The trust, one of Scotland’s oldest, saw its net asset value (NAV) in total return terms grow by 9.8 per cent over the six months to the end of September, compared to an 8 per cent rise in the FTSE All-Share index. An interim dividend of 6p per share is due to be paid later this week.
Fund manager James de Uphaugh of Majedie Asset Management, which last year took over the running of the 132-year-old trust after several years of underperformance, said: “There are several compelling reasons to think that the UK equity market can generate further attractive returns on a medium-term view.
“The gains we are reporting on for the last six months were despite a combination of tempering growth rates here and abroad, ongoing supply bottlenecks, and rising energy prices.
“There is no question pricing pressures are more prevalent now than in other inflationary spikes over the last decade, but we take reassurance from the fact that the portfolio is dominated by companies that have pricing power and strategic strength that we believe will afford greater protection against cost inflation.”
Since Majedie became the day-to-day manager of the trust at the end of March 2020, net asset value has risen by 48 per cent, compared with 36.8 per cent for the FTSE All-Share.
De Uphaugh added: “Overall, the UK is widely regarded as a great place to do business with strong companies.
“The return of overseas/marginal investors, boosted by the growing appetite for takeovers from foreign companies or private equity funds, is a positive endorsement of the UK market.
“Furthermore, the valuation discounts relative to other equity markets highlight the opportunity in UK equities.
“We believe the market is taking a short-term view of the prospects for many businesses in the UK, which provides opportunities for investors willing to look through the current macroeconomic headwinds.”
Chairman Glen Suarez said: “It is encouraging to see the foundations of a strong long-term track record beginning to take shape. While growth in NAV has been encouraging, over the last six months the discount has widened.”