par New Star Investment Trust PLC (isin : GB0002631041)
Half-year Financial Report
New Star Investment Trust PLC (NSI) NEW STAR INVESTMENT TRUST PLC
This announcement constitutes regulated information.
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31st DECEMBER 2025
The Company’s objective is to achieve total return through capital growth and income.
FINANCIAL HIGHLIGHTS
INTERIM REPORT
CHAIRMAN’S STATEMENT
PERFORMANCE Your Company generated a total return of 9.13% over the six months to 31st December 2025, taking the net asset value (NAV) per ordinary share to 184.29p. By comparison, the Investment Association’s Mixed Investment 40-85% Shares Index gained 8.79%. The MSCI AC World Total Return Index gained 13.46% in sterling while the MSCI UK Total Return Index rose 13.79%. Over the period, UK government bonds returned 2.45%. Further information is provided in the investment manager’s report.
Your Company made a revenue profit for the six months of £1,638,000 (2024: £1,801,000).
GEARING AND DIVIDENDS Your Company has no borrowings. It ended the period under review with cash representing 11.50% of its NAV and is likely to maintain a significant cash position. In respect of the six months to 31st December 2025, your Directors have declared an interim dividend of 1.70p per share (2024: 1.70p).
DISCOUNT Your Company’s shares continued to trade at a significant discount to their NAV during the period under review. The Board keeps this issue under review.
OUTLOOK Equities fell and some safe haven assets rose as US-led air strikes against Iran triggering a war in the Middle East. Over the longer term, however, equity market prospects appear positive although highly valued US stocks appear less attractive than equities in Europe and emerging markets. Middle East conflict and US tariff and immigration policies may result in inflation remaining higher for longer, affecting some lower-risk assets. Selected areas of the bond markets, cash deposits and lower risk multi-asset funds offer income and diversification should equities retreat.
NET ASSET VALUE Your Company’s unaudited NAV at 28th February 2026 was 195.52p.
Geoffrey Howard-Spink Chairman 19th March 2026
INVESTMENT MANAGER’S REPORT MARKET REVIEW The Federal Reserve cut its policy interest rate from a range of 4.25-4.5% to 3.5-3.75% over the six months to 31 December 2025 despite US inflation rising from 2.70% to 3.00%,before falling back. The Fed eased policy in response to weaker jobs data but the pace of cuts was slower than in previous rate cutting cycles because of the inflation uptick and expectations that President Trump’s tariffs and immigration restrictions would increase inflationary pressures. The President’s call for interest rate cuts provoked fears that political pressure would compromise Fed independence.
Donald Trump’s April 2025 tariff rises caused nervousness but subsequent talks led to less punitive rates for most trading partners. Tariffs constrain trade but may ensure greater US economic security as companies shift to making components locally. In February 2026, the Supreme Court ruled Trump’s tariff measures illegal but Trump said he would impose tariffs by another route.
UK consumer price inflation rose from 3.6% to 3.8% before falling to 3.0% in January 2026. The Bank of England cut its Bank Rate from 4.25% to 3.75% because of faltering economic growth and rising unemployment. The European Central Bank held its policy rate as eurozone inflation remained at or marginally above its 2% target.
Bonds rose in response to monetary easing. Within the bond markets, corporate bonds appeared fully valued relative to government bonds, with credit spreads close to historically low levels, offering investors little compensation for taking credit risk. Andrew Bailey, the Bank of England governor, raised concerns about opaque private credit markets as two companies backed by US private credit filed for bankruptcy.
The dollar rose 1.88% against the pound but prior weakness supported developing economy markets overall. Chinese economic growth slowed from 5.2% in the second quarter of 2025 to 4.5% in the fourth quarter, partly due to punitive US tariffs. Near zero inflation and weakness in China’s over-indebted property market contributed to rising household deposits and low consumer confidence. Previous cuts to the reserve ratio requirements that govern bank lending failed to buoy the economy and more stimulus is expected.
Shortly after the period end, US forces seized Venezuela’s president, Nicolas Maduro, and President Trump said America would take control of the country’s oil reserves, the world’s largest, and invest in infrastructure to increase production, potentially reducing the oil price. In the longer term, lower oil prices could boost global growth and lower inflation, but it may take years for production to ramp up after decades of under-investment.
PORTFOLIO REVIEW Your Company’s net asset value rose 9.13% over the six months to 31 December 2025. By comparison, the Investment Association (IA) Mixed Investment 40-85% Shares sector, a peer group of multi-asset funds with allocations to equities in the 40-85% range, rose 8.79%. The MSCI AC World Index returned 13.46% in sterling while global bonds returned 2.73% and UK government bonds returned 2.45%.
US equities marginally underperformed, rising 13.08% in sterling, but technology stocks outperformed, up 20.05% in response to investor enthusiasm for artificial intelligence (AI). Polar Capital Global Technology, your Company’s largest investment, accounting for 6.82% of its net assets at the start of the period, did even better, rising 36.66%. Polar Capital Global Technology has focused on the enablers and beneficiaries of AI such as semiconductor manufacturers rather than the so-called “magnificent seven” major US technology companies. US software stocks account for less than 10% of the Polar Capital portfolio because AI may commoditise software code and produce alternative ways of managing and accessing data.
Equities in emerging markets and Asia excluding Japan also outperformed, rising 18.44% and 18.07% respectively in sterling. Some developing economies have higher economic growth rates, lower levels of public sector indebtedness and more favourable demographics than developed countries. Their equity markets were trading on lower valuations and offering higher dividend yields than many developed markets over the period yet some of the world’s largest technology hardware companies are located in the developing world such as Taiwan Semiconductor Manufacturing Company (TSMC), the global market leader. In South Korea, SK Hynix and Samsung Electronics are the world’s leading manufacturers of memory. These businesses benefit from vast capital investment in datacentres and produce high-end products required for AI.
Your Company’s bias towards Asia ex-Japan and emerging market funds with income mandates contributed to its ability to pay a reasonable dividend. Within the portfolio, two investment trusts, Schroder Oriental Income and JP Morgan Global Emerging Markets Income, rose 21.40% and 20.01% respectively. Investment trusts may typically invest up to 15% of their assets in a single stock whereas many open-ended funds are restricted to 10%. At the period end, Schroder Oriental Income had 13.6% of its assets in TSMC, which accounts for more than 10% of some Asian and emerging market equity indices. Investment trusts may also increase their portfolio size through borrowing, and the two trusts had borrowings of about 4% of net assets at 31 December, showing their confidence in market prospects. JP Morgan Emerging Markets Income, Schroder Asian Income Maximiser and Prusik Asian Equity Income underperformed, however, rising 15.97%, 15.47% and 14.97% respectively.
Indian equities were conspicuously weak, falling 0.28% in sterling as investors sought more lowly-valued opportunities elsewhere, and Stewart Investors Indian Subcontinent, one of the portfolio’s largest investments at the start of the period, did even worse, falling 8.88%. Cusana Emerging Markets Equity also suffered from its holdings in smaller Indian stocks, rising only 7.24%.
Vietnam Enterprise Investments rose 30.83% but lagged the local market, which gained 47.93% in sterling. Your Company participated in a tender offer through which the investment trust bought back 10% of its shares at a narrow discount to net asset value.
Two more tender offers will be made during 2026, each for up to 10% of the shares. The investment case for Vietnam remains strong because its economy is growing rapidly while the government’s fiscal policies have resulted in relatively low inflation and low foreign indebtedness.
UK equities marginally outperformed, rising 13.79% as investors returned to a market trading on a lower valuation and with a higher dividend yield than many overseas markets. The London stock market has heavy weightings in such sectors as financials, industrials, healthcare and consumer staples, which include many globally diversified companies with little sensitivity to the domestic economy. Smaller companies gained only 5.27%, however, in response to lacklustre domestic conditions. Should equity markets weaken elsewhere, the London market’s relatively high dividend yield and the diversification provided by its sector weightings may prove defensive.
Within the portfolio, Man GLG Income gained 14.05% but two small-company investments, Aberforth Geared Value & Income and Chelverton UK Equity Income, fell 1.84% and 0.81% respectively. Equities in Europe excluding the UK rose 11.32% in sterling. Your Company added Lightman European, which has a value focus, to its Europe ex-UK holdings.
Your Company’s global investments produced mixed results. All the EF Brompton Global funds outperformed their respective benchmarks, delivering top quartile performance versus peers. Baillie Gifford Global Income Growth lagged, however, returning just 1.75% as a result of its focus on quality growth stocks, which were relatively weak. The holding was reduced in early 2026 to fund purchases elsewhere. Aquilus Inflection also lagged, falling 9.58% as a result of its bias towards growth stocks, particularly data and software companies that came under pressure amid concerns about AI-driven disruption, and its underweight position in cyclical sectors such as banks.
US monetary easing fuelled gains for global bonds. Within the portfolio, Franklin Templeton Emerging Markets Bond benefitted from interest in developing economy assets, rising 12.19%. Schroder Strategic Credit and the sterling-hedged holding in the iShares Treasury Bond 7-10 years exchange-traded fund also did relatively well, returning 3.88% and 3.26% respectively. The lower risk EF Brompton Global Conservative Fund, up 5.77% over the period, and deposits in dollars, which strengthened 1.88% against the pound, and sterling provided diversification.
OUTLOOK In March 2026, US-led air strikes against Iran led to war in the Middle East. Markets responded to heightened risk in typical fashion as equities fell and some safe-haven assets rose. There are grounds, however, to remain positive on the prospects for equities overall despite the uncertainty although equities on lower valuations in Europe and emerging markets look more attractive than highly valued US stocks. Inflation may prove stubborn because of President Trump’s tariff and immigration policies and a higher oil price in the wake of the US-Iran war. This may mean the pace of Federal Reserve monetary easing will be slower than expected. Your Company’s investments in bond funds, dollar and sterling cash and low risk multi-asset funds provide diversification and may prove defensive at times of equity market falls.
Brompton Asset Management Limited
DIRECTORS’ REPORT
PERFORMANCE In the six months to 31st December 2025 the total return per Ordinary share was 9.13% (2024: 0.41% before the 2024 return of capital). The NAV per Ordinary share increased to 184.29p, whilst the share price increased to 124.00p. The increase in the NAV per Ordinary share was due primarily to overweight positions in the United Kingdom, Europe and Emerging Markets and being underweight in US software (see the Investment Manager’s report). The total return compares to an increase of 8.79% in the IA Mixed Investment 40-85% Shares Index.
The Company made a revenue profit for the six months of £1,638,000 (2024: £1,801,000). Costs rose slightly as a result of some non-recurring legal costs, but income decreased by £116,000 following the £17 million reduction in assets arising from the previous year’s B Share redemption. Interest income fell by £37,000 as both interest rates and the level of deposits fell.
The management fee charged directly by Brompton is allocated to the capital account.
DIVIDEND The Directors have declared an interim dividend of 1.70p per Ordinary share in respect of the six months ended 31st December 2025 (2024: 1.70p). The dividend will be paid on 29th April 2026 to shareholders on the register at the close of business on 7th April 2026 (ex-dividend 2nd April 2026).
INVESTMENT OBJECTIVE The Company’s investment objective is to achieve total return through capital growth and income.
INVESTMENT POLICY The Company’s investment policy is to allocate assets to global investment opportunities through investment in equity, bond, commodity, real estate, currency and other markets.
The Company’s assets may have significant weightings to any one asset class or market, including cash.
The Company will invest in pooled investment vehicles, exchange traded funds, futures, options, limited partnerships and direct investments in relevant markets. The Company may invest up to 15% of its net assets in direct investments in relevant markets.
The Company will not follow any index with reference to asset classes, countries, sectors or stocks. Aggregate asset class exposure to any one of the United States, the United Kingdom, Europe ex UK, Asia ex Japan, Japan or Emerging Markets and to any individual industry sector will be limited to 50% of the Company’s net assets, such values being assessed at the time of investment and for funds by reference to their published investment policy or, where appropriate, their underlying investment exposure.
The Company may invest up to 20% of its net assets in unlisted securities (excluding unquoted pooled investment vehicles), such values being assessed at the time of investment.
The Company will not invest more than 15% of its net assets in any single investment, such values being assessed at the time of investment. Derivative instruments and forward foreign exchange contracts may be used for the purposes of efficient portfolio management and currency hedging. Derivatives may also be used outside of efficient portfolio management to meet the Company’s investment objective. The Company may take outright short positions in relation to up to 30% of its net assets, with a limit on short sales of individual stocks of up to 5% of its net assets, such values being assessed at the time of investment.
The Company may borrow up to 30% of net assets for short-term funding or long-term investment purposes.
No more than 10%, in aggregate, of the value of the Company’s total assets may be invested in other closed-ended investment funds except where such funds have themselves published investment policies to invest no more than 15% of their total assets in other listed closed-ended investment funds.
SHARE CAPITAL The Company’s share capital comprises 305,000,000 Ordinary shares of 1p each, of which 71,023,695 (2024: 71,023,695) have been issued and fully paid. No Ordinary shares are held in treasury, and none were bought back or issued during the six months ending 31st December 2025.
PRINCIPAL RISKS AND UNCERTAINTIES The principal risks identified by the Board, and the steps the Board takes to mitigate them, are discussed below. The Audit and Risk Committee reviews existing and emerging risks on a six-monthly basis. The Board has closely monitored the societal, economic and market focused implications of recent events.
Investment strategy: Inappropriate long-term strategy, asset allocation and fund selection could lead to underperformance. The Board discusses investment performance at each of its meetings and the Directors receive reports detailing asset allocation, investment selection and performan |