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This week we have our first interview with a London-listed investment trust, the FTSE 250 constituent Temple Bar Investment Trust (LON:TMPL).  We had the opportunity to speak to the co-managers Ian Lance and Nick Purves, who are both fund managers at RWC Partners.

The duo took over day to day management of the Temple Bar Investment Trust in November, so this represented an excellent chance to catch up with them. The trust’s investment objective is to provide growth in income and capital and to achieve a long term total return greater than the benchmark FTSE All-Share Index. This is achieved through investment primarily in UK securities, across different sectors with typically the majority of the portfolio selected from the constituents of the FTSE 350 Index.

The trust holds a number of traditional old economy stocks at the moment – the likes of BP, Anglo American and Royal Dutch Shell – so we explored how stocks like this stack up against the ‘trendy’ theme of tech investment and clean energy.

The strategy employed by Temple Bar is known as value investing; that is the process of buying a company’s stock for less than its true worth (sometimes known as its intrinsic value). On the podcast we talk about the impact of the pandemic on stocks, about the sectors the managers like, and whether COVID has created a once in a generation value opportunity for investors. How does this stack up with the 2008 financial crisis or the dot com crash in 2001?

A number of companies are discussed, including several constituents of the airline industry, oil sector, and Royal Mail’s fortunes under lockdown. We also talk about the nature of value traps in the market, and how to tell them apart from serious investment opportunities.

New management team for the Temple Bar Investment Trust

The appointment of RWC as managers of the investment trust was seen as key in turning its fortunes around. According to Arthur Copple, Chair of the Temple Bar Investment Trust:

“For a period, performance of the trust had been worrying. Therefore, when Alastair Mundy, the named fund manager, retired, the board decided to assess whether the new management arrangements were still in the best interests of shareholders. The first step was to assess whether Temple Bar’s value investing strategy remained the most suitable one for shareholders while simultaneously looking to find out what our shareholders wanted.”

The board engaged Stanhope, an independent third party, to analyse whether or not value had had its day and if the approach was still suitable for shareholders. Following Stanhope’s independent review and advice, the board decided to stick with the value approach but change the fund manager.

Lance and Purves joined RWC Partners in August 2010 and together they manage over £3bn in assets. This includes the TM RWC Equity Income Fund and of course now the Temple Bar Investment Trust. Both fund managers worked previously at Schroders before joining RWC. Lance’s career includes a stint at Citigroup where he was Head of European Equities and Director of Research, and he was also Head of Global Research at Gartmore. He and Nick Purves managed the Schroder Income Fund and the Income Maximiser Fund while at Schroders.

The new appointment seems to have done the trick – the price of the trust has surged from just north of the 700 mark in early November, to hit 1144 at time of writing.

Related

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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