Proactive Investors - Bankers Investment Trust PLC (LON:BNKR) announced a process to make its portfolio more concentrated as it looks to extend its record of continuously increasing dividends over the past 57 years.
Announcing results for the half-year to 30 April 2024, the investment company said the board’s current expectation is that the dividend for the full year will be at least 5% above the total dividend paid in 2023.
For the first half of its financial year, the trust delivered an increase in net asset value (NAV) to 122.7p from 112.3p a year ago, with a total return of 17.5% and a share price return of 21.5% over the same period, outperforming FTSE World Index total return of 16.6%.
Dividends of 1.344p were paid or declared in the period, up from 1.24p a year ago.
Following a strategic review, the board has decided to carry out a portfolio concentration process where its six regional portfolios will be reduced to four, with manager Janus Henderson cutting the total number of holdings to around 100.
The UK and Europe regions will be merged into a Pan Europe portfolio, and China will be merged into a Pan Asia portfolio, with the other two portfolios remaining separate being North America and Japan.
This will “reduce overlap and provide each regional team with greater scope to invest more capital in the best companies across wider regions”, the trust said, while reducing the numbers of holdings 25 follows the review concluding that smaller holdings were “not improving performance”.
The amount of capital will therefore be increased in better ideas by reducing the number of holdings from the 176 at the end of last month, targeting regional portfolios of 20 investments with slightly more in the US, with the changes expected to be mostly done by the end of October.
At the end of May, the 10 largest holdings were: Microsoft (NASDAQ:MSFT) (4.37%), KLA (2.06%), American Express (NYSE:AXP) (1.84%), Alphabet (NASDAQ:GOOGL) (1.71%), Accenture (NYSE:ACN) (1.66%), Amazon.com (NASDAQ:AMZN) (1.66%), Visa (NYSE:V) (1.63%), Apple (NASDAQ:AAPL) (1.54%), UnitedHealth (NYSE:UNH) (1.41%), Novo Nordisk (CSE:NOVOb) (1.37%).
Chair Simon Miller said the process of concentrating the portfolio has already been started. "This will direct a greater amount of the company’s capital into the portfolio managers’ best investment ideas and bring greater focus to the regional portfolios. We continue to believe in the value of regional specialists with access to stock markets right across the globe."
Portfolio manager Alex Crooke at Janus Henderson, who has been joined by Jamie Ross, formerly the company’s European portfolio manager, as deputy fund manager following the recent retirement of Mike Kerley, said the past six months "has been a good time to be invested in equity markets" as most markets reached new all-time highs.
"We are excited by the prospect of a focused portfolio, investing more in our best ideas. In meetings with our investee companies, we are hearing positive messages about orders improving, restocking from customers and margins holding up.
"Inflation has fallen close to central bank targets and the first interest rate cuts have started in major economic regions. The overall outlook is more positive than six months ago and should support the increase in share prices we have seen this year."