Welcome to this Bankers Interim Update.

Performance

Bankers delivered a solid six months, despite choppy markets with global tensions, rising prices, and rapid advances in AI creating some uncertainty in some sectors.

Even so, markets held up actually very well, with the strong company results helping shares recover to new highs.

This was led by the US market, but also technology, and memory companies.

Share price total return was 6.5%, outperforming the benchmark FTSE World Index, which rose by 5.5%.

The net asset value total return was 3.7%, slightly below the benchmark.

Finally, the dividend.
We declared a second interim dividend of 0.707, which is actually a 3.1% increase over the year.

And now Richard will talk about some of the performance drivers for the trust.

Portfolio contributors

In terms of the drivers of performance, you know, the key sectors were technology, unsurprisingly, given some of the, the AI optimism, and also energy, just given some of the, the events in the Middle East.

Within technology, very bifurcated.

So obviously semiconductors, you know, performing very well.

You know, we always talk in Bankers about following the cashflow.

Well, there’s a generational shift of cashflow from the hyperscalers spending that AI CapEx to the semiconductor companies, and we own plenty of the beneficiaries of that, whether it be memory companies like Micron, semi-cap, equipment makers, like an Applied Materials, both names that we added through some of the changes in the US sleeve when I took over, back in October.

But also globally, so MediaTek and, and TSMC in Taiwan were also, key performers, in the portfolio.

On the energy side, you know, some of our names like a TotalEnergies here in Europe.

So it really was a kind of very global, sort of performance in terms of some of those key contributors.

Portfolio detractors

And then on the flip side, yeah, some of our negative contributors were very much in that sort of disruption bucket, or at least perceived, by the market.

So some of the software names that we owned, even though we tried to be very selective in cybersecurity or in data infrastructure, those names are often owned in ETFs or in baskets, and they’re just sold all together in a uniform basis.

That creates opportunities, but in the near term, that can lead to volatility in those stock prices.

And again, even more broadly beyond software, we’ve seen, you know, impacts of perceived disruption in some of the internet platforms, you know, Spotify, or a Netflix, as well as, you know, even an insurance broker like an Arthur J Gallagher that’s potentially could be disrupted by agentic AI.

Again, we think that, demonstrates a misunderstanding of the franchises of these companies, how these industries work, and ultimately how AI is gonna be used in some of these industries.

And again, we wanna stick with those, stocks through that, but there will be near-term volatility as many investors seek to kind of sell first and ask questions, later.

And that leads into some of the changes we’ve made in the portfolio.

Obviously, we started this period with some of the changes that we’ve made in the US sleeve as I came on to manage that.

And we’ve, you know, just generally been on a journey of unifying that portfolio and then bringing down the number of sleeves, increasing the conviction, bringing down the number of stocks.

And during this period, we took the next step in that journey, which was to remove the sleeves completely and unify that portfolio into one global portfolio of the high-conviction ideas from all of our investors globally at Janus Henderson, and retaining that local and regional expertise from Junichi in Japan, Sat, in Asia as well.

And that, you know, allows us to unify not just, you know, the stocks, and from a risk management point of view, but also from the trends and themes that we’re trying to take advantage of and create those investment opportunities, for us globally.

So we’ve completed that step at the end of this period, and that will be kind of going forward.

We’ll have around 70 stocks, which will reflect many of our high-conviction ideas from around, the globe.

Outlook

So in terms of our outlook, looking ahead, we expect markets to remain somewhat volatile, particularly the backdrop in the US market and obviously tensions in the Middle East.

By the time you watch this, I’m sure things will have changed, yet again.

I think we still do believe, though, that the all parties want to negotiate a sort of resolution, and therefore hopefully that can shift us to lower inflation, and start to talk about interest rates being cut rather than as we’re seeing, central banks starting to raise rates.

And that’s important, I think, for the equity market.

However, when we look really at companies and companies of what we own in the trust, you know, corporate profits are continuing to grow, which is supporting, the markets and share prices.

Having said that, obviously share prices back to their high levels, new highs in, in quite a few markets, and therefore we’re mindful of valuations given that.

There are some risks of over-exuberance in certain areas.

So our focus remains really right on looking at the right companies to own, where profits are gonna grow, where cashflow is supporting those profits and their capital expenditure plans, and really trying to navigate that over the long term.

Corporate update

And finally, I’d like to announce that it’s time for me actually to hand over the baton of managing Bankers Investment Trust to Richard.

I’ve been very lucky to be associated with the trust for actually 25 years, but 23 years of managing it, being its lead manager, and it’s been a great honour, to be part of Bankers’ 138 years of history.

And I’ve seen a lot of change in investment markets and a lot of challenges in that time, but we’ve weathered them very well.

The trust has grown from sort of 200 million to nearly 1.5 billion at one point, and delivered 11% annualised return.

So very proud of what I’ve delivered and, how I’ve represented the trust, but very much I’m looking forward to staying as a shareholder and seeing how the future unfolds with Richard as, lead manager.

And maybe that gives me, you know, the great honour of being able to, you know, I think say thank you from myself personally, having worked for you, with you for the last 12 years, and thank you, I think from all of our shareholders.

You know, you just laid out, you know, the great returns over the last, you know, 23 years, and also for, from our board in terms of everything that you’ve done, for Bankers.

You know, as you say, 138 years of history.

You know, there’s some great chapters in that, and you’ve written, you know, a great chapter there over the last quarter of a century.

And, you know, again, I’m very honoured to be able to take that forward and appreciate your trust and confidence, in choosing me. Great.

Thank you.
Thank you, everybody.