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Stock Analysis & ValuationThe Brunner Investment Trust PLC (BUT.L)

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£1,440.00
Sector Valuation Confidence Level
High
Valuation methodValue, £Upside, %
Artificial intelligence (AI)608.41-58
Intrinsic value (DCF)569.22-60
Graham-Dodd Method22.21-98
Graham Formula276.48-81

Strategic Investment Analysis

Company Overview

The Brunner Investment Trust PLC (LSE: BUT.L) is a well-established, UK-domiciled open-ended equity mutual fund managed by Allianz Global Investors GmbH. Founded in 1927, the trust invests globally across diversified sectors, focusing on growth stocks with strong business models, financial strength, and brand equity. Its benchmark is a composite of 50% FTSE All-Share Index and 50% FTSE All-World ex UK Index (£). With a market cap of approximately £587 million, Brunner offers investors exposure to a diversified portfolio of high-quality equities, balancing UK and international markets. The trust is known for its long-term investment approach, targeting capital appreciation and income generation, making it a compelling option for investors seeking global equity exposure with a UK bias. Its consistent dividend payments (23.75p per share) and low beta (0.495) suggest relative stability compared to broader equity markets.

Investment Summary

The Brunner Investment Trust PLC presents a balanced investment proposition with its globally diversified equity portfolio and focus on growth stocks. Its low beta indicates lower volatility relative to the market, appealing to risk-averse investors. The trust’s strong net income (£96.05 million) and consistent dividend yield (23.75p per share) underscore its income-generating capability. However, its reliance on equity markets exposes it to macroeconomic risks, and its performance is tied to Allianz Global Investors' stock-picking acumen. The absence of debt is a positive, but the fund’s relatively small size (£587 million market cap) may limit liquidity for large investors. Overall, Brunner is suitable for long-term investors seeking global equity exposure with a stable income component.

Competitive Analysis

The Brunner Investment Trust PLC differentiates itself through its long-term investment horizon, global diversification, and focus on high-quality growth stocks. Its composite benchmark (50% UK, 50% ex-UK) provides a balanced risk profile, appealing to investors seeking both domestic and international exposure. Managed by Allianz Global Investors, the trust benefits from institutional-grade research and portfolio management. However, its competitive positioning is challenged by larger, more liquid global equity trusts and ETFs that offer similar exposure at lower costs. Brunner’s active management approach may justify higher fees if it consistently outperforms, but passive alternatives pose a significant threat. Its lack of leverage (zero debt) is a strength in volatile markets but may limit returns in bullish conditions. The trust’s small size could deter institutional investors, though its long history and stable dividends enhance its appeal to retail investors.

Major Competitors

  • Scottish Mortgage Investment Trust PLC (SMT.L): Scottish Mortgage (SMT.L) is a larger (£11.5 billion market cap), more aggressive growth-focused trust with significant exposure to tech and unlisted equities. Its higher risk-reward profile contrasts with Brunner’s balanced approach. While SMT offers greater upside potential, its volatility is significantly higher, making Brunner a more conservative alternative.
  • F&C Investment Trust PLC (FCIT.L): F&C Investment Trust (FCIT.L) is one of the oldest and largest (£4.5 billion market cap) global equity trusts, offering broad diversification. Its scale provides liquidity advantages over Brunner, but its performance has been more benchmark-hugging. Brunner’s active growth focus may appeal to investors seeking higher alpha potential.
  • Witan Investment Trust PLC (Witan.L): Witan (Witan.L) is a multi-manager global equity trust (£1.7 billion market cap) with a value tilt, contrasting with Brunner’s growth focus. Witan’s diversified manager approach reduces single-manager risk but may lead to higher fees. Brunner’s concentrated strategy could outperform in growth-led markets.
  • Morgan Sindall Group PLC (MGNS.L): Incorrectly listed; not a direct competitor. Null for this entry.
  • Alliance Trust PLC (ATST.L): Alliance Trust (ATST.L) is a large (£3.2 billion market cap) global equity trust with a multi-manager approach. Its focus on income and capital growth overlaps with Brunner, but its scale and lower fees (0.6% OCF) make it a strong competitor. Brunner’s growth bias may differentiate it in certain market conditions.
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