The 7.1% share price discount to net asset value on investment trust Brunner (BUT) provides an opportunity to buy a balanced global portfolio for less than the value of the underlying assets.

The trust has delivered consistent returns across the market cycle and has particular appeal during the current period of uncertainty. A quarterly dividend payer, Brunner is one of the Association of Investment Companies’ ‘Dividend Heroes’, having grown the shareholder reward for 51 successive years.

Brunner’s long-term performance has been strong versus the global sector and the year to November 2022 marked the trust’s fourth consecutive year of outperformance of the benchmark across a range of market conditions.

Managed by Allianz Global Investors’ Christian Schneider and Julian Bishop with support from Marcus Morris-Eyton, Brunner seeks to provide a progressive dividend alongside capital growth over time. It has a 0.63% ongoing charge.

The trust is diversified across 61 holdings with a focus on attractively valued, quality companies blessed with high market shares, pricing power, strong balance sheets and a sustainable competitive advantage. This approach should offer investors comfort in today’s unpredictable environment of higher inflation and interest rates, geopolitical tensions and banking crises.

As Morris-Eyton explained on a recent investor call, Brunner is ‘proving to be an all-weather fund that has been able to cope in most of those market environments.’

Brunner seeks companies set to benefit from structural growth trends and its top 10 holdings include Visa (V:NYSE) and Taiwan Semiconductor Manufacturing (TSM:NASDAQ).

Themes in the portfolio include digitalisation, through names such as software groups Microsoft (MSFT:NASDAQ) and Adobe (ADBE:NASDAQ), and electrification via names such as energy giant Shell (SHEL) and Schneider Electric (EPA:SU).

The trust also offers a play on rising health and wellbeing spend through US healthcare firm UnitedHealth (UNH:NYSE), Danish pharmaceutical company Novo Nordisk (NVO:NYSE) and consumer health products provider Haleon (HLN), as well as the rise of the emerging market middle class through the likes of luxury goods group LVMH (LVMH:BIT) and restaurants operator Yum China (YUMC:NYSE).

One key issue to consider is that Brunner has seen several lead manager changes in recent years. Lucy Macdonald stepped down in 2020 when she quit Allianz. Her replacement, Matthew Tillett, only lasted two years in the top job before moving to rival asset manager Premier Miton.

Investors should take comfort that new co-lead manager Schneider has been with Allianz since 2000 as part of the global equities team. Fellow co-lead manager Bishop joined Allianz last year but used to help manage Tesco’s pension scheme and has more than 25 years’ fund management experience.

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