Touche trust benefits from UK equities

BANKERS Investment Trust, a broadly based investment trust in the Touche Remnant stable, benefited from increasing exposure to UK equities and zero investment in Japan before the market collapse last summer.

Its net asset value in the year to the end of October climbed by 7.8 per cent compared with a rise of 1.5 per cent in the FT Actuaries All-Share Index. The total dividend rose 7.5 per cent to 3.44p.

Geographical exposure to the UK rose to 51.1 per cent from 50.7 per cent with a net pounds 5m being invested. Fund manager Michael Moule said he was particularly keen on FT-SE 250 stocks - those below the top 100 companies - and on smaller companies.

After the collapse of the Japanese market, Mr Moule decided there was little downside risk left and made an investment of pounds 2.5m. Hong Kong produced bumper gains of pounds 4.1m and the value of investment stood at pounds 8.6m at the year-end against pounds 8.4m a year earlier. That figure has fallen to pounds 7m since Christopher Patten's push for democracy began.

Exposure to the US was reduced to 23.9 per cent from 24.4 per cent with a net pounds 5m disinvested. Although Mr Moule describes the US as still attractive, he believes the stock market is in a final bull phase and will need genuine corporate earnings growth to keep rising.