Temple Bar Investment Trust

[ADrunkenMarcus]

Temple Bar's recent poorer performance made me look at its longer term track record.

Since purchase in December 2001, its share price rose from 614p to a recent peak of 1482p - a gain of 141.4% or 4.7% CAGR. The total dividends paid since purchase come to 635p a share which means the dividends paid per share are now in excess of book cost on a nominal basis. The dividend has grown at 3.8% CAGR, which is above inflation but not much of a real return: the dividend yield on cost is 7.6% on a nominal basis and 5.3% on a real basis.

If I simply add the capital gain and dividends per share, I get a total return of 245%. This is a conservative approach because the correct way to do it would be to treat my investment in units on an accumulation basis and log each dividend as a withdrawal, which would boost the total return, rather than pretend they are still there but as cash and not earning anything.

Nonetheless, even on these overly conservative figures TMPL has done better than the FTSE All Share Total Return index which has returned 230% over the period; and the FTSE 100 Total Return index which has returned 192%. A much better place to be would have been a FTSE 250 tracker, as the total return index returned 581%!

I'm not sure what conclusions to draw from this, other than note TMPL has, at least, beaten its benchmark - albeit by a small margin over a long period: 'investment objective is to provide growth in income and capital to achieve a long term total return greater than the benchmark FTSE All-Share Index, through investment primarily in UK Listed securities'.

Best wishes

Mark.

[BrummieDave]

I think what you've described is pretty much what an (equity income) Investment Trust does.

You pay a fee to gain access to a particular asset class and sub division of it (or not), and for it should behave consistent with its mandate. In this case that's to give you back a growing income, whilst also growing your capital, and it's done both. There will always be something else that's beaten it, you say the FTSE 250 in this case, but nevertheless it's done what you paid it to do.

Happy days...?

[doug2500]

Slightly tangential but I've been looking for an IT that holds mainly UK Mid cap, or 250 shares. I'll have a look at Temple bar in case it fits the bill since you've compared it to the 250 index.

Maybe I would be better with a 250 tracker, but at heart I like good IT's.

There are plenty of small cap IT's, and large, but the mid caps seem under represented in the IT world as far as my search has gone so far.

[BrummieDave]

Slightly tangential but I've been looking for an IT that holds mainly UK Mid cap, or 250 shares. I'll have a look at Temple bar in case it fits the bill since you've compared it to the 250 index.

Maybe I would be better with a 250 tracker, but at heart I like good IT's.

There are plenty of small cap IT's, and large, but the mid caps seem under represented in the IT world as far as my search has gone so far.

Mercantile includes small caps but is essentially a mid cap IT, up 40% in the past 12 months.

Worth a look perhaps if you haven't already.

[ADrunkenMarcus]

Slightly tangential but I've been looking for an IT that holds mainly UK Mid cap, or 250 shares. I'll have a look at Temple bar in case it fits the bill since you've compared it to the 250 index...
There are plenty of small cap IT's, and large, but the mid caps seem under represented in the IT world as far as my search has gone so far.

I should have been clearer that Temple Bar's benchmark is the FTSE All Share, so it includes plenty of more sluggish larger companies as well.

I do hold Standard Life UK Smaller Companies in my SIPP (since November 2011) and it's generated a greater total return than Temple Bar over a shorter period of time. For international smaller and mid caps, I hold Smithson, too, which is up some 34% since launch in October 2018 and makes up 41% of my SIPP.

Best wishes

Mark.

[ADrunkenMarcus]

There will always be something else that's beaten it, you say the FTSE 250 in this case, but nevertheless it's done what you paid it to do.

Yes, we can't complain on that score. What will be interesting is if, after twenty or more years, it's basically only matched its All Share benchmark with a slight additional gain. That would call it more into question. Any investment will suffer a poor few years at one time or another, I think, but it's if it becomes prolonged IMHO and cannot match its benchmark over two decades.

It does give low cost, conservative UK exposure. However, it's the total return net of costs which matters.

Best wishes

Mark.

[mc2fool]

What will be interesting is if, after twenty or more years, it's basically only matched its All Share benchmark with a slight additional gain.

I think your "cheat" method of figuring total return for TMPL has significantly underrated it.

I can't find an All Share chart back two decades, but the All Share is mostly made up of the 100 and TMPL has very handsomely beaten the 100 capital-only, and has had an on average give-or-take comparable yield over the period, so I suspect that if you try and find or figure out the TR properly you'll find the additional gain isn't as slight as you think....

[ADrunkenMarcus]

I think your "cheat" method of figuring total return for TMPL has significantly underrated it.

I can't find an All Share chart back two decades, but the All Share is mostly made up of the 100 and TMPL has very handsomely beaten the 100 capital-only, and has had an on average give-or-take comparable yield over the period, so I suspect that if you try and find or figure out the TR properly you'll find the additional gain isn't as slight as you think....

It occurred to me that I could get total return data from Sharepad. This shows a gain of 233% for TMPL to date, which is similar to my cheat method. TMPL's share price has fallen somewhat compared to the recent peak I used in my calculations. I guess Sharepad's method warrants investigation.

Best wishes

Mark.

[mc2fool]

P.S. The All Share was around 2,500 in December 2001. https://finance.yahoo.com/quote/%5EFTAS ... equency=1d

It's at 4,213 now, so a gain of approx. 66%, capital only. That's vs your figure of 230% for the FTSE All Share Total Return index for the same period.

If, as you say, the capital only gain for TMPL over the period was 141%, do you really think its proper, comparable, TR would only be slightly more than the All Share's?

I'll leave it as an exercise to the reader to work out the respective compound rates, and their differences ...

[ADrunkenMarcus]

It's at 4,213 now, so a gain of approx. 66%, capital only. That's vs your figure of 230% for the FTSE All Share Total Return index for the same period.

The total return data is based on the FTSE All Share TR index being 2386 (rounded) on the purchase date in December 2001 and rising to 7879 as of the last market day. The capital figure you've provided implies that there's a very hefty return coming from dividends.

If, as you say, the capital only gain for TMPL over the period was 141%, do you really think its proper, comparable, TR would only be slightly more than the All Share's?

I am not in a position to know, because I do not have the relevant dividend or yield data for the period.

I do note that TMPL does not have a particularly high dividend yield.

TMPL's dividend yield was under 2.8% in December 2001, based on a 17p dividend for 2001 and a share price of 614p. Today, it looks like the dividend for the most recent tax year will be about 3.5% on the closing share price on Friday. According to the Financial Times, the FTSE All Share dividend yield was 4.1%.

Best wishes

Mark.

[mc2fool]

It's at 4,213 now, so a gain of approx. 66%, capital only. That's vs your figure of 230% for the FTSE All Share Total Return index for the same period.

The total return data is based on the FTSE All Share TR index being 2386 (rounded) on the purchase date in December 2001 and rising to 7879 as of the last market day. The capital figure you've provided implies that there's a very hefty return coming from dividends.

If your TR figures are correct, then, yes, that would be the implication. I'd suggest double checking all figures (even Yahoo's have been proved to be wrong before.)

If, as you say, the capital only gain for TMPL over the period was 141%, do you really think its proper, comparable, TR would only be slightly more than the All Share's?

I am not in a position to know, because I do not have the relevant dividend or yield data for the period.

For dividends, sure you do, you said in your OP that "total dividends paid since purchase come to 635p a share", which you presumably totted up from your records.

But if you don't have them conveniently split out and dated, the AIC has TMPL's dividends back to 1973 https://www.theaic.co.uk/companydata/0P ... /dividends

[ADrunkenMarcus]

If your TR figures are correct, then, yes, that would be the implication. I'd suggest double checking all figures (even Yahoo's have been proved to be wrong before.)

The initial figure was from the Financial Times (no longer available) as is the current one.

If, as you say, the capital only gain for TMPL over the period was 141%, do you really think its proper, comparable, TR would only be slightly more than the All Share's?

I am not in a position to know, because I do not have the relevant dividend or yield data for the period.

For dividends, sure you do, you said in your OP that "total dividends paid since purchase come to 635p a share", which you presumably totted up from your records.

No - I have TMPL's dividends, but not FTSE All Share's.

Best wishes

Mark.

[mc2fool]

No - I have TMPL's dividends, but not FTSE All Share's.

But it's TMPL you don't have a "proper" TR figure for. That is what we're discussing, whether the "cheat" TR figure understates the proper TR, and by how much.

The adding in dividends ("cheat") method vs reinvesting them ("proper") method of calculating TR would give the same result if the share price didn't change, a better result if the share price continually declined, and a worse one if it continually increased.

In an up and down market it would, of course, depend on timing, but in a situation like TMPL's over the past couple of decades where the chart shows a fair bit of volatility but within a broad strongish up trend, more than doubling over the period, I'd expect the cheat method to significantly understate the proper method.

Buy, hey, I don't actually have any skin in this game ... I've never owned TMPL, nor for that matter an All Share or 100 tracker or ETF ... so I'll leave it to those that have the inclination to research in detail and crunch the numbers ............................

[ADrunkenMarcus]

No - I have TMPL's dividends, but not FTSE All Share's.

But it's TMPL you don't have a "proper" TR figure for. That is what we're discussing.

What you asked was:

'If, as you say, the capital only gain for TMPL over the period was 141%, do you really think its proper, comparable, TR would only be slightly more than the All Share's?'

Best wishes

Mark.

[77ss]

Slightly tangential but I've been looking for an IT that holds mainly UK Mid cap, or 250 shares. I'll have a look at Temple bar in case it fits the bill since you've compared it to the 250 index.

Maybe I would be better with a 250 tracker, but at heart I like good IT's.

There are plenty of small cap IT's, and large, but the mid caps seem under represented in the IT world as far as my search has gone so far.

I don't think TMPL fits the bill - it looks heavy in FT100 cos. to me.

I hold:

JPMorgan Mid Cap IT (JMF) which is 90% in FT250 cos. 5 yr TR 92%.

Henderson Smaller Companies (HSL) is, despite its name, some 62% in F250 cos. 5 yr TR 115%. I've been very happy with this one - and JMF hasn't been bad .

Aberforth Smaller Companies (which I don't hold) is similar to HSL - 61% in FT250 cos. There are doubtless others out there - just don't be deceived by the name - or by the benchmark!

[mc2fool]

No - I have TMPL's dividends, but not FTSE All Share's.

But it's TMPL you don't have a "proper" TR figure for. That is what we're discussing.

What you asked was:
'If, as you say, the capital only gain for TMPL over the period was 141%, do you really think its proper, comparable, TR would only be slightly more than the All Share's?'

Yes, exactly. TMPL's proper TR was what was, and has been in all my posts in this thread, the matter in question!

[ADrunkenMarcus]

Yes, exactly. TMPL's proper TR was what was, and has been in all my posts in this thread, the matter in question!

See above.

Best wishes

Mark.

[mc2fool]

Yes, exactly. TMPL's proper TR was what was, and has been in all my posts in this thread, the matter in question!

See above.

I could well say the same to you.

I believe I've been pretty clear in saying that I think you need to determine TMPL's proper TR to compare with the All Share's TR -- which you have already got, so there's no need to find yield or dividend data for to calculate it -- and I don't see how you've misread what I've written to read it as anything else, but clearly you have so obviously it wasn't as clear as I thought, and I think the best thing now is to just leave it at that....

[ADrunkenMarcus]

I believe I've been pretty clear in saying that I think you need to determine TMPL's proper TR

That's why the TR data for TMPL was provided, above, from another source.

Best wishes

Mark.

[ADrunkenMarcus]

Aberforth Smaller Companies (which I don't hold) is similar to HSL - 61% in FT250 cos. There are doubtless others out there - just don't be deceived by the name - or by the benchmark!

Acorn Income Fund is a bit whacky if you like that sort of thing.

Best wishes

Mark.