Shares in the Edinburgh Investment Trust (EDIN) ticked up 0.7% to 636p after it beat its FTSE All-Share benchmark and declared a special dividend.
For the financial year ended 31 March 2021, the trust’s net asset value on a total return basis was 34.8%, while in share price terms it returned 46.4% during the period compared with a total return of 26.7% for the FTSE All-Share.
The trust’s board recommended a final dividend of 6p per share and decided to pay a special dividend of 4.65p. ‘This supplements the underlying distribution of 24p and results in a total distribution of 28.65p, unchanged from the previous financial year,’ it said.
‘DARWINIAN WINNER’ ASHTEAD TOP CONTRIBUTOR
The top contributor to performance for the trust over the year was equipment hire firm Ashtead (AHT), with shares in the investor favourite having more than trebled from their March 2020 lows.
Manager James de Uphaugh says Ashtead, the trust’s top performer over the period, is a ‘cyclical business, with a positive structural undercurrent, and thus it has benefitted from economies emerging from lockdowns’, emphasizing that its management has ‘maintained a clear focus on the long-term success of the business, despite the many challenges of the last fifteen months.’
He adds: ‘This is a great example of what we describe as a Darwinian winner: one that is gently crunching the competition. It is emerging from the economic crisis even stronger.’
WEIR AND ANGLO AMERICAN STRONG PERFORMERS
Two other top performers were resources engineer Weir Group (WEIR) and miner Anglo American (AAL). Weir delivered strong performance as mining and infrastructure markets began to strengthen again, and de Uphaugh says the firm is in a ‘sweet spot’ as its customers, mainly the major mining companies, look to its engineering solutions to help improve their safety, efficiency and sustainability in an increasingly ESG-focused industry.
Meanwhile Anglo American shares jumped during the period as the firm benefitted from rising commodity prices, particularly iron ore prices.
Another significant contributor to the trust’s NAV returns ahead of the index was borrowings, with its decision to invest most of its long-term borrowings accounting for 3.5% of the 8.1% excess return against its benchmark index.
