<!–
<!–
<!– <!–
<!–
<!–
<!–
Gervais Williams says he is more bullish on British shares than ever before in his 30-year career at City.
Williams, head of equities at investment house Premier Miton, believes a combination of upcoming rate cuts, economic recovery and the end of globalization could spark a rebound in the UK stock market in the coming months.
“We are in a beautiful place,” he says. ‘The next five years could offer investors some exciting returns in the UK stock market, especially in terms of nice growing incomes.’
Williams is a fund manager specializing in British investments. Together with Martin Turner, he heads several investment funds and listed investment funds for Premier Miton. This includes the UK Smaller Companies, UK Multi Cap Income funds and the UK MicroCap investment trust.
The duo also oversee The Diverse Income Trust, which, as the name suggests, generates income from across the UK stock market.
That means holding not only dividend-friendly stocks, such as energy giants BP and Shell, but also income-friendly stocks that remain off the radar of most investors.
The result is a portfolio consisting of 107 holdings, with greater exposure to the FTSE Aim Index (30 percent) than to the FTSE100 (23 percent). “We look for revenue wherever we can find it,” Williams said. ‘Growing income is the beauty of the portfolio.’
In terms of income, the trust has been a success since its inception in April 2011, with Williams at the helm; Turner joined a month later.
Total annual income paid out to shareholders increased slightly, although occasional one-off special dividends (for example in the year to end May 2019) mean the company cannot claim a long track record of consecutive annual dividend increases – such as competing British equity funds such as City of London and JPMorgan Claverhouse.
In the current financial year (to the end of May 2024), the £268m fund has made two quarterly payments of 1p per share so far, a small increase of 0.05p on the equivalent dividends paid out the previous year. To put this into context, the trust’s shares trade at around 85 cents, with the annual dividend equivalent to a 4.8 per cent yield.
Yet, in common with many UK-focused investment funds with significant exposure outside the FTSE100 Index, overall capital returns have been poor. For example, over the past three years, shareholders have suffered a total loss of almost 14 percent.
However, Williams is convinced a turnaround is coming – and the short-term numbers suggest it may already have begun. Over the past month, the trust has posted a gain of 2.9 percent.
“Interest rate cuts are imminent,” he says. ‘The ability to raise capital is becoming easier for UK businesses. It’s all quite exciting.’
Successful investments include Aim-listed energy company Yu Group, which the trust invested in six months ago.
“It’s way ahead of its rivals in terms of customer service,” Williams says. The shares have risen more than 20 percent since the trust bought into them.
Toilet paper supplier Accrol, a trust holding company, is currently a takeover target of Portuguese rival Navigator. Williams is not impressed. “We don’t want the companies we own to be taken over,” he says. ‘We have them in the portfolio because we like them.’
The trust has a stock exchange identification code of B65TLW2 and a market ticker of DIVI. The annual costs are just under 1.1 percent.