Edinburgh Investment Trust: Strong annual result amid 'early stages' of market recovery

The 134-year-old Edinburgh Investment Trust has notched up a benchmark-beating annual performance and flagged the prospect of greater market stability.

The trust, one of Scotland’s oldest, said its net asset value (NAV) per share, with debt at fair value, on a total return basis increased by 7.9 per cent in the year to the end of March, compared with a 2.9 per cent return on the FTSE All-Share Index. A final dividend of 6.7p was proposed. Dividends were up 5.6 per cent compared with the previous year, equivalent to a yield of 4 per cent. Stocks in the portfolio include Greggs, NatWest and Weir.

Since James de Uphaugh became fund manager in March 2020, the cumulative NAV return of 65.9 per cent and the share price return of 75.5 per cent have outperformed the FTSE All-Share return of 47.4 per cent.

De Uphaugh, of asset manager Liontrust, said: “It is now just over three years since we became the manager of the company. We took over in the midst of the market sell-off in March 2020, as the full implications of the Covid pandemic began to dawn. Since then, our investment approach has helped us deal with an at times rapidly changing economic and market backdrop.

“The better recent returns from the UK equity market strike us as the early stages of a recovery in the market. This recovery is rooted in the undervaluation of UK equities that has built up over time and we remain optimistic about the specific prospects for the company’s holdings. Overall, 2023 could see lower inflation, peaking interest rates and perhaps a slightly better tenor from the consumer.”

Trust chair Elisabeth Stheeman said: Together with my fellow directors, and the company’s manager, we have continued to build on the strengthening investment track record to position the company as a core holding for long-term savers. It has been another encouraging 12 months for the company’s investment returns. Growth in both the NAV and the share price comfortably exceeded the FTSE All-Share Index. Despite the ever-uncertain economic outlook, there is enthusiasm about the underlying prospects for the stocks in the company’s portfolio.”