TEMPLE BAR TRUST Familiar names are starting to pay off for the patient duo

Patience is the key factor behind the recent success of listed investment fund Temple Bar. They have not sold any shares since investment house Redwheel’s Ian Lance and Nick Purves were hired to manage the £677m fund and overhaul the portfolio in late 2020.

They bought everything at the point in time they were holding on, although they occasionally added to positions – and took profits. Only two new holdings were made – one undisclosed (the position is being built up) and the other in Dutch auto finance and insurance provider Stellantis.

“It’s a waiting game,” says Lance. “We’re sitting there running our stocks and making the dividends available to our shareholders as they come in. It may sound boring from an investment perspective, but in terms of generating returns, it can be quite exciting.”

The results in terms of shareholder return were certainly exciting. Since the experienced managers took full control of the trust at the end of October 2020, investors have enjoyed a total return of 81 percent.

That’s double what the average UK Equity Income Trust and the FTSE All-Share Index returned over the same period. Lance admits there was some luck in the timing of her appointment. “We overhauled the portfolio while the country was in lockdown and many UK stocks were hit hard,” he says.

“It suited our approach of buying stocks when their prices are low and then hopefully selling them later at a much higher price.” even further back, in the financial crisis of 2008 – messed up.”

The Trust now has just 25 holdings, most of which are listed in the UK. They are all household names – energy giants BP and Shell; Banks NatWest and Standard Chartered; and retailer Marks & Spencer.

“Marks & Spencer has turned things around,” says Lance. “It is back in the FTSE 100 index and will soon be paying dividends again after suspending them with the outbreak of the pandemic in 2020. It’s a retail success story.”

M&S shares are now trading at around £2.30, down from 92p in November last year.

Dividends are a major factor in Temple Bar’s appeal to investors. After declining in 2020, they rebounded in 2021 and 2022. So far this year, the Trust has announced two quarterly payments that add up to what was paid last year.

Although Lance says the UK stock market is cheap relative to other markets, he is not confident international investors will return in large numbers. He adds, “There are some great companies here that are doing well, but the market isn’t valuing them.” increase.”

According to Lance, fund manager Neil Woodford made his name as a savvy investor in the early 2000s (before later losing track) by buying dividend-friendly tobacco stocks that bought back shares.

Temple Bar’s shares currently offer an annual return of just over 4 percent. The market identification code is BMV92D6 and the market ticker is TMPL. Annual fees are 0.54 percent.

One last note. Temple Bar split its stakes in May last year. That means investors now hold five shares for every share they’ve held to date — which, in monetary terms, explains why the dividend per share is about a fifth of the previous dividend.