DJ Annual Financial Report
New Star Investment Trust PLC (NSI)
Annual Financial Report
31-Oct-2025 / 17:20 GMT/BST
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NEW STAR INVESTMENT TRUST PLC
This announcement constitutes regulated information.
UNAUDITED RESULTS
FOR THE YEAR ENDED 30TH JUNE 2025
New Star Investment Trust plc (the 'Company'), whose current objective is to achieve total return through capital
growth and income, announces its results for the year ended 30th June 2025.
FINANCIAL HIGHLIGHTS
30th June 30th June %
2025 2024 Change
PERFORMANCE
Net assets (GBP '000) 121,140* 137,861 (12.13)
Net asset value per Ordinary share 170.56p* 194.11p (12.13)
Mid-market price per Ordinary share 110.00p* 131.50p (16.35)
Discount of price to net asset value 35.5% 32.3% n/a
Total Return** 2.08% 11.69% n/a
IA Mixed Investment 40% - 85% Shares (total return) 5.57% 11.80% n/a
MSCI AC World Index (total return, sterling adjusted) 7.64% 20.61% n/a
MSCI UK Index (total return) 11.03% 13.16% n/a
1st July 2024 to 1st July 2023 to
30th June 2025 30th June 2024
Revenue return per Ordinary share 4,25p 4.05p
Capital return per Ordinary share (0.21)p 16.62p
Return per Ordinary share 4.04p 20.67p
TOTAL RETURN** 2.08% 11.69%
DIVIDEND PER ORDINARY SHARE
Interim paid April 2025 1.70p 1.70p
Proposed final dividend 1.85p 1.70p
3.55p 3.40p
B Share Redemption 24.00p _____-
RECEIVABLE BY SHAREHOLDERS 27.55p 3.40p
*After return of capital (B Shares)
** The total return figure for the Company represents the revenue and capital return shown in the Statement of Comprehensive Income before dividends paid, the B Share redemption payment and after deducting B Share issue costs, as a percentage of opening net assets. The total return performance basis is the industry standard and is considered a more appropriate measure than just the revenue return. This is an alternative performance measure.
CHAIRMAN'S STATEMENT
PERFORMANCE
Your Company's generated a total return of 2.08% over the year to 30th June 2025, leaving the net asset value (NAV) per ordinary share at 170.56p. By comparison, the Investment Association's Mixed Investment 40-85% Shares Index gained 5.57%. The MSCI AC World Total Return Index gained 7.64% in sterling while the MSCI UK All Cap Total Return Index rose 11.03%. Over the year, UK government bonds returned 1.42%. Further information is provided in the investment manager's report.
Your Company made a revenue profit for the year of GBP3.02 million (2024: GBP2.88 million).
RETURN OF CAPITAL
Following an extraordinary general meeting in July 2024, GBP17 million was returned to shareholders in August by way of a "B" share issue and a subsequent redemption of the shares at a price of 24p per B share. Following the scheme, your Company's total issued share capital and voting rights were unchanged. The scheme involved reducing your Company's holdings across the board with a view broadly to maintaining in percentage terms the asset allocation, including the allocation to cash. As a result, the portfolio's risk profile was broadly unchanged.
CHANGE OF INVESTMENT OBJECTIVE
At the annual meeting on 5th December, shareholders approved the proposal by your Board to change the investment objective from long-term capital growth to long-term total return through capital growth and income.
GEARINGS AND DIVIDEND
Your Company has no borrowings. It ended the year under review with cash representing 15% of its NAV and is likely to maintain a significant cash position. In respect of the financial year to 30th June 2025, your Directors recommend the payment of a final dividend of 1.85p per share, making a total for the year of 3.55p (2024: 3.4p).
DISCOUNT
During the year under review, your Company's shares continued to trade at a significant discount to their NAV. The Board keeps this issue under regular review.
OUTLOOK
In the autumn of 2025, equity markets appeared likely to benefit overall from central bank monetary easing. The most attractive opportunities appeared to be among lowly valued large companies in the UK, Europe excluding the UK and some emerging markets. High US equity valuations, however, appeared vulnerable to disappointment after the strong rises of recent years driven by investor enthusiasm for technology in general and artificial intelligence advances in particular. Your Company's cash and bond investments provide diversification should equity markets falter and as well as income to pay dividends.
NET ASSET VALUE
Your Company's unaudited NAV at 30th September 2025 was 180.56p per share.
INVESTMENT MANAGER'S REPORT
MARKET REVIEW
Leading western central banks cut their policy interest rates over the year to 30 June 2025 in response to moderating inflation. The US Federal Reserve reduced its 5.25-5.5% rate by a half percentage point in September 2024 and then made quarter point cuts in November and December but then left the rate unchanged at 4.25-5% in response to near full employment and sticky inflation data. The Core Personal Consumption Expenditures Price Index, the Fed's preferred inflation measure, rose from 2.63% in June 2024 to 2.9% in July 2025. Inflation may rise further because of President Trump's immigration clampdown and import tariff increases. The President has criticised the Fed's refusal to ease policy further because he wishes to stimulate economic growth and weaken the dollar. Investors are nervous about this challenge to central bank independence.
Eurozone interest rates have fallen more rapidly. The European Central Bank cut its key policy rate by a quarter point on seven occasions over the year under review in response to falling inflation, taking the rate from 3.75% to 2%. In September 2025, the latest date for which data are available, inflation was slightly above target at 2.2%. Donald Trump ended the Pax Americana era when he told Europe's leaders they could no longer rely on the US for security. In Germany, the Chancellor, Friedrich Merz, announced welfare spending cuts while increasing infrastructure and defence spending.
Investors are concerned about high public sector borrowing and fiscal deficits in France, the UK and the US. Donald Trump's "Big Beautiful Bill" passed in the Senate after the vice president, JD Vance, cast his swing vote in favour. The measure extended the President's first term tax cuts, increased defence spending and cut benefits. The US trade deficit rose further but the President announced swingeing tariffs on US imports. Tariff revenues may benefit America's fiscal deficit but dollar weakness indicates investor unease. The Moody's credit ratings agency downgraded US government bonds although they remained amongst the safest investments according to the ratings.
UK policy interest rates reached a 5.25% cyclical peak in 2023 and were unchanged until August 2024 when the Bank of England announced the first of five quarter point cuts that in aggregate took the rate to 4% in September 2025. UK inflation rose from 2.0% in June 2024 to 3.8% in September 2025 as wage rises contributed to 4.7% services inflation and 2.8% goods inflation. The Bank eased policy despite above target inflation because economic activity levels were weak. Rachel Reeves, chancellor, faces tough decisions on taxes in her autumn Budget if she intends to narrow the budget deficit without further damaging economic activity.
Some emerging market economies faced significant US tariff rises but may benefit from higher growth rates and lower public sector borrowing relative to gross domestic product. Dollar weakness may also prove a catalyst for investors to buy emerging market equities, which were trading on lower valuations at your Company's year-end.
PORTFOLIO REVIEW
Your Company's total return over the year under review was 2.08%. By comparison, the Investment Association Mixed Investment 40-85% Shares sector, a peer group of funds with a multi-asset approach to investing and a typical investment in global equities in the 40-85% range, rose 5.57%. The MSCI AC World Total Return Index rose 7.64% in sterling while the MSCI UK All Cap Total Return Index rose 11.03%. Global bonds returned 0.46% in sterling while UK government bonds returned 1.42%.
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During the year under review, Your Company's performance was negatively affected by its relatively low allocation to US equities, which outperformed the benchmark, and from dollar weakness. By contrast, your Company's equity investments in the UK and emerging markets were beneficial. In August 2024, GBP17 million was returned to shareholders via a B share issue and redemption. To fund this, your Company's investments were sold on a broadly pro-rata basis to maintain the portfolio's overall asset allocation.
US equities rose 6.23% in sterling over the year, with technology stocks marginally outperforming. DeepSeek, a Chinese artificial intelligence (AI) innovator, unveiled a large language model developed at a fraction of the cost of proprietary US AI models and made the source code freely available. This resulted in significant volatility for technology stocks as investors reassessed AI's commercial potential. Polar Capital Global Technology, which has a bias towards AI beneficiaries, however, rose 11.61%, outperforming 6.74% return for US technology stocks in sterling.
Your Company started the year under review with a relatively low allocation to US stocks and the US weighting was further reduced in response to high valuations and the growing concentration risk caused by investor exuberance about AI. This drove the percentage of the US market represented by large technology companies to unprecedented levels. The holdings in Polar Capital Global Technology and the iShares Core S&P 500 exchange traded fund (ETF) were reduced as part of the return of capital to shareholders and the Polar Capital Global Technology holding was reduced by a further GBP3 million in October 2024.
Your Company benefited from strong performance by UK stocks, up 11.03% as investors bought into a market that was relatively lowly valued and yielded more than many overseas markets. This higher yield supports your Company's ability to pay dividends. Man Income returned 14.16% while Chelverton UK Equity Income, a small company investment, returned 7.33%. Aberforth Geared Value & Income, the successor investment trust to Aberforth Split Level Income, was launched at the start of your Company's financial year. Its shares fell 23.01% over the year as they traded at a discount to their net asset value. The fall came despite the 11.14% gain by UK smaller companies over the year.
Equities in Asia excluding Japan and emerging markets rose 8.38% and 6.98% respectively in sterling over the year despite the imposition of significant US tariffs on Chinese and Indian goods. Your Company's holdings in the JP Morgan Global Emerging Markets Income investment trust and its related open ended fund gained 11.05% and 5.00% respectively as Asian technology stocks including Taiwan Semiconductor Manufacturing Company and Samsung Electronics were buoyed by investor enthusiasm. Prusik Asian Equity Income, which has a value investment style and holds high yielding stocks such as CK Hutchison and Jardine Matheson, gained 9.93%. A bias towards higher dividend payers also helped Schroder Oriental Income and Schroder Asian Income Maximiser return 9.29% and 3.51% respectively.
Indian equities fell 5.65% in sterling over the year as investors preferred more lowly valued emerging markets. Stewart Investors Indian Subcontinent, one of your Company's largest investments, underperformed, falling 12.43%. Your Company's emerging markets weighting increased through a GBP1.25 million investment in Cusana Emerging Markets Equities but it was later reduced through the sale of Polen Capital Asia Income following the departure of its manager to raise GBP3.4 million.
Your Company's sterling hedged global bond investments made significant gains as global bonds rose 8.91% in dollar terms but just 0.46% in sterling because of the dollar's 7.75% fall against the pound. The sterling hedged holdings in Franklin Templeton Emerging Market Bond and the iShares Treasury Bond 7-10 years exchange traded fund returned 14.75% and 5.17% respectively. Within the UK allocation, Schroder Strategic Credit returned 8.28%. These investments combined with sterling and dollar cash provided diversification and income although the weak dollar hurt performance.
OUTLOOK
Your Company's portfolio ended the year under review positioned positively because equity markets should benefit from monetary easing by the leading western central banks. US equities, which have led markets higher in recent years, appear priced for near perfection, however, with expected returns close to the returns offered by low risk investments such as 2 year US government bonds. This implies that investors are receiving little compensation for the additional risk inherent in investing in US equities. By contrast, larger companies in the UK, the eurozone and some emerging markets appeared to offer attractive returns relative to lower risk assets. Sterling and dollar deposits, bond investments and lower risk multi-asset investments provide diversification and some protection should equity markets fall overall as well as contributing to your Company's ability to pay dividends.
SCHEDULE OF LARGEST HOLDINGS AT 30TH JUNE 2025
Purchases/ Market
(Sales) movement
Market value 30 June Market value 30 June
2024 2025
% of net
assets
GBP'000 GBP'000
GBP'000 GBP'000
Polar Capital Global Technology 12,243 (4,800) 847 8,290 6.84
Man Income Fund 7,180 (1,073) 443 6,550 5.40
TM Redwheel Global Equity Income 7,221 (1,051) (64) 6,106 5.04
Fund
Baillie Gifford Global Income 7,326 (1,075) (237) 6,014 4.96
Growth
iShares Core S&P 500 UCITS ETF 6,643 (1,001) 203 5,845 4.82
Aquilus Inflection Fund 5,066 (590) 92 4,568 3.77
Stewart Investors Indian 5,698 (841) (616) 4,241 3.50
Subcontinent Fund
MI Chelverton UK Equity Income 4,609 (677) 58 3,990 3.29
Fund
EF Brompton Global Conservative 4,757 (935) 39 3,861 3.19
Fund
EF Brompton Global Equity Fund 4,267 (627) 127 3,767 3.11
FTF Clearbridge Global 3,907 (565) 313 3,655 3.02
Infrastructure Income
Vietnam Enterprise Investments 3,497 - 113 3,610 2.98
EF Brompton Global Adventurous 3,774 (532) 149 3,391 2.80
Fund
Schroder Asian Income Maximiser 4,065 (591) (185) 3,289 2.72
L Income
EF Brompton Global Growth Fund 3,563 (493) 125 3,195 2.64
Schroder Strategic Credit Fund L 3,050 - 56 3,106 2.56
Income
MI Brompton UK Recovery Unit 3,290 (440) 250 3,100 2.56
Trust
Aberforth Geared Value & Income 4,065 (499) (568) 2,998 2.47
Trust*
iShares USD Treasury Bond 7-10yr 2,945 - 35 2,980 2.46
UCITS ETF
Prusik Asian Equity Income Fund 2,973 (425) 94 2,642 2.18
EF Brompton Global Balanced Fund 2,745 (358) 49 2,436 2.01
Cusana Emerging Market Equity 1,203 1,250 (88) 2,365 1.95
Fund
EF Brompton Global Income Fund 2,236 - 24 2,260 1.87
MI Polen Capital Asia Income 4,147 (3,994) (153) _____- _____-
Fund
110,470 (19,317) 1,106 92,259 76.16
Balance not held in investments _11,246 (472) __(9) 10,783 __8.90
above
121,716
Total investments (excluding
cash) (19,789) 1,115 103,042 85.06
*The holding in Aberforth Split Level Trust was converted into Aberforth Geared Value and Income Trust during the year.
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The income return from the largest holdings above is not included in the table.
The investment portfolio, excluding cash and bank deposits, can be further analysed as follows:
GBP '000
Investment funds 74,535
Investment companies and exchange traded funds 24,868
Unquoted investments, including loans of GBP0.1m 2,748
Other quoted investments ___891
103,042
STRATEGIC REVIEW
The Strategic Review is designed to provide information primarily about the Company's business and results for the year ended 30th June 2025. The Strategic Review should be read in conjunction with the Chairman's Statement and the Investment Manager's Report, which provide a review of the year's investment activities of the Company and the outlook for the future.
STATUS
The Company is an investment company under section 833 of the Companies Act 2006. It is an Approved Company under the Investment Trust (Approved Company) (Tax) Regulations 2011 (the 'Regulations') and conducts its affairs in accordance with those Regulations so as to retain its status as an investment trust and maintain exemption from liability to United Kingdom capital gains tax (see note 21 for an uncertainty).
The Company is a small registered Alternative Investment Fund Manager.
PURPOSE CULTURE AND VALUES
The Directors acknowledge the expectation under the UK Code on Corporate Governance issued by the Financial Reporting Council in July 2018 (the 'Code') that they formally define a purpose for the Company. The Directors have reviewed this requirement and consider that the Company's purpose is to deliver the Company's stated investment objective to achieve long-term capital growth for the benefit of its investors.
Similarly, the Directors have also considered the Company's culture and values in line with the Code requirements. The Board has formed the view that as the Company has no direct employees, and with operational management outsourced to the Investment Manager, the Administrator and the Company Secretary, the Company's culture and values have to be those of the Board. Having a stable composition and established working practices, the Board is defined by experienced membership, trust and robust investment challenge. These are therefore the key characteristics of the Company's culture and values.
STAKEHOLDER RESPONSIBILITIES (S.172 STATEMENT UNDER COMPANIES ACT 2006)
The Directors are aware of their responsibilities to stakeholders under both the Code and legislation through regular governance updates from the Company Secretary. As a UK listed investment trust, the Directors outsource operational management of the Company, including day-to-day management of the investment portfolio, to third parties. As a consequence, the Directors consider their key stakeholder groups to be limited to the Company's shareholders, its third-party advisers and service providers, and individual Board members.
The Company's Articles of Association, the Board's commitment to follow the principles of the Code and the involvement of the independent Company Secretary in Board matters enable the Directors to meet their responsibilities towards individual shareholder groups and Board members. Governance procedures are in place which allow both investors and Directors to ask questions or raise concerns appropriately. The Board is satisfied that those governance procedures mean the Company can act fairly between individual shareholders and takes account of Mr Duffield's significant shareholding. In considering the payment of the minimum dividend required to maintain investment trust tax status, the recommendations to vote in favour of the resolutions at the AGM and the asset allocation within the investment portfolio, the Board assessed the potential benefits to shareholders. The Board meets its major service providers at least quarterly and Shareholders' views are obtained at the Annual General Meeting.
The Board also regularly considers the performance of its significant independent third-party service providers. Those third-party service providers in turn have regular opportunities to report on matters meriting the attention of the Board, including in relation to their own performance. The Board is therefore confident that its responsibilities to each of its key stakeholder groups are being discharged effectively.
As the Company does not have any employees, the Board does not consider it necessary to establish means for employee engagement with the Board as required by the latest version of the Code.
INVESTMENT OBJECTIVE AND POLICY
Investment Objective
During the year the Company's investment objective was amended to achieve total return through capital growth and income.
Investment Policy
The Company's investment policy is to allocate assets to global investment opportunities through investment in equity, bond, commodity, real estate, currency and other markets. The Company's assets may have significant weightings to any one asset class or market, including cash.
The Company will invest in pooled investment vehicles, exchange traded funds, futures, options, limited partnerships and direct investments in relevant markets. The Company may invest up to 15% of its net assets in direct investments in relevant markets.
The Company will not follow any index with reference to asset classes, countries, sectors or stocks. Aggregate asset class exposure to any one of the United States, the United Kingdom, Europe ex UK, Asia ex Japan, Japan or Emerging Markets and to any individual industry sector will be limited to 50% of the Company's net assets, such values being assessed at the time of investment and for funds by reference to their published investment policy or, where appropriate, the underlying investment exposure.
The Company may invest up to 20% of its net assets in unlisted securities (excluding unquoted pooled investment vehicles), such values being assessed at the time of investment.
The Company will not invest more than 15% of its net assets in any single investment, such values being assessed at the time of investment.
Derivative instruments and forward foreign exchange contracts may be used for the purposes of efficient portfolio management and currency hedging. Derivatives may also be used outside of efficient portfolio management to meet the Company's investment objective. The Company may take outright short positions in relation to up to 30% of its net assets, with a limit on short sales of individual stocks of up to 5% of its net assets, such values being assessed at the time of investment.
The Company may borrow up to 30% of net assets for short-term funding or long-term investment purposes.
No more than 10%, in aggregate, of the value of the Company's total assets may be invested in other closed-ended investment funds except where such funds have themselves published investment policies to invest no more than 15% of their total assets in other listed closed-ended investment funds.
Information on the Company's portfolio of assets with a view to spreading investment risk in accordance with its investment policy is set out above.
FINANCIAL REVIEW
For the year-ended 30 June 2023, the Company changed its management fee allocation policy. Previously the management fee was charged to income. As the Company invests on a fund of funds basis, for much of the investment portfolio this resulted in two investment management fees being charged to income. For 2023 and subsequent periods, the management fee charged directly by Brompton is being allocated to the capital account.
Net assets at 30th June 2025 totalled GBP121,140,000 compared with GBP137,861,000 at 30th June 2024. In the year under review, the NAV per Ordinary share decreased by 12.13% from 194.11p to 170.56p. The decrease in NAV per share of 23.55p resulted from the B Share issue redemption (24.00p), dividends paid (3.40p), capital loss (0.21p) and B share issue expenses (0.18p) offset by the revenue return (4.25p). Final dividends of 1.70p per share in respect of 2024 and an interim dividend for 2025 of 1.70p per share were paid.
The B Share repayment of GBP17 million was funded from the sale of investments, resulting in the year on year fall in the valuation of investments.
The Company's gross revenue rose to GBP3,398,000 (2024: GBP3,256,000). This increase in revenue was achieved despite the fall in net assets following the B Share redemption. The Company continued to invest in higher income producing funds. Interest on the bank balances remained significant but decreased as interest rates were lower. After deducting expenses and taxation, the revenue profit for the year was GBP3,021,000 (2024: GBP2,881,000).
Total expenses, including the management fee charged to capital, for the year decreased slightly to GBP1,119,000 (2024: GBP1,186,000). In the year under review the investment management fee decreased to GBP742,000 (2024: GBP811,000), reflecting the Company's lower average NAV over the period following the B Share redemption. Further details on the Company's expenses may be found in notes 3 and 4.
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