Temple Bar Investment Trust Plc - Investment Update
PR Newswire
London, March 25
TEMPLE BAR INVESTMENT TRUST PLC
INVESTMENT UPDATE
As at COB 23/03/20 the company had the following asset exposure.
| £ | |
| Total Assets | 580,066,575 |
| Debt | 113,000,000 |
| Equities | 393,679,179 |
| Gold/Silver | 56,339,124 |
| Cash | 130,048,272 |
Commentary
Going into 2020 the Temple Bar portfolio was almost fully invested, including borrowings. The portfolio manager believed, supported by historical data, that value equities were very cheap relative to history and that UK equities were cheap relative to world equity markets.
Most cheap value equities offered some level of cyclicality which the portfolio manager accepted as those stocks had, in general, underperformed and were discounting only moderate economic growth.
The trust's assets were particularly focused on stocks earning the majority of their revenues in the UK. The portfolio manager expected an expansionary budget and expected this to generate better than expected economic activity in 2020.
At the year end, approximately 6% of the portfolio was invested in precious metals (bullion and shares) as the manager believed we were approaching a new period of fiscal and monetary policy which would presage a period in which Independent Central Banks were less focused on inflationary targeting than they had been for many years.
The COVID-19 outbreak and the consequent extreme market volatility has proved an exceptionally difficult backdrop for the portfolio with many of the trust's holdings falling significantly.
After lengthy discussion, the manager and board decided to increase significantly the liquidity on the portfolio thus immunizing the gearing on the Trust. This was conducted through sales of the least cyclically exposed of the stocks on the portfolio. This maintained much of the sensitivity to a market, and in particular to a value recovery.
The top ten holdings are as follows:
| Travis Perkins PLC | 6.2% |
| Royal Dutch Shell PLC Class B | 4.6% |
| BP PLC | 4.4% |
| Royal Bank of Scotland Group PLC | 3.7% |
| Grafton Group PLC | 3.6% |
| Barclays PLC | 3.3% |
| Kingfisher PLC | 3.3% |
| TP ICAP PLC | 2.8% |
| Forterra PLC | 2.8% |
| Capita PLC | 2.6% |
