Fund Profile

Edinburgh Investment Trust 24 June 2024

Disclaimer

This is a non-independent marketing communication commissioned by Liontrust. 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.

Overview
EDIN’s new manager is off to a strong start…
Overview

In October 2023, James de Uphaugh and Chris Field announced their retirement, and Imran Sattar, an experienced manager at Liontrust whom they have worked closely with over the years, assumed the role of lead portfolio manager on 06/02/2024.

Moving forward, the message is one of continuity. Imran, much like his predecessors, determined early on in his career that a flexible investment style is crucial to perform in varying market environments, and this is something he has consistently applied to portfolios he has managed in the past. As such, the plan is to continue managing Edinburgh Investment Trust (EDIN) with the same approach, balancing quality stocks that he deems best placed to deliver strong total returns to shareholders over time. Despite his brief tenure, Imran has already made his mark on the Portfolio, by making several changes, including initiating a new position in a US-listed firm, Verisk Analytics. He believes Verisk offers good long-term growth prospects, filling a gap not met by UK companies in the data space.

However, Imran’s current optimism about his home market means that the portfolio’s exposure to overseas businesses, c.6%, is one of the lowest allocations in his career. He argues that specific UK headwinds are gradually abating, and UK equity valuations are at historically low levels. This has presented numerous opportunities on home soil and prompted him to add several new names to the portfolio, such as Autotrader and Rotork, and bolster some existing positions in the portfolio on weakness, including Dunelm.

Currently, EDIN trades at a 10.3% Discount, slightly above its five-year average and also wider than the AIC sector’s average of 5.9%.

Analyst's View

Imran Sattar, who was appointed manager officially in February of this year, worked closely alongside his predecessors for several years and has managed portfolios with the same focus over most of his career. As such, we would expect him to take a very similar approach with EDIN as the previous managers took. Having looked over Imran’s track record, it’s clear to us that this way of investing is his bread and butter, with the changes he’s made to EDIN’s portfolio so far falling into alignment with his total return ethos, i.e. identifying quality companies and blending those offering both capital and dividend growth together.

A six-month stewardship isn’t long, so we think it’s reasonable to expect some investors will need more time to gain confidence in the new manager’s ability. That said, we think Imran has made a strong start. The Portfolio changes he’s implemented continue to make EDIN a compelling proposition for investors seeking exposure to quality UK companies across diverse sectors and his focus on investing in companies with strong earnings growth potential should continue feeding into rising dividends over time.

Overall, we think EDIN is well-positioned to be a core holding for investors and note that the board has made good efforts to reduce the management fee, making EDIN more competitively priced within the UK equity income space (see Charges). Moving forward, we also see the potential for the discount to narrow further, particularly if Imran continues to outperform the index and deliver growing Dividends year-on-year, which would also provide an additional boost to shareholder returns.

Bull

  • Managers apply a total return ethos, balancing income and capital growth
  • Low OCF offers investors low-cost access to UK equities
  • No dogmatic style bias could mean the trust won’t be as impacted in periods of sharp style rotations

Bear

  • Structural gearing can magnify losses in a falling market, as well as gains in rising ones
  • EDIN’s dividend is lower than the sector average
  • The UK market offers little exposure to certain high-growth sectors, like technology
Continue to Portfolio

Fund History

17 Jul 2024 Balancing act
We ask why trusts with a more flexible approach have outperformed…
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...
29 Apr 2022 Five trusts to diversify your portfolio income
Join us next week for one live webinar with a different manager every day of the week – including the chance to ask questions - focused on different solutions for those seeking a decent income…
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 for investors according to the managers who joined us to discuss the outlook 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…
09 Jun 2021 Cool Britannia?
Join the team at Kepler Trust Intelligence and six leading UK fund managers as we examine the prospects for UK equities with COVID in retreat and Brexit uncertainty finally behind us…
13 Apr 2021 Fund Analysis
EDIN’s new management team continue to identify individual stock opportunities in the UK..
29 Jan 2019 Mark Barnett: the outlook for UK equities in 2019
With uncertainty over Brexit clouding the view, Mark Barnett, Invesco’s Head of UK Equities based in Henely-on-Thames, provides his investment outlook for 2019...
05 Nov 2018 Do politics matter?
With the pivotal US mid-terms looming, politics are front of mind for many investors - but should they be?
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 Is the UK keeping this investor awake at night?
Over a year on from taking over his UK equities trust mandates, Invesco's James Goldstone discusses his outlook for UK markets...
18 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...
08 Jun 2018 Mark Barnett: Business as usual?
Invesco Perpetual’s head of UK equities Mark Barnett examines the sectors where he is finding opportunities...
09 Mar 2018 Keep calm and carry on...
We examine the reaction of investment trust discounts amid recent market volatility...
20 Nov 2017 Thin ice...
Our analysis shows the extent to which funds in the UK equity income sector are concentrated on just a few dividend paying stocks…
07 Nov 2017 Fund Analysis
A large, well resourced UK equity income trust with a highly experienced manager and a clear focus on total return...
21 Jun 2017 Keystone Investment Trust
A top-performing UK equity trust that has recently undergone a change in managers...
12 Jun 2017 MAYDAY!
As the Conservative party founders, we examine the impact of last week’s disastrous election on trusts...
07 Jun 2017 Omnishambles...
Given the huge levels of political-induced uncertainty, we analyse recent drivers and themes within the UK equity market ahead of the upcoming election
30 May 2017 Income funds in focus
We introduce a new rating system designed by us to identify trusts which generate a real, dependable income without sacrificing capital....
11 May 2017 Storm proofing...
Our research shows dividend cover among UK equity income trusts is at its highest level in decade...
07 Dec 2016 Video: City Merchants High Yield Trust Limited
Rhys Davies discusses high yield bond opportunities, looking at what has been driving performance, alongside his approach and outlook.
06 Dec 2016 Video: Invesco Perpetual Select Trust Global Equity Income Share Portfolio
Nick Mustoe shares his thoughts on the Global Equity Income Share Portfolio of the investment trust, and gives his views on the regions and sectors he currently favours.
10 Sep 2016 Video: UK equities investment trusts update
John Richards, product director, UK equities, discusses the implications of the UK's referendum on membership of the European Union
09 Sep 2016 Video: Invesco Income Growth Trust
Fund manager Ciaraon Mallon discusses the portfolio and his approach to asset allocation...
06 Sep 2016 Video: Invesco Asia Trust
In this video Invesco Perpetual's Ian Hargreaves provides an economic outlook, and explains his approach to managing the portfolio...
05 May 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
03 May 2016 Video: Nick Mustoe
Invesco CIO Nick Mustoe explains his strategy on global equities...
11 Feb 2016 View from the top: Jim Pettigrew
We meet the chairman of one of the UK's largest investment trusts...
03 Feb 2016 Sector report: What lies beneath
Amid growing unease over the security of dividends we highlight a number of equity income trusts for a harsh environment...
View all

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