London, UK, 30 November 2022
Edison issues update on The Bankers Investment Trust (BNKR)
In our update on The Bankers Investment Trust (BNKR) in August, we updated readers on fund manager Alex Crooke's macroeconomic views and positioning. As one would expect, there have not been wholesale changes since then in his views and the resultant positioning, as invariably BNKR's style is incremental change. There are some developments on the potential direction of travel for geographic weightings, with the manager taking advantage of the recent relative strength in UK large caps to raise levels of liquidity modestly, likely to be deployed in Asia over time. In other news, 2022 has been a decent year for a recovery in dividends. Janus Henderson Investors estimates that on a 12-month forward basis, the top 10 positions within the trust (on an unweighted basis) should on average generate dividend increases of 11% and at H122 the board guided for an FY22 dividend increase of at least 5% over the level paid in 2021, which could well be a conservative estimate.
BNKR's short- and medium-term NAV performance has been a little underwhelming when compared with the index (although it is more competitive against peers), which may have contributed to the widening discount over the past 12 months. BNKR currently trades on a discount to its NAV (debt at fair value, cum income) of 5.9% versus its five-year average of a 1.7% discount, which we believe offers investors an attractive entry point for a prudent but actively managed portfolio delivering both growth in income and capital.
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