Specialist value-seeking trust Temple Bar (TMPL) posted another year of outstanding performance in 2025. After a near 20% NAV total return in 2024, the managers produced a 33.9% return last year.
Superior stock selection
By comparison, the FTSE All-Share index delivered a 9.5% total return in 2024 and a 24% return last year. In terms of share price total return, the trust managed a 19.1% gain in 2024 and an extraordinary 45.3% gain last year.
‘Returns were primarily driven by stock selection rather than broader market movements,’ observed trust chairman Charles Cade. The performance reflected the managers’ focus on ‘company fundamentals, valuation discipline and active engagement with investee companies’, added Cade.
The combination of strong performance, a rising dividend and increased marketing has led to significant demand for the stock from retail investors. This has pushed them to a premium to NAV, allowing the trust to sell five million shares from treasury last year.
Since the start of the year, the trust has reissued more shares so its market cap is now £1.1 billion. That compares with a valuation of £745 million at the start of January 2025.
Managers Ian Lance and Nick Purves singled out Aviva (AV.), Barclays (BARC), Johnson Matthey (JMAT), NN Group, NatWest (NWG) and Standard Chartered (STAN). Each rose more than 50% during the year, adding at least 2% to the trust’s absolute return.
Another eight stocks, including Aberdeen (ABDN) and GSK (GSK), each added at least 1% to returns. Only one stock, WPP (WPP), detracted more than 1% after it halved over the course of the year.
Temple Bar owes its outstanding performance in 2025 to the managers’ discipline in buying stocks below intrinsic value. Although valuations have risen from their post-Covid lows, the team believe they are still low by historic standards.
That means there is still a large opportunity set among UK equities for the trust to keep finding new ideas. At 11 times earnings, the portfolio is still at a discount to the FTSE All-Share and many global indices.
Read the press release here: https://www.templebarinvestments.co.uk/
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