Portfolio & Performance


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 16.01.2020 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
Imperial Brands
British American Tobacco
BAE Systems
Land Securities
Legal & General
Standard Life Aberdeen
St James's Place

Data as of 31.12.2019

Geographic Breakdown (%)

UK 96.9
Cash 3.1

Data as of 31.12.2019

Sector Breakdown (%)

Consumer Goods
Consumer Services
Oil & Gas
Health Care
Basic Materials

Data as of 31.12.2019

Market Cap Breakdown (%)

FTSE 100 62.3
FTSE 250 24.4
Small Cap 10.2
Cash 3.1

Data as of 31.12.2019

Fund Manager Comments

The key market event in December was the UK general election on 12th December, at which Boris Johnson’s Conservative party secured a convincing victory and a majority of 80 seats. This will allow him to push his EU Withdrawal Bill through parliament, so that the UK can leave the European Union at the end of January 2020. This result lifted sentiment towards UK assets, with the pound and stock markets both rallying. There were two main reasons for this response. Firstly, there is now more clarity on the Brexit process which has been mired in uncertainty since June 2016’s referendum. This should allow businesses and consumers to plan with a bit more certainty, although the future trading arrangements with the EU are yet to be agreed. Secondly, Jeremy Corbyn’s Labour party performed poorly in the election. Investors had been nervous about their fairly radical left wing agenda, which included nationalisations, higher business taxation and a substantial increase in public spending. With a clear majority in Parliament, the Conservatives can now pursue a more market friendly agenda, which had been difficult under the previous gridlock.

There were also positive developments in the ongoing trade dispute between the USA and China, with the USA agreeing to roll back certain tariffs and China agreeing to purchase specific US goods and services as well as agreeing to structural reforms.

The stock market had a strong finish to a strong year, with a 3.3% total return on the FTSE All-Share index. Medium and smaller sized companies, which tend to be more domestically exposed, outperformed, reacting to the election result. The best performing sectors included utilities, as the possibility of renationalisation receded, and several of the more cyclical and financial sectors, as well as tobacco. The weakest sectors included defensive industries like mobile communications, aerospace & defence, oil & gas producers and beverages.

The portfolio outperformed the stock market, driven by double digit total returns from a number of medium and smaller sized companies, such as Balfour Beatty, Keller, Bovis Homes and Pennon. There were fewer negative contributors, but BAE Systems, Senior and National Express underperformed. The Trust’s NAV consequently rose by 6.9% in December, well ahead of the benchmark return of 3.3%.

We made a new small investment in Norcros, which designs, manufactures and sells showers, taps, tiles, adhesives and other bathroom related products in the UK and South Africa. Key brands include Triton, the UK market leader in electric showers, Vado taps and Johnson Tiles. In recent years the business has been built by acquisitions of businesses selling complementary products, enabling the company to benefit from sharing overheads and cross-selling. The company has a strong record of earnings and dividend growth, helped by market share gains, as they have shifted the business mix from DIY towards trade suppliers and large housebuilders. However, like many smaller UK companies exposed to the domestic consumer, the shares have been out of favour and traded on a very lowly valuation. We thought that the low valuation did not reflect the favourable prospects for the business, even allowing for a large pension liability.

We sold the remaining holding in TP ICAP, the financial trading company, which performed well in 2019 and became fully valued. Elsewhere, we continued to add to attractively priced shares like Stock Spirits and PZ Cussons and we made small reductions to some of the domestic and financial stocks that had a strong rally into and after the general election, such as Legal & General, Standard Life Aberdeen and Bovis Homes.

As we enter 2020, some of the political uncertainty that has plagued the UK since the Brexit referendum in June 2016, has been removed. We now have a government with a clear majority and a much clearer path towards Brexit at the end of this month, although the important issue of the future trading relationship between the UK and EU remains unclear and could lead to volatility in the months ahead. We should be entering a more normal period for equity investors. The fundamental qualities of companies, such as the strength of their competitive positions and their growth prospects, should matter more than whether they are domestic or internationally focused, and whether they are large or small. This should be a good environment for stock picking. The portfolio comprises many strong businesses, paying high and growing dividends, in aggregate, and trading on attractive valuations.

Simon Gergel 16 January 2020

This should be a good environment for stock picking.

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


Performance (%)

Select period:

    Cumulative Returns (%)

    Share Price15.017.128.444.054.5
    NAV (debt at fair value)14.315.932.030.551.3

    Source: Thomson Reuters DataStream, percentage growth, mid to mid, total return to 31.12.2019.1

    Discrete 12 Month Returns to 31 December (%)

    2019 2018 2017 2016 2015
    Share Price28.4-3.115.710.9-3.3
    NAV (debt at fair value)32.0-13.414.213.22.4

    Source: Thomson Reuters DataStream, percentage growth, mid to mid, total return as at 31.12.2019.1

    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.