It is almost 2 years since Mark Barnett took over the reins from Neil Woodford.
This trust is one of the top UK Income Trust in terms of net asset value and share price performance over five and ten years, its returns far outstripping those of the FTSE All-Share index. A sum of £1,000 invested 10 yrs ago would now be worth £2,886 compared to a total return of £1,723 from the benchmark FTSE All Share index.
|10 yr chart EDIN -v- FTSE All Share Index|
(click to enlarge)
The trust invests primarily in UK securities with the long term objective of achieving:
- an increase of the Net Asset Value per share by more than the growth in the FTSE All-Share Index; and,
- growth in dividends per share by more than the rate of UK inflation.
Edinburgh has been one of the cornerstones of my income portfolio for several years and is held in both Sipp drawdown and ISA. Earlier in the week it published results for the half year to 30th Sept 2015 (link via investegate).
The Company's share price, including reinvested dividends, rose by 6.6% during the past 6m, compared to a fall of -7.2% (total return) for the benchmark FTSE All-Share Index.
|6m chart v FTSE All Share 2015|
Tobacco stocks - Reynolds, Imperial, BAT and Altria - take up 4 of the top 10 holdings and together account for 19.0% of the portfolio. Maybe not one for the more ethically minded investor!
During the period, the entire holding in GlaxoSmithKline was sold, Rolls Royce was reduced and low cost airline easyJet joined the portfolio.
The board recently announced a 4% uplift in the first quarterly dividend to 5.2p (2014 5.0p) giving a current full year dividend of 24.05p
The yield is 3.4% based on the current share price of ~700p.
This year I have embraced passive index funds as I believe they are more likely to generate a better return than most actively managed funds over time. That said, I fully accept there will always be some managed investments that can genuinely add value and Edinburgh appears to be one of them.
There can be little doubt that index investing works; active investing can work as evidenced by the 10 yr performance and therefore a combination of the two can work. Therefore, lets not throw the baby out with the bath water... it's not either/or but take on board index funds and keep the best of the actively managed funds/trusts.
More on this following the full year results next May, but so far, happy with progress made under the stewardship of the new manager.