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Portfolio & Performance

ISIN GB0005800072
SEDOL 0580007

Share Price is the price of a single ordinary share, as determined by the stock market. The share price above is the mid-market price at market close.
Share Price

Net Asset Value (NAV) per Share is calculated as available shareholders’ funds divided by the number of shares in issue, with shareholders’ funds taken to be the net value of all the company’s assets after deducting liabilities. The NAV figure above is based on the fair/market value of the company’s long-term debt and preference shares (known as debt at market value). This allows for the valuation of long-term debt and preference shares at fair value or current market price, rather than at final repayment value (known as debt at par).
NAV per Share

Premium/Discount. Since investment company shares are traded on a stock market, the share price that you get may be higher or lower than the NAV. The difference is known as a premium or discount.

Dividend Yield is calculated using the latest full year dividend divided by the current share price.
Dividend Yield

Data source DataStream and Allianz Global Investors as at 23.05.2019 based on market close mid price.

Awards & Ratings

RSMR Rating: The Merchants Trust has been awarded RSMR’s ‘R’ rating, widely recognised as a mark of quality for funds, ranges and investment trusts that receive this seal of approval. The RSMR research process results in a list of investment trusts which are the trusts that RSMR feel have a robust, repeatable process and the ability to deliver strong performance in the future.
The RSMR rating is designed for use by professional advisers and intermediaries as part of their advice process. This rating is not a recommendation to buy. If you need further information or are in doubt then you should consult a professional adviser.


The data shown is not constant over time and the allocation may change in the future. Totals may not sum to 100.0% due to rounding. All data source Allianz Global Investors unless otherwise stated.

Top 10 Holdings (%)

Royal Dutch Shell 'B' Shares
HSBC Holdings
Imperial Brands
British American Tobacco
BAE Systems
Legal & General
Standard Life Aberdeen
St James's Place
BHP Group

Data as of 30.04.2019

Geographic Breakdown (%)

UK 96.9
Cash 3.1

Data as of 30.04.2019

Sector Breakdown (%)

Consumer Goods
Consumer Services
Oil & Gas
Health Care
Basic Materials

Data as of 30.04.2019

Market Cap Breakdown (%)

FTSE 100 61.6
FTSE 250 27.9
Fledgling 0.7
Small Cap 6.7
Cash 3.1

Data as of 30.04.2019

Fund Manager Comments

April was a relatively strong month for equity markets, continuing the sharp recovery since December. Investors took encouragement from positive economic data in the USA and China, as well as signs that these two countries were moving closer to resolving their trade dispute. The European Union extended the deadline for Brexit, as Parliament had still not agreed the prime minister’s withdrawal bill. The UK stock market took encouragement from hopes that the UK will avoid a hard Brexit, despite strong support in opinion polls for a new Brexit party, which has been formed by former UKIP leader Nigel Farage to contest the forthcoming EU elections.

Over the month, the UK stock market produced a positive return of +2.7%, with medium sized companies outperforming larger companies. The best performing sectors included financials and cyclicals such as life insurance, financial services, construction and media, whilst several defensive sectors, such as tobacco, pharmaceuticals and electricity, produced negative returns.

The portfolio outperformed the rising market, with the Trust’s NAV rising by 4.8%. St James’s Place and Standard Life Aberdeen gave double digit returns in the month, reflecting recovering investment markets, whilst WPP was also very strong, on increased confidence in the company’s turnaround strategy. The other notable positive performance effect came from not owning AstraZeneca, which underperformed, and held back the index return. There were few significant underperformers in the portfolio, but Imperial Brands and SSE were weak, along with other defensive companies. Greene King also pulled back sharply at the month end, after a very strong rally on improved trading in its pubs and restaurants.

Our value driven investment philosophy involves a regular reassessment of companies in the portfolio, to ascertain whether we still have strong conviction in the investment case, or if we should be adjusting the position size to reflect a different view on the value opportunity or the level of risk. Having seen a wide dispersion of share price returns in recent months, we took advantage of opportunities to add to cheap companies which have lagged the wider market, where we see significant upside. We added to PZ Cussons, British American Tobacco, ITV, National Grid and National Express among others. Conversely we took money out of shares which had performed well, where we felt the upside was more limited, including Ashmore, BHP, Prudential, Legal & General and Tate & Lyle.

The stock market has recovered in the first few months of this year, erasing most of the losses in the last quarter of 2018. Despite this move, aggregate valuations of UK companies are very reasonable on a long term basis. Whilst many investors are concerned about the potential impact of Brexit on the British economy, it should be remembered that the bulk of sales and profits of UK listed companies actually comes from abroad. Many large companies, in industries ranging from oil & gas and mining to pharmaceuticals and aerospace & defence actually have limited exposure to the domestic economy.

Not only is the overall stock market reasonably valued, but there is a high dispersion of valuations. Perceived high quality or non-cyclical companies are generally trading on high valuations, whilst many other sound companies are trading at low, or in some cases, exceptionally low levels. The Merchants Trust portfolio is heavily biased towards these “value” investments and we believe that, in aggregate, these shares can deliver a combination of an above average dividend yield and a good total return, commensurate with the Trust’s objectives.

Simon Gergel 10 May 2019

Having seen a wide dispersion of share price returns in recent months, we took advantage of opportunities to add to cheap companies which have lagged the wider market, where we see significant upside.

This is no recommendation or solicitation to buy or sell any particular security.


Performance (%)

Select period:

    Cumulative Returns (%)

    3M 6M 1Y 3Y 5Y
    Share Price 6.3 6.6 2.4 40.9 26.2
    NAV (debt at fair value) 8.7 6.6 -1.3 33.8 28.7
    Benchmark 7.8 6.4 2.6 34.6 33.4

    Source: Thomson Reuters DataStream, percentage growth, mid to mid, total return to 30.04.2019.1

    Discrete 12 Month Returns (%)

    2019 2018 2017 2016 2015
    Share Price 2.4 14.5 20.2 -10.8 0.5
    NAV (debt at fair value) -1.3 13.3 19.5 -9.9 6.7
    Benchmark 2.6 8.2 21.3 -6.8 6.4

    Source: Thomson Reuters DataStream, percentage growth, mid to mid, total return to 30.04.2019.1

    1Past performance is not a reliable indicator of future returns. You should not make any assumptions on the future on the basis of performance information. The value of an investment and the income from it can fall as well as rise as a result of market fluctuations and you may not get back the amount originally invested.This investment trust charges 65% of its annual management fee to the capital account and 35% to revenue. This could lead to a higher level of income but capital growth will be constrained as a result.

    Copyright 2019 © DataStream, a Thomson Reuters company. All rights reserved. DataStream shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

    © Allianz Global Investors GmbH 2019, Registered Office: Frankfurt am Main, Register: HRB 9340, Local court: Frankfurt am Main. All Rights Reserved. The Merchants Trust PLC is incorporated in England and Wales. (Company registration no. 28276). Registered Office: 199 Bishopsgate, London, EC2M 3TY. The Company is a member of the Association of Investment Companies - Category: UK Equity Income.