Thursday, 20 June 2013

Bankers Investment Trust (BNKR)

Bankers has been around for a very long time - well, since April1888, and has just celebrated its 125th anniversary. They sit in the global growth sector but could just as equally be in the global growth & income sector with a current yield of 2.6%.

Here’s a snippet from last year’s annual report:

“A global equity fund such as Bankers is therefore well placed to offer an attractive investment for people saving for their future. £1,000 invested 30 years ago with all dividends re-invested would today have a value of £38,951. This compares with the return from cash invested in a bank deposit account with interest over that same period of £4,145. These are difficult times for savers, as cash deposits carry negative real interest rates; whereas there are real merits of investing in a savings product offering such as Bankers. It has a superior track record of long-term capital growth and increasing dividends in real terms. The above figures showing the comparison of returns over 30 years speak for themselves.”
(Unfortunately, I have only held this for the past 3 years!).

can you name them all?
The trust has been in the hands of experienced manager Alex Crooke since 2003. During his tenure, dividends have almost doubled from 6.78p to 13.33p  a CAGR of 7.0% per annum. I have a figure of 13.9p pencilled in for the current full year.

They have a distinguished record of having increased dividends in each of the past 46 years (that’s since England last won the World Cup!).

Geographic weighting is more focussed on Europe - UK is 41% and the rest of Europe 12.5% - other areas are US 20%, Asia/Pacific 13% and Japan 10%.

They have just released their interim report for the half year to 30 April (link via Investegate).

A well positioned portfolio and the improving confidence in equity markets has resulted in a strong performance in the first 6 months of the financial year. Net asset value per share has risen by 16.6%, compared to a rise of 12.1% in the FTSE All-Share Index during the period.
Bankers -v- City of London 12m comparison
(click to enlarge)

The share price has increased from 433p to 536.5p - up 24% as the discount to NAV has narrowed to 3%.

Management costs are lower than most at just 0.4%p.a. which means more of the returns are passed on to shareholders. Revenue reserves have increased and represent more than double the total dividends paid out in the past year.

“As your Company marks its 125th year, it is clear to me that Bankers has an investment style that has stood the test of time and delivered considerable returns to investors over the long term.  The simple philosophy of investing in high quality companies, whilst not overpaying, remains at the core of Bankers and this should result in many more years of success.” R.D.Brewster, Chairman

Not much chance of this banker going to jail for being reckless!


  1. I'm making a list of ITs to buy when prices have come down and discounts widened. Bankers is on it. Now: three weeks or three years? Dunno.

    1. What would you consider to be a reasonable price to buy?

  2. It's not so much the price of Bankers that'll tempt me to buy, but signs from CAPE that the price of equities in general is low enough to give hope of a decent return over the years. Then I'll buy decent ITs that hold those equities. By "decent" I mean with a long history (probably), with large dividend reserves, at an attractive discount, and with a record of being run in a manner consistent with their claimed objectives.

    I have no intention of trying to buy individual equities, partly because when we did hold equities (roughly 1989- exactly 1999) we did so in ITs (plus pension fund "units") and those collective investments did very well for us. My one individual share did decently too, but it was in the nature of a fluke.

    1. Sounds like you have worked out a strategy. I do not follow CAPE but would not have thought equities were over-valued at current levels, particularly when I consider the lower income returns on most other assets - cash, gilts etc - if I were not in equities.

      1989 - 1999 would have seen excellent returns on your collective investments.

  3. Our cash is doing well - beating RPI - because we locked in high interest rates some time ago. But from this autumn onwards, as the accounts mature, it'll be head-scratching time. Still, perhaps equities will be cheaper then.

    People say about equities "If you don't need the extra return don't take the extra risk". Fair enough, but I expect my widow to live for decades: eventually she'll need "care". Who can know what we need?

    And there must be a non-negligible chance of a government of Ed Moribund and Ed Ballocks. Two Eds are worse than one. Aargh!