Chris Prunty, Investment Analyst at Ausbil Investment Management shares some insights into why he has been adding Equity Trustees to his portfolio

Chris Prunty, Investment Analyst at Ausbil Investment Management shares some insights into why he has been adding Equity Trustees to his portfolio. We bought Equity Trustees both in the capital raise they did to fund the acquisition of the ANZ trustee business and in the aftermarket. EQT has a high degree of earnings certainty and quality earnings given that a proportion of their Funds Under Management is permanent and highly sticky in nature (e.g. they administer charitable trusts). We think the market underestimates the quality of EQT's earnings but are happy to wait for a re-rating as the capital light nature of the business sustains a high payout ratio and forward yield of over 5%.