Temple Bar Investment Trust’s chairman has said the vehicle’s performance in 2015 was disappointing, but he felt the approach taken by management would reap rewards in the long run.
John Reeve said it was always disappointing when the trust endured periods of underperformance but added this was a natural consequence of the vehicle’s chosen investment style which “much favours a longer-term standpoint.”
The investment trust company’s results for the year ending 31 December 2015 showed the total return on net assets was minus 1 per cent, compared with a total return for the FTSE All Share Index of 1 per cent.
The trust’s top five holdings as at the end of 2015 were UK Treasury at 8.6 per cent of the portfolio, HSBC at 8.4 per cent, GlaxoSmithKline at 6.7 per cent, BP at 6.5 per cent and Royal Dutch Shell at 5 per cent.
Mr Reeve said: “There is no getting away from the fact that the last few years have been an uncomfortable time for committed adherents of the value investing approach.
“While in relative terms our portfolio has suffered as a consequence, investment is a long-term matter and I am reassured that many of our shareholders appear to understand this.
“They appreciate that the value investment style is inherently cyclical but that, if one is patient and adheres to this approach, eventually some great opportunities will arise.
“Clearly, we hope that this occurs sooner rather than later, but if needs be we will remain patient before investing any of the surplus cash currently held on the portfolio.”
Throughout 2015, the company paid dividends to shareholders on a quarterly basis, making three interim dividend payments of £7.93 a share with directors recommending a dividend of £15.87 to be paid on 31 March.
This would bring the total dividend to £39.66 for the year.
Adviser View
Laith Khalaf, senior analyst at Hargreaves Lansdown, said: “The trust has high exposure to troubled areas of the market such as oil and gas, financials and industrials.
“Investing in unloved areas of the market is part and parcel of the value approach. These sectors may well recover in time, but it’s likely to be a choppy ride.”
