Portfolio & Performance

ISIN GB0001490001
SEDOL 0149000

Share Price is the price of a single ordinary share, as determined by the stock market. The share price above is the mid-market price at market close.
Share Price

Net Asset Value (NAV) per Share is calculated as available shareholders’ funds divided by the number of shares in issue, with shareholders’ funds taken to be the net value of all the company’s assets after deducting liabilities. The NAV figure above is based on the fair/market value of the company’s long-term debt and preference shares (known as debt at market value). This allows for the valuation of long-term debt and preference shares at fair value or current market price, rather than at final repayment value (known as debt at par).
NAV per Share

Premium/Discount. Since investment company shares are traded on a stock market, the share price that you get may be higher or lower than the NAV. The difference is known as a premium or discount.

Dividend Yield is calculated using the latest full year dividend divided by the current share price.
Dividend Yield

Data source DataStream and Allianz Global Investors as at 14.11.2019 based on market close mid price.

Awards & Ratings

Morningstar Rating: The Morningstar Rating is an assessment of a fund’s past performance – based on both return and risk – which shows how similar investments compare with their competitors. A high rating alone is insufficient basis for an investment decision.
Morningstar Bronze Rating: Morningstar analysts assign these ratings on a five-tier scale with three positive ratings of Gold, Silver, and Bronze, a Neutral rating, and a Negative rating. If a fund receives a positive rating it means Morningstar analysts think highly of the fund and expect it to outperform over a full market cycle of at least five years.
© 2019 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.
The Morningstar Analyst Rating for Funds is a forward-looking analysis of a fund. Morningstar has identified five key areas crucial to predicting the future success of a fund: People, Parent, Process, Performance, and Price. The pillars are used in determining the Morningstar Analyst Rating for a fund. Morningstar Analyst Ratings are assigned on a five-tier scale running from Gold to Negative. The top three ratings, Gold, Silver, and Bronze, all indicate that our analysts think highly of a fund; the difference between them corresponds to differences in the level of analyst conviction in a fund’s ability to outperform its benchmark and peers through time, within the context of the level of risk taken over the long term. Neutral represents funds in which our analysts don’t have a strong positive or negative conviction over the long term and Negative represents funds that possess at least one flaw that our analysts believe is likely to significantly hamper future performance over the long term. Long term is defined as a full market cycle or at least five years. Past performance of a security may or may not be sustained in future and is no indication of future performance. For detailed information about the Morningstar Analyst Rating for Funds, please visit http://global.morningstar.com/managerdisclosures.


The data shown is not constant over time and the allocation may change in the future. Totals may not sum to 100.0% due to rounding. All data source Allianz Global Investors unless otherwise stated.

Top 20 Holdings (%)

Muenchener Rueckver
UnitedHealth Group
Royal Dutch Shell - B Shares
Visa - A Shares
Taiwan Semiconductor
Estée Lauder
Cooper Cos
Agilent Technologies
AIA Group
Microchip Technologies
Schneider Electric

Data as of 30.09.2019

Sector Breakdown (%)

Health Care
Consumer Goods
Consumer Services
Basic Materials
Oil & Gas

Data as of 30.09.2019. Excludes Cash

Geographic Breakdown (%)

North America 43.7
UK 24.7
Europe ex UK 23.5
Pacific ex Japan 5.7
Japan 2.5

Data as of 30.09.2019. Excludes Cash

Fund Manager Comments

Market Review

In aggregate, global equities made modest gains in September, recovering from their steep August decline. Once again, interest rate cuts from the US and European central banks, as well as signs that US-China trade relations might be improving, helped to improve investor sentiment. However, global economic data remained lacklustre, with US manufacturing notably slipping into contraction territory.

At a sector level, Financials performed the best, helped by rising bond yields. There was also a marked shift in investor positioning: stocks which had performed consistently well year-to-date saw pullbacks, while stocks valued at lower multiples rallied strongly. This rotation out of momentum stocks into value names has largely happened as repositioning within individual sectors rather than a wholesale shift out of higher momentum sectors, although the lower-momentum Energy and Utilities sectors also outperformed.

Such moves are often driven by sharp improvements in economic sentiment, yet this remains weak. Sterling strengthened over September, following parliament’s move to block a ‘no deal’ departure from the European Union on 31 October.

An attack on two oil plants in Saudi Arabia oil caused prices to surge 20% as a result, with Brent crude peaking at 70 USD a barrel. This later eased to under 60 USD, as Saudi Arabia pledged to restore output by the end of the month.

Portfolio Review

The Trust’s NAV rose 1.63% against a benchmark return of 1.61%. This outperformance was driven by strong stock selection in the Industrials and Health Care sectors, offsetting moderately weaker stock picking in Consumer Goods and Consumer Services.

As well as being the portfolio’s best-performing Industrials stocks, Tyman and Sthree made the largest positive contributions to returns overall. Both companies benefitted strongly from the market’s rotation towards more lowly-valued stocks, rallying almost twenty per cent. We saw particular benefit from our position in Tyman, to which we had added, following an excessive price move after soft H1 results.

In addition, SThree delivered a solid Q3 trading update. The STEM (science, technology, engineering and mathematics) focused recruiter has been overly punished for its UK exposure, but with strong fee growth in Europe and the USA, this is an increasingly small part of the business. By focusing on contract workers in a specialist niche, SThree is able to weather tougher conditions better than peers.

UnitedHealth Group has made the largest negative contribution to returns. The US-based provider of integrated health care has suffered as a result of vocal support for Universal Healthcare from a range of Democratic Presidential candidates. However, current valuations are pricing the roll-out of this policy as an almost certain event. Given the previous difficulty of passing “Obamacare”, we view this discount as excessive and maintain our position.

The Cooper Companies have also eroded returns. The maker of contact lenses and specialist healthcare items reported Q3 revenues which came in moderately below expectations, as well as softer full year guidance. Underlying demand trends remain strong and we have added to our position as a result.

Significant Transactions

Our conviction in Covestro has weakened as the specialist plastic manufacturer’s growth targets become less certain. As a result, we have used the recent share price rally to sell our holding.

We have initiated a position in International Flavors & Fragrances. IFF operates in an oligopolistic industry with stable growth, high returns and a yield of 2.5%. The company has de-rated as a result of slower growth and the expensive acquisition of Frutarom, which has given an attractive entry point.

Market Outlook

October’s weak US manufacturing data mean the US now joins China and Europe in a global industrial contraction. Having previously bucked the trend, the trade war’s effects are now being felt at home. The slowdown is already weighing on Industrials and Materials stocks, but a sustained manufacturing downturn may spread to as yet resilient Service sectors.

In the face of this, central banks are attempting to stimulate demand. September saw the US Federal Reserve and the European Central Bank cut rates by 0.25% and 0.5%, respectively. President Trump castigated Chair Powell’s relative restraint, but Mario Draghi’s own message was clear: “Now is the time for fiscal policy to take charge”. With the Federal Reserve suggesting further cuts are unlikely, there are genuine question marks over what more monetary policy can achieve.

A US-China trade resolution therefore is one of few tangible sources of potential economic stimulus. Yet despite positive rhetoric, President Trump’s actions have been consistently antagonistic. Recent reports suggest the US is now considering limiting investor flows into China, a substantial escalation beyond trade tariffs.

Even so, equity valuations remain close to all-time highs. Indeed, the recent value rally showed that investors had simply come to view these stocks as too cheap. However, the economic growth which would truly boost value stocks remains elusive, and valuation multiples continue to reflect a preference for non-cyclical growth.

This contradiction between valuations and fundamentals will be a key driver of volatility over the coming months. We have positioned the portfolio accordingly, consistently reducing our exposure to stocks with overextended valuations and adding to those on more reasonable multiples. Consequently, active stock selection continues to be the main long-term driver of returns, despite recent headwinds.

Lucy Macdonald 15 October 2019

active stock selection continues to be the main long-term driver of returns, despite recent headwinds

This is no recommendation or solicitation to buy or sell any particular security.


Performance (%)

Select period:

    Cumulative Returns (%)

    3M 6M 1Y 3Y 5Y
    Share Price 0.5 11.9 8.5 54.6 79.2
    NAV (debt at fair value) 1.5 9.2 6.0 38.5 72.8
    Benchmark 3.1 9.0 6.6 35.9 68.2

    Source: Thomson Reuters DataStream, percentage growth, mid to mid, total return to 30.09.2019.1

    Discrete 12 Month Returns to 30 September (%)

    2019 2018 2017 2016 2015
    Share Price 8.5 11.7 27.6 14.7 1.1
    NAV (debt at fair value) 6.0 9.7 19.1 26.6 -1.4
    Benchmark 6.6 12.1 13.7 24.4 -0.5

    Source: Thomson Reuters DataStream, percentage growth, mid to mid, total return as at 30.09.2019.1

    1Past performance is not a reliable indicator of future returns. You should not make any assumptions on the future on the basis of performance information. The value of an investment and the income from it can fall as well as rise as a result of market fluctuations and you may not get back the amount originally invested.This investment trust charges 70% of its annual management fee to the capital account and 30% to revenue. This could lead to a higher level of income but capital growth will be constrained as a result.

    Copyright 2019 © DataStream, a Thomson Reuters company. All rights reserved. DataStream shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

    © Allianz Global Investors GmbH 2019, Registered Office: Frankfurt am Main, Register: HRB 9340, Local court: Frankfurt am Main. All Rights Reserved. The Brunner Investment Trust PLC is incorporated in England and Wales. (Company registration no. 226323). Registered Office: 199 Bishopsgate, London, EC2M 3TY. VAT registration no. 244 7355 54. The Company is a member of the Association of Investment Companies - Category: Global Growth.