Page 14 - DIY Investor Magazine | Issue 41

ALL WEATHER INVESTMENT TRUST: BRUNNER INVESTMENT TRUST
· August 2024 14
DIY Investor Magazine
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DELIVERING CAPITAL GROWTH AND RISING INCOME IN VOLATILE MARKETS
Markets have had a volatile few years, throughout which the Brunner Investment Trust has managed to deliver both capital growth and rising income. This is thanks to a balanced investment approach, with the freedom to make adjustments according to market conditions. Investing in resilient businesses helps to smooth returns.
KEY TAKEAWAYS
• As an ‘all-weather’ trust, Brunner aims to deliver capital growth and rising income in most economic environments.
• The trust has weathered volatility by taking a balanced approach, seeking strong businesses with a decent cash yield.
• Brunner has paid out a rising dividend for the past
52 years, making it one of the Association of Investment Company’s ‘Dividend Heros’1.
Markets have seen some highs and lows over the past
five years. The global pandemic, increasing geopolitical tensions and higher inflation have given rise to a period of market volatility. Some sectors have shot the lights out and others have fallen behind.
As the Brunner Investment Trust isn’t beholden to any particular investment style, its portfolio managers have the flexibility to invest in any company from around the world, largely irrespective of sector or region. This freedom allows a nimble approach to portfolio construction, which aims to.
deliver capital growth and rising income in most economic environments, certainly on a relative - to benchmark basis.
In the face of recent volatility, this approach seems to have been a success; not many managers can claim Brunner’s five consecutive years of outperformance against benchmark, net of fees2. When it comes to performance in the face of volatility, the proof does appear to be in the pudding, though of course this is no indicator of future returns.
‘A NIMBLE APPROACH TO PORTFOLIO CONSTRUCTION, WHICH AIMS TO DELIVER CAPITAL GROWTH AND RISING INCOME’
The Brunner team takes a balanced, long-term approach to portfolio construction, seeking an equal blend of quality, value, and growth stocks3. The managers want to avoid ‘echo-chamber’ thinking which may give rise to one particular investment style. They want to keep a completely open mind and look for the right businesses, rather than
be pigeonholed as a particular type of investor. It’s about solid fundamentals4 bought for a good price, and prudent financial risk management. Co-lead portfolio manager, Julian Bishop, explains, “We believe quality is really important, so is market position, profitability, balance sheet strength and growth. Then, we just try to balance that without overpaying.”
Since interest rates started to come down towards the end of 2023, some great businesses have seen their valuations take off. Brunner’s managers have aimed to capture some