BlackRock Throgmorton Trust

One of the most reliable trusts in the UK, THRG has shown the ability to perform strongly in both rising and falling markets at low levels of volatility…

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Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by BlackRock Throgmorton Trust. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

BlackRock Throgmorton Trust

BlackRock Throgmorton Trust (THRG) is managed by Dan Whitestone, who runs a UK-focused portfolio of high-quality growth companies. THRG can also use contracts for difference (CFDs) to both gear up and short individual companies. This means the trust can vary its exposure to the market quickly and flexibly, giving it greater capacity to benefit from volatility in the markets and the potential to generate additional alpha.

The trust has an exceptional long-term track record of outperformance relative to the benchmark and peer group alike. Particularly noteworthy is the manager’s ability to outperform during both rising and falling markets, still at low levels of volatility.

The trust’s discount has narrowed significantly since the referendum in 2016, after which it reached a 22% discount at one point. This year has seen the discount continue to narrow, and seen the trust now start to trade at a premium of 1.16%. This has allowed the board to begin to issue shares to investors, providing significant liquidity for investors entering the trust at scale.

Kepler View

THRG has long been one of the most reliable vehicles for smaller companies in the UK in terms of performance. The trust has outperformed the benchmark in every one of the past nine years and offered the highest annualised returns of any trust in the sector. This has been achieved at relatively low levels of volatility and over three years the trust has the highest Sharpe ratio in the sector (1.97) and the third highest over five years (1.57).

This is an attractive trait for the trust to have in the current UK environment, which is full of uncertainty and volatility. The flexibility to alter its overall market exposure should also be an attractive feature, as it has helped Dan generate alpha in both falling and rising markets in the past.

Given the trust’s strong track record and defensive characteristics, in recent times we have seen the trust reach a premium and allow the board to issue shares. With 7,290,000 shares in treasury (which the trust has the authority to issue), there is significant liquidity for investors, which will be attractive for those who are looking to make sizeable purchases – something that had previously not been possible.

bull bear
Exceptional track record of outperforming peers and the benchmark Uncertainty continues to cloud the UK, which could impact small caps in particular
Can benefit from both falling or rising markets through the short and long book
Balanced fee structure featuring a low base management fee of 35 bps and a maximum cap on total management fees (including any performance fee) of 1.25% of average gross assets over two years
Trading at a premium, which will mean that the board will be able to easily issue shares to investors who are looking for the ability to buy in size


William Sobczak
William joined Kepler Partners in February 2018 as an investment trust analyst. Prior to joining, William graduated from the University of Western Australia, with a BSc in Psychology.

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