Investing mistakes to avoid and why I love NatWest shares

TL;DR

Since taking over the management of the Temple Bar Investment Trust in October 2020, Nick Purvis has improved its performance through portfolio changes and a style rotation benefiting from the positive market sentiment following vaccine announcements.

Transcript

hello with me today i have nick purvis co-manager of the temple bar investment trust hi nick hi good morning lee um you took over the management of the trust at the end of october 2020 and since then performance has markedly improved how much of the portfolio was chopped and changed when you took over were there any previous top 10 holdings sold an... Read More

Key Insights

• 👶 Portfolio turnover occurred when new managers took over the trust, as they had a different interpretation of value investing.
• 📢 The style rotation and positive market sentiment following vaccine announcements significantly contributed to the trust's improved performance.
• 💱 Companies like Royal Mail Group and NatWest Bank benefited from changing consumer behavior and were initially undervalued due to market pessimism.
• 💪 The trust maintains a cyclical portfolio but focuses on companies with strong balance sheets to navigate economic uncertainties.
• 📼 The Temple Bar Investment Trust is currently attractively priced with a discount to its asset value and offers an earnings yield of around 11%.

Questions & Answers

Q: How much portfolio turnover occurred when Nick Purvis took over the Temple Bar Investment Trust?

When Nick Purvis took over, there was a significant amount of turnover as the previous managers had a different interpretation of value, leading to changes in the portfolio.

Q: How did the style rotation and vaccine announcements impact the trust's performance?

The style rotation and positive market sentiment after vaccine announcements contributed significantly to the trust's improved performance. The belief in economic recovery benefited value stocks held by the trust.

Q: Can you provide examples of stocks that were initially considered coronavirus losers but performed well in the portfolio?

One example is Royal Mail Group, which saw a surge in parcel volumes due to changing consumer behavior during lockdowns. Another example is NatWest Bank, which had a low valuation despite improvements in its financials and management's efforts.

Q: What is the rationale behind investing in cyclical stocks despite uncertainty and market volatility?

The trust acknowledges cyclicality and does not seek to remove it entirely. They look for undervalued companies with strong finances that can manage economic downturns without raising fresh equity, allowing them to take advantage of undervaluation when fear drives down prices.

Summary & Key Takeaways

• There was a significant amount of turnover in the portfolio when Nick Purvis took over as co-manager, as the previous value-focused managers had a different interpretation of value.

• The style rotation and confidence in the market following vaccine announcements provided a tailwind for the trust's performance.

• Companies like Royal Mail Group and NatWest Bank, initially considered coronavirus losers, experienced a shift in investor sentiment and performed well due to changing consumer behavior and undervaluation.