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Fund Profile


Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by Brunner. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

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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.

Analyst's View

We believe BUT offers investors a measured approach to global equity investing, avoiding many of the mega-cap names which dominate global equities. Thanks to this BUT could easily diversify an existing global equity allocation, or even act as a single stock allocation thanks to its balanced portfolio and compelling income potential. What we find exceptionally impressive is that BUT’s total return has managed to remain competitive with the wider AIC global sector, despite its dual objective of capital and dividend growth.

As global markets begin to be weaned off the immediate tailwinds of the pandemic recovery, we expect successful stock picking to return to prominence as markets will be driven less by momentum and more by individual stocks. In a similar manner we think the quality factor, which BUT’s portfolio has a clear tilt towards, may have an increasing premium attached to it as investors may value strong balance sheets and business models more than they will style or thematic factors.

BUT’s current discount is also very interesting given that it is largely the result of a one-off sell down by a major institutional investor, who over the last seven months has sold their entire c. 17% stake (see discount). Now that this overhang has cleared, we see no reason for the current discount to persist.

Balanced approach to global equities with good diversification potential
Can underperform in growth or momentum driven markets
Historically wide discount offers good entry point
Moderate gearing can amplify losses on the downside
Strong 12-month performance despite avoiding many mega cap tech names
Investment process restricts access to low and zero dividend payers
Continue to Portfolio

Fund History

24 Apr 2024 Fund Analysis
BUT has outperformed its composite benchmark for the fifth consecutive financial year…
03 Jan 2024 Probably better asking an octopus
Our investment trust experts uncurl a tentacle each and choose their ‘top picks’ for 2024…
06 Oct 2023 Are you ready for your closeup?
We explain how the professionals go about building a peer group…
22 Aug 2023 Fund Analysis
BUT’s all-weather portfolio has consistently generated strong performance…
11 May 2023 Tipping point
Battered growth strategies have staged a comeback recently, but what happens now?
25 Jan 2023 Fund Analysis
BUT’s wider-than-average discount may present a buying opportunity, given its long-term consistent performance…
10 Nov 2022 Light at the end of the tunnel
Our speakers struck an optimistic note this week as we considered the prospects for investors at the end of a difficult year…
10 Nov 2022 Slides and Audio: Brunner
Download the presentation and listen to the audio from our webinar from 8 November...
17 Aug 2022 The world for sale
While investment trusts are lagging their open-ended cousins in the global sector, their discounts may provide an attractive entry point...
13 Jul 2022 Ready player one
We wonder where, if anywhere, should investors look for returns after a tumultuous first half of the year…
20 May 2022 Is it time to ditch index funds?
Averaging out makes sense in a boom market but may be much riskier in the future…
11 May 2022 Fund Analysis
BUT trades at an attractive discount despite ranking as one of the top-performing global equity trusts over the past 12 months…
15 Mar 2022 Do you have to sacrifice income for growth?
Brunner proves that investors don’t have to make a binary choice between the two…
10 Feb 2022 A healthy contribution
An aging planet and more spending on healthcare may put wind in the sails of Brunner’s portfolio…
02 Feb 2022 In safe hands
A decade long bull market and the seemingly unstoppable rise of tech stocks have made it easy to forget that good investing usually involves slow and steady gains…
19 Jan 2022 Apples and pears
We examine the relationship between the demand for open- and closed-ended funds, and ask whether investor behaviour can be predicted...
01 Dec 2021 Managing money through a tumultuous cycle
A clear focus on stock selection has helped the team at Brunner navigate a tumultuous year for both value and growth investors…
10 Nov 2021 Fund Analysis
BUT has generated strong returns over 2021 but still trades at a potentially attractive discount…
28 Jul 2021 Income for the ages
By focusing on balancing both income and growth, Brunner’s dividend has weathered the market storms better than many…
16 Jun 2021 A better class of travel*
Sharing many features of a traditional family office, investment trusts offer ordinary investors a cost-effective solution to managing family wealth...
25 May 2021 Quality growth, growing income, discounted price
A key advantage of the investment trust structure is the opportunity to buy well-regarded funds at discounted prices. Here, we explore one of them in depth…
05 May 2021 Fund Analysis
BUT trades at a historically wide discount, despite recent competitive performance and 49 years of dividend increases…
11 Nov 2020 Fund Analysis
Trading at the widest discount in the AIC Global sector, BUT offers a balanced portfolio of global growth opportunities…
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