Edinburgh Investment Trust: June 2026 update

• Imran Sattar was appointed manager of the trust in February 2024, following the retirement of James de Uphaugh and Chris Field

• The manager’s focus is on providing a balance between longer-term income and capital growth

• The trust increased its dividend by 11.1% to 32.0p per share in the year to the end of March 2026.

How it fits in a portfolio

Edinburgh Investment Trust invests mainly in larger UK companies with an aim to provide a return in excess of the FTSE All Share index over the long term. The trust has a twin objective of increasing Net Asset Value (NAV) more than the FTSE All Share index and growing dividends per share faster than the rate of UK inflation. It could therefore fit as part of an income-focused investment portfolio or add exposure to larger UK companies in a broader, diversified portfolio.

Investors in closed-ended funds should be aware the trust can trade at a discount or premium to its net asset value (NAV).

Manager

Imran Sattar began his career at Mercury Asset Management in 1997, before joining BlackRock to manage UK equity funds. In 2018, he joined Majedie Asset Management to continue running UK equity funds and in April 2022 joined Liontrust when the business acquired Majedie.

Following the retirement of experienced managers James de Uphaugh and Chris Field, Imran Sattar was appointed as portfolio manager of the trust in February 2024. He’s supported in managing the trust by deputy portfolio manager, Emily Barnard.

Barnard started her career at the Wellcome Trust before joining Majedie Asset Management in 2016. She joined Liontrust in 2022 following Liontrust’s acquisition of the business and forms part of the Global Fundamental team.

Sattar and Barnard are also supported by the rest of the Global Fundamental Investment team at Liontrust and analysts Tom Gilbey and Gabriel Lever Grecu.

Process

Edinburgh Investment Trust mainly invests in larger UK companies with 77.8% invested in the FTSE 100 at 31 May 2026. There is also a small amount (2.2%) invested in businesses listed on overseas stock markets. The objective is for returns to come from a balance of long-term capital and income growth. This approach limits the reliance on either income or capital to drive returns which could result in a smoother ride. The trust is relatively concentrated at 43 holdings, meaning that each investment could have a big impact on performance and increases risk.

Sattar looks for good quality companies with sustainable business models and quality management teams across the value and growth spectrum. His focus is on identifying growing companies with well-established economic moats.

In the year to the end of March 2026, Sattar made a number of changes to the portfolio. Following the sell-off in software companies that the market deemed to be losers from AI, Sattar bought technology company Softcat. He also increased his exposure to London Stock Exchange Group (LSEG), Sage and RELX following a drop in their share prices. Sattar also bought manufacturing company Marshalls and brick manufacturer Ibstock.

Sattar sold a number of companies as well including US life science company Thermo Fisher Scientific and UK defence company BAE Systems. Both have performed well and Sattar thinks there are now better opportunities elsewhere.

The trust can borrow money to invest with the intention of increasing returns (known as gearing), but this could magnify losses in a falling market and increases risk. The manager can also use derivatives, which if used adds risk. The level of gearing as of the end of March 2026 (the end of the trust’s financial year) was 5.8%, higher than the 5.0% level a year earlier. In addition, there may be some investments in smaller companies which, by their nature, can be higher risk and illiquid investments.

Culture

Liontrust gives managers the freedom to manage their funds according to their own investment and market views. The company simply asks managers not to deviate from their investment processes. Each manager's funds are regularly checked by other senior managers at Liontrust to ensure they're staying true to their investment processes.

We like that all Liontrust fund managers invest a significant amount of their own money into the funds they run, and their incentivisation is tied to the performance of the funds they manage. We think these factors help to align their interests with those of investors.

ESG Integration

Liontrust gives fund managers the freedom to run their portfolios according to their own investment and market views. It simply asks managers not to deviate from their investment processes. The quality of ESG integration therefore varies across Liontrust’s investment teams.

The firm’s Sustainable Future range of equity and fixed income funds do incorporate ESG analysis and invest to achieve positive change. Every team member is responsible for all aspects of financial and ESG analysis – ESG analysis is not farmed out to a separate team. The team produces regular insight articles, available via the Liontrust website. They also produce a Stewardship report, which explores the firm’s engagement and voting activities.

The firm publicly discloses all voting decisions on a quarterly basis, although no rationales are provided.

Cost

The trust’s annual ongoing charge to the end of March 2026 was 0.52% marginally higher than last year where the ongoing charge was 0.51%. Investors should refer to the latest annual reports and accounts and Key Information Document for details of the risks and charging structure.

The annual charge to hold investment trusts in the HL ISA, SIPP or Fund & Share Account is 0.35% (capped at £150 p.a. in each account) and 0.25% in the HL Lifetime ISA (capped at £45 p.a.). There are no charges from HL to hold investment trusts within the HL Junior ISA. As Investment trusts trade like shares, both a buy and sell instruction will be subject to the HL share dealing charges.

Part of the trust’s annual charge is taken from capital, which can increase the yield but reduces the potential for capital growth.

Performance

Since Sattar took over as sole manager of the trust in February 2024, the trust has delivered a share price return of 31.39%* behind the 46.22% return from the FTSE All Share index. The trust has also underperformed the average trust in the AIC UK All Companies sector which returned 35.30%. The trust’s net asset value (NAV) rose 26.36% over the same period. This is a short timeframe to consider performance over, and past performance isn’t a guide to the future.

Over the trust’s last financial year to the end of March 2026, the trust’s share price rose 8.47%, lagging the 21.54% return of the FTSE All Share and the 13.30% of the average trust in the AIC UK All Companies sector. The NAV rose 7.21%.

Over this period, some of the main detractors came from the trust’s software companies which the market has characterised as AI losers with a view that their business models could be replaced by AI. This includes property platform Rightmove; however, the team believe the company can utilise AI to provide higher value add and make the search and filtering process easier. Car platform company Auto Trader was another detractor for this reason, instead of being displaced by AI the team believe it can use AI to enhance their services.

On the other hand, copper and iron mining company Anglo American was a positive contributor to performance. They have benefited from rising commodity prices and reported strong operational performance. Another contributor was supermarket chain Tesco, as the company continues to gain market share compared to its competitors.

In the trust’s last financial year to the end of March 2026, total dividends paid to shareholders amounted to 32.00p per share. This is an 11.1% increase on the previous year. As was the case last year, this year’s dividend payment is not fully covered by revenues so is partially funded by using some of the trust’s revenue reserves. Reserves contribute 5.40p per share of the total dividend figure. This method of boosting the income paid to investors is used by investment trusts during tougher times, using reserves that have been accumulated during the good times.

At the time of writing the trust currently trades at a discount of 7.55% marginally lower than its 12-month average discount of 7.67%. The trust also has a dividend yield of 3.99%, although yields are not guaranteed and therefore are not a reliable indicator of future income.