UK Edition
£1bn investor: 'We've held this stock since Queen Victoria was on the throne'
In the same year that the Bankers Investment Trust first invested in HSBC, the Eiffel Tower opened, Charlie Chaplin was born and Queen Victoria was on the throne.
The £1.2bn trust has been a holder of HSBC since 1889, which probably makes it the longest-held stock in the history of collective investment.
Although owning a stock for as long as 129 years is not common, many fund managers stand by their favourite firms for decades. Here are four examples of taking long-term investing to the extreme.
The Bankers Investment Trust: HSBC, 129 years
Since 1995, the earliest date from which the figures are available, the total return from HSBC shares, including reinvested dividends, has been 547pc, despite the global financial crisis.
Alex Crooke, the trust’s manager, said: “In the first set of accounts from 1889, the portfolio was dominated by water companies, railroads, breweries and government bonds.
“Some names stand out. The Liebig’s Extract of Meat Company was the owner of Fray Bentos pies and Oxo cubes – and the enigmatic Gibraltar Railway Company must have operated a limited network.”
He added that the portfolio included multiple names held for more than 30 years. “Longer holding periods mean lower transaction costs and the ability to benefit from a company’s strategy over multiple economic cycles,” he said.
Foreign & Colonial Investment Trust: Shell, 93 years
This £3.7bn global investment trust recently celebrated its 150th anniversary, and for the past 93 years it has held Royal Dutch Shell shares.
The trust’s manager, Paul Niven, still believes Shell is an opportunity, last adding to his holding in late 2017.
He said: “It has some very good-quality oil assets. In the past its spending has been poor when the oil price has been high, and the recent low price has forced an improvement.
“But the share price implies that this hasn’t happened, despite the fact it can now afford to pay its dividend with oil at $50 (£37) a barrel. We therefore believe the quality of the business is fundamentally mispriced and represents an opportunity.”
Dividends have accounted for a huge proportion of Shell’s returns. Since 1995 it has delivered capital growth of 202pc, or 709pc with dividends reinvested. “The dividend is of paramount importance and that is recognised by the company,” Mr Niven said.
Legg Mason ClearBridge US Aggressive Growth: Allergan, 35 years
This fund is the British version, launched in 2007, of the American ClearBridge Aggressive Growth fund, which opened for business in 1983.
In that year the manager, Richie Freeman, bought several stocks that remain in the fund today. New York-listed pharmaceutical giant Allergan, originally known as Forest Laboratories, is one such holding.
It has delivered a share price return of more than 2,400pc from February 1993 to today, although its value has halved since its 2015 peak.
EdenTree Amity UK: Halma, 29 years
EdenTree Amity UK has been run by Sue Round since 1988. She has held the FTSE 250 engineering firm Halma for nearly three decades.
The company, which began life in Sri Lanka in 1894 as a tea producer, floated in 1972. Today its products include systems to detect dangerous gases, security sensors and more.
Ms Round said: “Despite the shares hitting an all-time high recently, we believe the long-term growth prospects are attractive.”
The company has delivered an annualised return of 16pc over the past 20 years and has increased its dividend by 5pc for 38 straight years. Its total return since 1995 is 1,547pc, including reinvested dividends – the capital growth alone is 830pc.