Ahead of the company’s half-year results (published on 31 July, Law Debenture Corporation (LWDB) fund managers James Henderson and Laura Foll reflected on the impact of COVID-19 on the trust’s primarily UK portfolio, highlighting the benefits of having a significant proportion of the trust’s total income ‘in the bag’ as a result of revenues from LWDB’s independent professional services (IPS) business. While holdings in areas such as civil aerospace have detracted from returns as airline fleets worldwide have been grounded, the trust’s multi-cap approach – combined with the freedom to invest in non-yielding stocks – has allowed the managers to reap big rewards in areas such as hydrogen power, limiting losses in an unusually volatile six months.
LWDB’s investment objective is to achieve long-term capital growth in real terms, and steadily increasing income. The aim is to achieve a higher rate of total return than the broad UK stock market through investing in a diversified portfolio of mainly UK equities with some international holdings. The IPS business provides a regular flow of income, which augments the dividend income from the equity portfolio.