Mercantile in the News in This Mail on Sunday 'Fund Focus'

s Wealth The Mail on Sunday MARCH 14 • 2021 £2bn trust pins hopes on UK’s purple patch e

Magnesita – another supplier to cent and 20 per cent the steel industry – and copper respectively. FUND FOCUS miner Central Asia Metals. Next month, the trust’s board ‘We’re investing in companies will announce the last quarterly By Jeff Prestridge that should benefit from an dividend payment for the improving economic financial year ending January MERCANTILE INVESTMENT TRUST Where the trust is invested by sector (%) landscape,’ says Anderson. He 30. It has already intimated the Banking on a strong recovery in the UK Cash 1 Industrials 25 FUND manager Guy Anderson says exposure to the troubled payment is likely to be 2.55 100 Total returns (%) Basic materials 6 is excited about the prospects UK steel industry is negligible pence a share. If so, it will mean for the UK economy and the for both RHI Magnesita and a total dividend payment for the Vesuvius. year of 6.6 pence – the same as 80 stock market – more so than at Mercantile Investment Trust Technology 10 any time in the past three Although Anderson is in a in the previous year. Some of FTSE All-Share Index years. positive mood, he admits the the dividends paid to 60 Anderson, joint manager of past 12 months have been shareholders in the last year the £2 billion Mercantile challenging. Last March, every have come from the trust’s 40 Investment Trust, believes holding was reassessed as the healthy income reserves built . Financials 17 most consumers are in a pandemic took grip. It resulted up over many years for times 20 healthy financial position as in stocks being sold, including such as now when UK dividends restrictions begin to be lifted – oil and gas companies Premier have been under extreme 0 and this will help drive a strong Oil and Hunting – and pressure. recruitment business Hayes. One big attraction of the trust Consumer UK recovery. He says: ‘There -20 is an opportunity for the UK to New stakes were taken in video is its competitive annual charge March 2016 March 2021 Consumer goods 19 services 22 experience a purple patch of games specialist Team17 and of 0.44 per cent. One of a economic growth as consumers food supplier Premier Foods, number of investment trusts start spending again against a owner of iconic brands such as managed by JP Morgan Asset backdrop of resilient house Mr Kipling, Oxo and Bisto. Management, its stock market prices.’ Both these companies have identification code is BF4JDH5. With the UK stock market benefited from people spending jeff.prestridge@mailonsunday. looking cheap compared to more time at home, playing co.uk other global equity markets – more video games and eating in especially the United States – rather than out. Says Anderson: TOP 10 HOLDINGS (% of fund) Anderson says the UK could be ‘We could see a tremendous ‘the most exciting market in the growth runway ahead for Intermediate Capital 3.1 year ahead’ although he warns Team17. Premier Foods is an Softcat 3.1 that any advance in share established business and has Bellway 3.1 prices will be marked by had challenges, but it has paid ‘volatility’. ‘It won’t be a down debt and is looking to sell Games Workshop 2.8 straight line increase,’ he adds. more of its produce outside of Computacenter 2.8 Not surprisingly, Mercantile the UK.’ Over the past five Countryside 2.6 is set up to benefit from both years, the trust has generated a the anticipated recovery in the total return for investors of 86 Electrocomponents 2.5 UK economy and equity prices. per cent – way in excess of the National Express 2.5 The trust has used some £250 FTSE All- Share Index (37 per t Watches of Switzerland 2.0 million of borrowings to cent). Over the past year, the increase its exposure to UK equivalent returns are 25 per Weir 2.0 equities, the latest slice of which (£80 million) has been MERCANTILE INVESTMENT TRUST Where the trust is invested by sector (%) deployed in the last couple of Banking on a strong recovery in the UK Cash 1 Industrials 25 months as the vaccination Total returns (%) programme has paved the way 100 Basic materials 6 for the economy’s re-opening. In total, the trust now has 82 80 holdings, compared to 75 at the Mercantile Investment Trust Technology 10 FTSE All-Share Index end of last year. 60 Existing positions in economically sensitive stocks 40 such as airline Jet2 and steel Financials 17 foundry supplier Vesuvius 20 (previously known as Cookson) have been tickled up as the 0 economic picture has Consumer brightened. Also, new stakes -20 Consumer goods 19 services 22 have been taken in RHI March 2016 March 2021

TOP 10 HOLDINGS (% of fund) Intermediate Capital 3.1 Softcat 3.1 Bellway 3.1 Games Workshop 2.8 Computacenter 2.8 Countryside 2.6 Electrocomponents 2.5 National Express 2.5 Watches of Switzerland 2.0 Weir 2.0