Out-of favour opportunities increase for Temple Bar

The trust targets long-term total returns in excess of the FTSE All-Share index.

Temple Bar Investment Trust (TMPL) targets long-term total returns in excess of the FTSE All-Share index. It invests mostly in constituents of the FTSE 350 index. TMPL’s annual report for the year to 31 December 2018 shows shareholders’ assets of £802 million. Its dividend has been raised every year since 1983.

Alastair Mundy, who heads Investec Asset Management’s UK Value team, has been manager since 2002. Peter Lowery, who has worked closely with him since 2003, is deputy manager.

Their strategy is to invest in companies that are deeply out of favour and therefore cheap relative to the team’s assessment of normalised earnings.

The universe of stocks increased last year, encouraging the managers to invest TMPL’s cash and move to a 9% geared position by the year-end. The resultant portfolio of 49 holdings was heavily weighted to banks, food and clothing retailing, and companies exposed to repair, maintenance and housing improvement. Precious metal investments accounted for 6%. Ongoing charges are low at 0.47%.

Net asset value and share price total returns were -11.2% and -9.7%, compared with a 9.5% fall from the FTSE All-Share index. Earnings per share increased by 14.3% to 49.5p and the total dividend, which is paid quarterly, was raised 10% to 46.72p. Revenue reserves equal 1.28 times the 2018 dividend.

TMPL’s returns have lagged the AllShare index, but over 10 years its NAV total returns are well ahead of the index and the trust made a strong start to 2019.

Visit templebarinvestments.co.uk

Graph showing Temple Bar returns

 

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