The Brunner Investment Trust



Performance, Commentary & Portfolio

ISIN GB0001490001 | SEDOL 0149000

Fund Manager’s Review

Markets continued their upward trajectory in July, buoyed by progress in US trade negotiations and a generally strong start to the second-quarter earnings season. However, the path to trade détente was anything but smooth. President Trump’s 90-day pause on ‘Liberation Day’ tariffs expired mid-month, triggering a flurry of last-minute deal-making. Many leaders were content to simply avoid the higher tariffs which had originally been proposed.

Meanwhile, threats of sanctions against India for purchasing Russian oil, alongside renewed tensions between the US and Russia, added to the geopolitical unease. Adding to the unnerving news flow, the US President escalated his campaign against Federal Reserve Chair Jay Powell, raising fresh concerns about central bank independence and the credibility of US monetary policy at a critical time. The sacking of the head of the Bureau of Labor Statistics, which had just reported weak job numbers, further undermines faith in the economic governance of the world’s largest economy. Despite this, global equity markets remained resilient, supported by robust corporate earnings and ongoing strength in AI related tech stocks.

Against this backdrop, Brunner’s Net Asset Value (NAV) total return for July was 3.9%, behind the benchmark return of 4.8%. While the overall market environment was constructive, performance attribution for the month was mixed. Our overweight positions in Microsoft and Taiwan Semiconductor contributed positively, with each benefiting from strong earnings and continued momentum in AI-related demand. Microsoft’s Azure platform saw accelerating growth and Taiwan Semiconductor continued to benefit from its leadership in advanced chip manufacturing. However, the decision not to hold Nvidia, which surged again in July on the back of strong demand and a relaxation in export restrictions to China, was a significant drag.

While macroeconomic and geopolitical uncertainties persist, we continue to find attractive opportunities across sectors and geographies, particularly in areas where expectations are more muted

Other notable detractors included Align Technology, best known for its Invisalign orthodontic treatments, which fell sharply following disappointing guidance, and Dutch semiconductor equipment company ASML, where tariff-related uncertainty clouded the outlook for 2026. Visa, a large overweight position, also detracted modestly as its performance lagged the broader market.

We added one new holding to the portfolio during the month. Paycom is based in Oklahoma City and is still run by its founder, Chad Richison. The company is a leading provider of human capital management and payroll software. Unlike most competitors who have cobbled together various computer systems acquired over time, Paycom benefits from a single, unified cloud-based software suite. This allows them to offer products and service consistency others struggle to match. The outcome has been a strong record of profitable growth. The stock has recently derated to a multiple we regard as comfortable and we took the opportunity to initiate a medium-sized position.

We also added to our holding in TotalEnergies, where we saw a compelling combination of factors despite recent weakness. The company’s diversified portfolio across oil, gas, and renewables should provide some resilience in a volatile energy landscape. These purchases were funded by a series of small reductions to several existing holdings. We trimmed InterContinental Hotels Group, reflecting signs of slowing travel demand in the US, and American Financial Group, where insurance pricing is seeing some pressure after a long and beneficial upcycle. Jet engine company GE Aerospace was reduced due to our concern over its valuation, now exceeding 40x earnings, while Baltic Classifieds was also trimmed following decent relative performance. We also reduced our holdings in Bank of Ireland and Norwegian bank DNB. Conditions are optimal for banks right now, with favourable interest rates and low credit losses, circumstances that can easily change. We therefore believe the upside potential may have peaked. We also made small reductions to Visa, Roper and Roche.

Looking ahead, we remain focused on optimising the balance between quality, value and growth factors, always with a central focus on cash flow. While macroeconomic and geopolitical uncertainties persist, we continue to find attractive opportunities across sectors and geographies, particularly in areas where expectations are more muted. We believe Brunner is well-positioned to navigate the evolving landscape and deliver long-term value to shareholders.

Julian Bishop & Christian Schneider
8 August 2025

This is no recommendation or solicitation to buy or sell any particular security. Any security mentioned above will not necessarily be comprised in the portfolio by the time this document is disclosed or at any other subsequent date.

Key Information

Launch Date

December 1927

AIC Sector

Global

Benchmark

70% FTSE World ex-UK Index; 30% FTSE All-Share Index

Annual Management Charge

0.45%

Performance Fee

No

Ongoing Charges 1

0.64%

Year End

30 November

Annual Report

Final published in February, Half-yearly published in July

AGM

March/April

Price Information

Dividend Pay Dates

March/April, June/July, September, December

Dividend XD Dates

February, June, August, November

1. Source: AIC, as at the Trust’s Financial Year End (31.11.2023). Ongoing Charges (previously Total Expense Ratios) are published annually to show operational expenses, which include the annual management fee, incurred in the running of the company but excluding financing costs.

Registrations

Company No.

00226323

FATCA GIIN No.

EW9PUZ.99999.SL.826

Codes

RIC

BUT.L

SEDOL

0149000

ISIN

GB0001490001

Awards & Ratings

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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.

A ranking, a rating or an award provides no indicator of future performance and is not constant over time.

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