Temple Bar Investment Trust PLC on Thursday said the attractiveness of the UK equity market has resulted in a high level corporate activity such as takeovers, as it raised its dividend but was beaten by its benchmark in the interim.
The London-based trust which mainly invests in UK equities said net asset value with debt at fair value rose 3.3% to 385.9 pence each as at June 30, from 373.4p at December 31.
NAV total return with debt at fair value was 5.4% in the first half of 2026, underperforming against the company’s benchmark, the FTSE All-Share index which had a return of 7.2%.
It was below the firm’s return of 14.2% in the first half of 2025, when it had beaten the FTSE All-Share index’s return of 9.1%.
The best performers in Temple Bar’s portfolio were energy titans Shell PLC, BP PLC and TotalEnergies SE, which all saw a boost due to a sharp rise in energy costs, in particular oil and gas, since the start of the war between the US and Iran on February 28.
Meanwhile, advertising company WPP PLC and carmaker Stellantis NV, the latter which is behind brands such as Peugeot, Citroen, Fiat and Vauxhall, were the largest detractors.
Chair Charles Cade said: “The attractiveness of the UK equity market has resulted in a high level of corporate activity, including takeovers and share buybacks. In 2026 to-date, there have been bids for a diverse range of UK listed companies, including Beazley, EasyJet, Segro, Schroders and Tate & Lyle. Whilst acting as a catalyst to narrow the UK valuation gap versus global equity markets, these takeovers, combined with a dearth of initial public offerings, inevitably reduce the size of the investment universe for the company.
“At present, the portfolio manager continues to believe that the opportunity set is large enough under the company’s current investment restrictions, which permit up to 30% of assets to be invested in businesses listed overseas. However, the board continues to monitor this trend to ensure that the portfolio manager has sufficient opportunities to build a diversified portfolio of attractively valued investments.”
The company raised its dividend by 13% to 7.65p from 6.75p a year prior.
Looking ahead, Chair Cade said: “The geopolitical environment in the Middle East remains uncertain, leading to volatility in global energy prices and keeping interest rates higher for longer. In addition, there appears to be a likelihood of rising taxes in the UK following the recent change in prime minister. However, the portfolio manager believes that equity valuations already reflect a cautious outlook, outside of the artificial intelligence-driven investments. Reflecting this, the company’s portfolio is currently valued at around 11 times earnings, a meaningful discount to the wider UK market, and around half the valuation accorded to the wider global equity indices.”
Temple Bar shares were 0.7% lower at 419.50p each on Thursday afternoon in London.
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