Bankers Investment Trust: dividends, bank shares and themes

TL;DR

Dividend heroes face challenges amid dividend pressure, but remain optimistic about future growth. The US election is unlikely to bring significant changes to the economy. Key themes to watch are the green economy and the impact of quantitative easing on inflation. Tech stocks may still have room for growth, but investors should consider fundamentals and potential disruptions.

Transcript

hello with me today i have alex crook portfolio manager at the bankers investment trust hello alex hello now alex uh bankers is one of the so-called dividend heroes it's uh raised the annual dividend every year since 1967 and clearly it's a record you're proud of but how difficult has it been to continue that record especially in recent months with... Read More

Key Insights

• 🫢 Dividend heroes face challenges due to dividend cuts in sectors such as UK financials and oil and gas.
• ❓ The US presidential election is unlikely to have a significant impact on stock prices, as both candidates prioritize job creation and supporting the economy.
• 🤩 Key themes to watch are the green economy, with a focus on carbon reduction, and the impact of quantitative easing on inflation.
• 💗 Tech stocks may continue to grow, but investors should consider fundamentals and potential disruptions.
• 🌸 UK banks are not currently attractive due to low interest rates and loan loss concerns.
• 🌱 The Bankers Investment Trust plans to draw on reserves to maintain dividend growth.
• 😮 The future of inflation is mixed, with some anticipating rising trends and others highlighting limited demand.

Questions & Answers

Q: How has the Bankers Investment Trust managed to maintain its record of raising dividends?

The trust has navigated through challenging sectors such as UK financials and oil and gas, although some stocks in their UK portfolio experienced dividend cuts. They plan to use reserves to maintain dividend growth.

Q: What impact do you expect the US presidential election to have on stock prices?

The election is unlikely to bring significant changes as both candidates prioritize job creation and supporting the economy. The key driver of economic growth and policy remains the Federal Reserve.

Q: Are there any other themes you are closely watching or investing in?

The green economy is a focus, as governments prioritize carbon reduction. Investing in businesses driving these trends, such as electric transportation, can lead to opportunities. The impact of quantitative easing on inflation is also a key concern.

Q: What is the house view on inflation and its implications for financials?

Views on inflation are mixed, with some seeing limited demand and others anticipating rising inflation trends. The future of inflation depends on the economic recovery, with factors like vaccine availability playing a crucial role. Financial sectors could benefit if inflation rises.

Q: With the extreme rally in US tech stocks, what advice do you have for investors in those areas? Where should investors be looking now?

While tech stocks have shown strong revenue growth and reinvestment, investors should consider fundamentals and look out for slippages in forecasts and revenue growth. Disruption can also impact the success of these stocks. UK banks are currently unappealing due to low interest rates and loan loss concerns.

Summary & Key Takeaways

• The Bankers Investment Trust has raised its annual dividend for over 50 years, but recent months have posed challenges due to dividend cuts in certain sectors.

• The US presidential election is unlikely to have a major impact on stock prices as both candidates prioritize job creation and supporting the economy.

• Key themes to watch are the green economy, with governments prioritizing carbon reduction, and the impact of quantitative easing on inflation trends.