The Brunner Investment Trust

Strong performance record vs benchmark and peers

15 December 2023

The Brunner Investment Trust (BUT) has two co-managers, Christian Schneider (CIO global growth) and Julian Bishop (global growth specialist), who are supported by deputy managers Simon Gergel (CIO UK equities, UK dividend and value specialist) and James Ashworth (global growth specialist). BUT may be considered as a ‘fund for all seasons’ given its steady outperformance in recent years in widely different market environments. The trust’s NAV performance also stands out positively compared with its 12 peers in the AIC Global sector, ranking first over the last three years, second over the last five and fourth over one year. BUT’s dual mandate of both income and capital growth and its straightforward portfolio of listed global equities may be an ideal way for investors to gain exposure to overseas companies. MORE »

Overhang lifted – potential for a narrower discount

10 May 2021

The Brunner Investment Trust (BUT) is managed by Matthew Tillett at Allianz Global Investors (AllianzGI), along with deputy managers Christian Schneider and Marcus Morris-Eyton. Tillett is confident that the trust’s shares can trade at a narrower discount to NAV following the exit of a major shareholder, which had acted as an overhang since 2016. He suggests that ‘now is a great opportunity to buy a solid reliable trust that has delivered good performance over the long term’. The manager says that BUT has a ‘philosophy and process that is tried and tested’ with the fund offering investors ‘high quality, large, liquid companies at attractive valuations’. He believes that the trust is well positioned to benefit in an environment where investors place a greater emphasis on the quality and strength of company fundamentals. MORE »

Quality global portfolio available at a discount

1 February 2021

The Brunner Investment Trust (BUT) is managed by Matthew Tillett at Allianz Global Investors (AllianzGI), working alongside deputy managers Jeremy Kent and Marcus Morris-Eyton. All three have positive track records in other funds that they manage, and bring complementary skillsets to the table. Tillett highlights the trust’s quality bias and diverse income stream, which is less dependent on the UK than it used to be. This has been beneficial in 2020 as domestic dividend cuts have exceeded those in other markets, and has helped BUT extend its long-term record of outperformance, particularly versus the broad UK market. MORE »

New managers, same philosophy and process

28 July 2020

The Brunner Investment Trust (BUT) is now managed by Matthew Tillett at Allianz Global Investors (AllianzGI), who worked closely with his predecessor Lucy Macdonald as co-manager on the fund for four years, with a particular focus on income generation. He is able to draw on the well-resourced investment team at AllianzGI, including BUT’s new deputy managers Jeremy Kent and Marcus Morris-Eyton. Tillett says BUT offers a balance between growth and income, having provided investors with consistent capital appreciation over the long term, pays an attractive yield and has a distinguished record of 48 years of consecutive annual dividend increases. He believes we are in an exciting part of the cycle, where there are extremely interesting investment opportunities for those with a disciplined approach. MORE »

A portfolio ‘for all seasons’

12 November 2019

The Brunner Investment Trust (BUT) is managed by Lucy Macdonald at Allianz Global investors (AllianzGI). Important developments for the trust in recent years include a move to a single global rather than discrete UK and overseas portfolios; a more global benchmark; better investment performance; an improved capital structure; and a more diversified share register. The manager believes that versus its peers, BUT’s relative headwinds (due to having less exposure to the most highly valued tech stocks and more to the UK) are dissipating. She says that having both an income and capital growth objective in a more volatile, lower-return environment ‘is probably not a bad thing’. Macdonald argues that BUT offers a more balanced style at a time when growth looks very expensive versus value; she describes the trust as a portfolio ‘for all seasons’. MORE »

Debt refinancing provides more flexibility

2 May 2019

The Brunner Investment Trust (BUT) has been sole-managed by Lucy Macdonald at Allianz Global Investors (AllianzGI) since June 2016. She says that following the trust’s refinancing of its high-cost debt in 2018, there is increased flexibility to focus on higher-conviction, more interesting quality growth names, without needing to invest in higher-yielding companies in order to cover BUT’s dividend. The manager notes that despite this shift in focus, the fund’s portfolio yield remains in line with that of the benchmark and the trust has a high level of revenue reserves, equivalent to c 1.5x the last annual dividend payment. MORE »

Focused global equity exposure

15 November 2018

The Brunner Investment Trust (BUT) is now a much more focused global equity proposition compared with mid-2016: there is a single manager, running a single portfolio (rather than one UK and one overseas), performance has improved and the board has paid off the trust’s longstanding, high-cost debt. Manager Lucy Macdonald believes that the investment cycle is mature, characterised by peak levels of liquidity, earnings growth and equity valuations, suggesting investors should gravitate towards quality companies that can generate above-average returns on investment. BUT has a distinguished dividend track record; its annual distribution has increased for the last 46 consecutive years. MORE »

Refinancing will meaningfully reduce cost of debt

13 June 2018

The Brunner Investment Trust (BUT) has recently announced a refinancing of its second (and last) tranche of high-cost debt (£28m). It placed a £25m note at a record low rate of 2.84% for 30-year debt, made possible due to declining UK government bond yields as a result of recent political concerns in Italy. The remaining £14.4m costs (including accrued interest) to repay the debt will be financed by existing assets and bank debt, and will meaningfully lower BUT’s overall weighted average interest costs from 7.7% to 2.9% pa. Manager Lucy Macdonald describes this as an exciting development, as it will allow the trust to have a more efficient balance sheet and provides greater flexibility to increase the dividend in real terms. Coupled with the lower cost of debt, a potentially higher yield could lead to a narrowing in the trust’s discount. BUT has a distinguished distribution track record, growing dividends for the last 46 consecutive years. MORE »

Improving performance under sole manager

27 September 2017

The Brunner Investment Trust (BUT) aims to generate long-term growth in capital and income from a portfolio of high-quality global equities. Over time the exposure to overseas stocks has increased, providing a broader opportunity to generate income and capital growth, and the number of holdings has been reduced. Since June 2016, BUT has had a single manager, Lucy Macdonald, who has refined the UK stock selection process in line with that for overseas companies. Under her sole tenure, the trust has outperformed the composite benchmark by more than 4pp. BUT has a distinguished record of dividend growth; annual dividends have increased for the last 45 consecutive years and the current yield is 2.3%. MORE »

Dividend increased for 45 consecutive years

3 April 2017

The Brunner Investment Trust (BUT) is a well-established fund investing in a relatively concentrated portfolio of c 70 global equities, aiming to generate long-term growth in capital and income. Over time, the number of holdings has been reduced and the proportion invested in overseas equities has increased. Lucy Macdonald has been sole manager since June 2016, and now uses her bottom-up stock selection process to invest in both UK and overseas companies. BUT’s style balance between growth and value stocks meant that relative performance was maintained during a significant market style shift from growth to value stocks in Q416. BUT has increased its annual dividend in each of the last 45 consecutive years; its current yield of 2.3% compares favourably with its peer group. MORE »

More concentrated investment in global stocks

29 September 2016

The Brunner Investment Trust (BUT) invests in a concentrated global equity portfolio aiming to generate long-term growth in capital and income. Over time the number of stocks has been reduced, resulting in 70 high-conviction holdings selected for their strong fundamentals and attractive valuations. Since June 2016, BUT has been solely managed by Lucy Macdonald. Dividends are paid quarterly; BUT has a progressive policy and annual dividends have increased for the last 44 consecutive years. The current dividend yield of 2.7% compares favourably with sector peers. MORE »

Actively seeking income and growth

18 December 2015

The Brunner Investment Trust (BUT) began life as a vehicle for managing the wealth of one of the founding families of ICI, a role it continues to fulfil, as well as offering other investors access to its diversified portfolio of global equities. Managed by Allianz Global Investors (AllianzGI), it seeks to achieve long-term capital and income growth, and has grown its dividend (which has been paid quarterly since 2014) for 43 years in a row. The bottom-up investment process makes extensive use of AllianzGI’s global research resources, and the managers are increasingly focused on increasing the portion of the trust’s dividend yield (one of the highest in its sector) that comes from overseas. Expensive gearing has historically been a headwind, but this will begin to abate from January 2018. MORE »