TMPL has been managed by Alastair Mundy since 2000. He takes a contrarian view on the timing of buy and sell decisions - buying the shares of companies when sentiment towards them is thought to be near its worst and selling them as fundamental profit improvement and/or re-evaluation of their long-term prospects takes place.
This contrarian approach centres on long-term investment in cheap, out-of-favour companies in the belief that over time, these will be affected by reversion to mean.
This approach has proved very successful over the longer term with the trust outperforming the FTSE All Share index over the past 5 & 10 years. In 2016 it was one of my best performing trusts with a total return on net assets of 20.4%.
They have today published full year results for the 12 months to end 2017 (link via Investegate). Unfortunately, they were unable to outperform the FTSE this year with total return of net assets increasing by 9.7% compared to a gain of 13.1% for the FTSE All Share index. The contrarian approach often requires long periods before the benefits for the trust are realised.
|3 Yr Performance v FGT|
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Temple Bar has ongoing charges of just 0.6%, a natural dividend yield of 3.3% and provided the third-best 10-year total returns in the UK equity income sector (top place held by Finsbury Growth & Income) despite a poor run in 2014 and 2015.
The trust is committed to paying a rising dividend year on year and has met this commitment for the last 34 years.
The board are recommending a final dividend of 17.48p making 42.47p for the full year - an increase of 5% on 2016. The dividend is covered by income receipts of 43.3p.