Edinburgh is one of the largest investment trusts on the market with assets of over £1.7bn. It is managed by Mark Barnett.
The trust invests primarily in UK securities with the long term objective of achieving:
1. an increase of the Net Asset Value per share by more than the growth in the FTSE All-Share Index; and,
2. growth in dividends per share by more than the rate of UK inflation.
The trust holds just over 50% FTSE 100 companies, 23% second tier FTSE 250 and 15% of the portfolio comprise overseas listed holdings. This is probably not one for ethical investors - 4 of the top 10 holdings are tobacco companies and together account for just over 20% of the portfolio.
Edinburgh has been one of the cornerstones of my income portfolio held in both Sipp drawdown and ISA for many years. The sum of £1,000 invested in 2007 would now be worth £2,370 - the second best performer in the UK equity income sector behind Finsbury Gr. & Income Trust.
It has recently issued its results for the year to 31st March 2017 (link via investegate).
The Company's net asset value, including reinvested dividends, rose by 14.1% during the year, compared to 22.0% (total return) for the benchmark FTSE All-Share Index.
|5 Yr Comparison v VLS 80|
(click to enlarge)
Income per share over the year has increased by 4.5% to 27.9p. The board are proposing a final dividend of 9.15p making a total of 25.35p for the full year - an increase of 1.0p or 4.1% which is a small improvement on the previous year. Based on the current price of 760p, the yield is therefore 3.3%.
Last year the trust outperformed the benchmark by 8% - this year it has fallen short by 8%. Over 10 years, the return is very good but over 5 years the record is more average and dividend growth is below par at just 1.8% p.a. This is the 3rd full year in charge for Mark Barnett after taking over from Neil Woodford.
|...and over 2 Years|
There are some managers who can consistently outperform the market but the evidence shows that over time most fail and this is why I have been moving a larger proportion of my portfolio into low cost index funds over the past couple of years.
I will be trimming my current holdings in this trust but will give Mr Barnett a little more time to see if he is one of the few who can consistently beat the benchmark over the longer periods - time will tell.
All in all, not such a good year but the longer term record remains acceptable. Lets see how things pan out over the coming 12 months....