results analysis: Edinburgh Investment Trust
EDIN looks prepared to deliver during a tough economic period…
27 May 2022 Slides and Audio: Edinburgh Investment Trust
Download the presentation and listen to the audio from our 'Alternatives for income investors' virtual week from 26 May...
23 Feb 2022 Fund Analysis
EDIN looks leaner and meaner under its new manager and has outperformed since the takeover…
08 Jul 2021 London Calling
UK equities represent a ‘once in a generation’ opportunity according to the managers who joined us at our event last week…
07 Jul 2021 Slides and Audio: Edinburgh Investment Trust
Download the presentation and listen to the audio from our 'Cool Britannia' Summer conference on 01 July...
07 Jul 2021 Slides and Audio: Roundtable - The outlook for UK plc
Download the presentation and listen to the audio from our first roundtable discussion with James Henderson, James de Uphaugh and Rory Bateman...
23 Jun 2021 Time to back Britain?
After a challenging period for the United Kingdom, we wonder if it could be the most exciting market on a five-year view…
13 Apr 2021 Fund Analysis
EDIN’s new management team continue to identify individual stock opportunities in the UK..
10 Mar 2020 Kepler Spring Conference: presentations and audio
Audio and presentations from our spring conference at The May Fair Hotel last week…
08 Aug 2019 Mark Barnett: Q&A
Invesco's Head of UK Equities Mark Barnett talks through his outlook for the UK economy...
30 Jan 2019 The Income Portfolio
We reveal our investment trust picks for a mixture of income and capital growth...
16 Oct 2018 The Investment Trust Advantage
Our recent conference for discretionary fund managers saw some of the UK's leading fund managers discussing the outlook for the world's major regions and asset classes...
03 Oct 2018 We can be heroes
Our analysis has uncovered the trusts which have generated a solid income through thick and thin - without compromising other aspects of performance...
26 Jul 2018 Fund Analysis
A large UK focused investment trust with a strong long-term record trading on a deep discount thanks to an out-of-favour style...
26 Jul 2018 Mark Barnett: Finding opportunity in financials...
Mark Barnett highlights the UK’s alternative finance market, which has caused disruption to the traditional forms of credit since the Great Financial Crisis...
25 Jul 2018 The Bulletproof Income Portfolio
Our Bulletproof Income Portfolio was set up to illustrate the benefits of investment trusts in providing a stable income...
25 Jul 2018 The Endurance Growth Portfolio
The purpose of the Endurance Growth Portfolio is to generate long-term capital growth with a bias towards quality and defensive characteristics...
23 May 2018 Causing disruption: tobacco and the next generation
Mark Barnett explores the impact of next generation products on the tobacco industry...
11 Apr 2018 Mark Barnett: A stock-pickers approach to managing the macro
Invesco Perpetual's Head of UK Equities gives his upbeat view on Brexit, discusses the trajectory of interest rates, and outlines the investment ideas he sees in this environment...
22 Nov 2017 A stock picker’s approach to managing the macro
Mark Barnett, Head of UK Equities at Invesco Perpetual, discusses the risks and opportunities facing the UK Equity market
24 May 2017 Fund Analysis
22 Feb 2017 Fund Analysis
21 Feb 2017 Digging in
The Bulletproof Income Portfolio enters 2017 with increased dividend cover at a time when a defensive income seems more precious than ever...
20 Apr 2016 Mark Barnett: Two distinct routes to a sustainable income
Contrasting portfolio construction of The Edinburgh Investment Trust plc and Perpetual Income and Growth Investment Trust plc offers choice to income-seeking investors
26 Jan 2016 Top picks from four leading brokers for 2016
We examine the key recommendations for individual trusts from our panel of the City’s leading analysts.
26 Jan 2016 Dodging bullets
The Bulletproof Income Portfolio performed well in a turbulent 2015, the perfect year to test its strengths...
01 Dec 2015 Model Portfolio update: Empiric, Edinburgh and RIT Cap...
The latest insight into developments across our three model portfolios...
05 Jun 2015 Fund Analysis
05 Jun 2015 The Bulletproof Income Portfolio
Six investment trusts with income credentials to die for.
View all

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