We’re currently experiencing extremely high call volumes. We’re very sorry for any inconvenience this might cause.

If you need help with your account, please visit our Help Centre, or email us and we’ll get back to you as soon as we can. For more information and tips on managing your account online please visit www.hl.co.uk/coronavirus

We’re experiencing high call volumes, please check FAQs before calling.

Skip to main content
  • Register
  • Help
  • Contact us
  • Log out of your HL account

Bankers Investment Trust – bolstered by the biggest economies

Jonathon Curtis, Investment Analyst, reports on Bankers Investment Trust’s annual results for the year to 31 October 2019.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

  • Investments in US and Chinese companies benefited the trust
  • NAV and share price total returns of 12.1% and 13.5%, respectively
  • An expected 6% increase in total annual dividends to 20.9p

Bankers Investment Trust is run by Alex Crooke with the support of an experienced team from Janus Henderson. Crooke aims to deliver growing income and capital by investing in companies from around the world. Most of those are developed countries such as the US, the UK and Japan. He also invests in some from emerging markets, as well as some smaller companies, both of which are higher risk. The trust could provide some global diversification for an income-focused portfolio.

Since Crooke took over the trust in 2003 he’s delivered a 532.7%* return in share price terms, compared with 415.5% for the FTSE World index. Remember past performance isn’t a guide to future performance. He’s also continued the trust’s impressive dividend record, by increasing the income paid to investors every year he’s been at the helm, although that’s no guarantee of future income.

The manager can use derivatives to help him invest, and gearing (borrowing to invest) which could increase gains but also magnify losses. Derivatives and gearing both add risk. Potential investors should refer to the Key Investor Information and latest annual reports and accounts for details of these risks along with the charging structure.

How’s the trust performed?

The trust performed well in the 12 months to 31 October 2019. Its net asset value (NAV) rose 12.1% compared with the FTSE World index’s 11.7% return. These figures don’t indicate future performance. The trust’s share price also climbed 13.6%, as the discount narrowed. It currently trades at a marginal 0.2% premium.

Despite the ongoing trade spat between the US and China, companies from the world’s two largest economies provided some of the trust’s strongest returns. The manager doesn’t invest as much in the US as the global stock market average though, so this limited the gains slightly as the US has been one of the strongest performers. Investing more in the UK than the global stock market also held back returns, as the UK didn’t do as well as the rest of the world during the period.

A final quarterly dividend of 5.35p has been proposed, which if approved will make a total annual dividend of 20.9p – a 6% increase on the prior period. Remember dividends are variable and aren’t guaranteed.

Annual percentage growth
Jan 15 -
Jan 16
Jan 16 -
Jan 17
Jan 17 -
Jan 18
Jan 18 -
Jan 19
Jan 19 -
Jan 20
Bankers Investment Trust -0.9% 13.4% 12.3% -5.7% 15.0%
FTSE All-Share -4.6% 20.1% 11.3% -3.8% 10.7%

Past performance is not a guide to the future. Source: *Lipper IM to 31/01/2020

What’s changed in the portfolio?

Crooke thinks valuations are high in most major stock markets, and so he took the opportunity to take some profits by selling some investments that had performed well. These included Chinese companies Chongqing Brewery and Jiangsu Hengrui Medicine. He reinvested in Chinese companies he thinks looked better value, including Shenzhen Airport, consumer staples company Angel Yeast and medical equipment maker Lepu Medical.

Crooke didn’t think Latin American and African companies had made a significant difference to returns, and so decided to sell them all. He’s reinvested most of the proceeds into other regions, but it’s taken longer than he expected to find attractive opportunities.

Manager’s outlook:

Crooke thinks share prices have risen more than company profits, meaning share prices are now too high in some cases and may not have much room for future growth. Even so, he’s positive on the broader outlook for shares. He expects US trade resolutions and easing Brexit uncertainty to help company profits. He believes central bank support for the markets and low interest rates are here to stay for at least a little while longer. He also thinks the enormous piles of uninvested private equity money will be put to use shortly too. All these things could have a positive impact on stock markets, but Crooke has committed to remain focused on valuations, however rosy the outlook.

Find out more about this Trust including charges

Key Investor Information


Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

Daily market update emails

  • FTSE 100 riser and faller updates
  • Breaking market news, plus the latest share research, tips and broker comments
Register

Related articles

Category: Investment Trusts

Two investment trusts that don’t cost the Earth

2019 was the year sustainability and ESG went mainstream. In this article, we take a closer look at two investment trusts with very different approaches to investing responsibly.

Dominic Rowles

04 Mar 2020 3 min read

Category: Investment Trusts

Alternative investments: A look at private equity

Buying stock market shares isn’t the only way to invest in companies. Jonathon Curtis explores the risks and potential rewards of private equity investing.

Jonathon Curtis

18 Feb 2020 3 min read

Category: Investing and saving

Alternative investments: Spotlight on property

Jonathon Curtis, Investment Analyst, looks at the pros and cons of investing in property and examines the role it can play in a portfolio.

Jonathon Curtis, Investment Analyst

28 Jan 2020 3 min read

Category: UK Funds

Investment trusts vs funds – UK Equity Income

We compare investment trusts and funds investing in UK companies which focus on growth and increasing dividends.

Jonathon Curtis

20 Jan 2020 4 min read