HEAVY exposure to domestically focused UK companies and housebuilders in particular have had a detrimental effect on the Independent Investment Trust, which is currently bottom of the Association of Investment Companies’ global sector thanks to its 2016 performance.

The trust, which as its name suggests is independent from any fund house but is run by former Baillie Gifford manager Max Ward, made a net asset value total return of five per cent in the year to the end of November while its benchmark indices, the FTSE All Share and FTSE World, made respective total returns of 9.8 per cent and 25.6 per cent.

Mr Ward said that stockmarket panic following the Brexit vote led to around 40 per cent being wiped off the prices of most of the trust’s housebuilding holdings, which collectively account for just under a quarter of the portfolio.

“The scale of our existing position in the industry made us slow to capitalise on the eye-catching values thrown up by the panic, but we did eventually add £3.4 million to our Redrow holding,” he said.

“This had a mitigating influence on a most disappointing overall performance [but] despite the addition, the value of our stake declined from £56.5m at 30 November 2015 to £51m at 30 November 2016.”

Despite the poor performance, trust chairman Douglas McDougall said the trust had returned 476 per cent since launch in 2000.

He added that the total dividend for the 2015/16 year would fall by just 0.5p, from 8p to 7.5p. That is made up of an interim payment of 5p and a special payment of 2.5p.