Herald Investment Trust Sees 28.1% NAV Increase with Strategic Shift to Overseas Equities and Cash Holdings

Herald Investment Trust’s Strong Long-Term Growth Since 1994 Launch

Since its launch on 16 February 1994 at a subscription price of 100 pence per share (before costs), Herald Investment Trust plc has delivered remarkable long-term returns. The NAV per share, measured on a capital gains basis excluding accrued income, rose to 3459.7 pence by 30 June 2026, representing cumulative growth of 3405.2% over 32 years. This extensive track record spans multiple market cycles and economic environments, underscoring the effectiveness of the investment strategy implemented by Herald Investment Management Limited, the FCA-authorised investment manager.

The trust’s share price has similarly appreciated from an adjusted capital gains tax base subscription price of 90.9 pence to 3070.0 pence at the reporting date, delivering total shareholder returns of 3277.3% since inception. The 28.1% year-to-date NAV growth highlights ongoing portfolio momentum, although the figures are unaudited and past performance does not guarantee future results. The trust’s ability to compound returns over three decades reflects disciplined management and capital allocation by Herald Investment Management Limited.

Diversified Portfolio of 248 Equities with Increased Overseas Exposure

As of 30 June 2026, Herald Investment Trust held a diversified portfolio of 248 equities across domestic and international markets. The portfolio’s geographic allocation shifted significantly towards overseas equities, which now represent 43.6% of NAV, compared to 11.7% in UK equities. This strategy aims to capture growth in international markets while maintaining UK market exposure. The remaining 44.7% of NAV is allocated to cash and government bonds, indicating a cautious stance with a substantial defensive component.

The trust’s broad equity holdings reduce concentration risk, while the large cash and bond allocation reflects capital preservation and liquidity management. The absence of gearing means the portfolio is fully equity-financed, mitigating leverage risks amid market volatility. The 43.6% overseas equity weighting also provides exposure to currency fluctuations and global market dynamics, enhancing diversification beyond sterling assets.

Year-to-Date NAV Outperformance and Share Price Trends

Herald Investment Trust’s NAV per share increased 28.1% year-to-date on a capital gains basis (excluding accrued income), outperforming the Deutsche Numis SC plus AIM (ex. Investment Co's) Index, which declined 0.1% over the same period. The share price rose 27.7% year-to-date to 3070.0 pence, slightly trailing NAV performance by around 40 basis points due to an 11.3% discount to NAV as of 30 June 2026. This discount reflects typical closed-end fund market dynamics influenced by investor sentiment and liquidity.

In comparison, the Russell 2000 Technology Index (sterling terms) gained 51.6% year-to-date, outperforming Herald’s NAV growth. However, since its March 1996 inception, the Russell 2000 Technology Index has returned 1195.4%, while Herald’s NAV has grown 3405.2% since February 1994, demonstrating the trust’s superior long-term performance. The more balanced portfolio allocation, including significant cash, bonds, and UK equities, contributed to more conservative returns during a period of strong US technology sector gains. Public information did not clarify any immediate share price reaction to this report.

Defensive Stance with 44.7% Cash and Government Bonds

The 44.7% allocation to cash and government bonds represents a notably defensive positioning for Herald Investment Trust, suggesting caution amid equity valuations or macroeconomic uncertainty. This sizeable allocation offers downside protection during market stress and preserves liquidity for future equity investments when valuations become more attractive. The defensive weighting also lowers portfolio volatility compared to a fully invested equity strategy, appealing to risk-conscious investors. The trust’s unlevered structure confirms this is a strategic choice rather than a result of deleveraging or liquidity constraints.

The portfolio’s balance between 55.3% equities and 44.7% defensive assets prioritizes capital preservation alongside growth. Maintaining a large cash and bond position amid global equity recoveries indicates a patient, selective capital deployment approach. The lack of gearing eliminates leverage risk and covenant pressures, which is prudent given the economic and geopolitical uncertainties leading up to 30 June 2026.

NAV Calculation and Share Capital Details as of 30 June 2026

Herald Investment Trust’s NAV at 30 June 2026, including current year income, was approximately a31,655.6 million, with 47,858,467 shares outstanding, resulting in a NAV per share of 3459.7 pence on a capital gains basis excluding accrued income. The NAV excluding current year income was a31,655.7 million, illustrating the impact of accumulated income. Total return NAV, including income distributions, shows 3677.3% cumulative growth since inception, enabling investors to assess capital and income contributions to returns.

The trust’s market capitalization, based on the 3070.0 pence share price, was about a31,470 million, reflecting an 11.3% discount to NAV or a a3185.6 million valuation gap. This discount level is typical for closed-end funds and reflects market supply-demand factors. The performance data are unaudited, and NAV figures are net of expenses including management and administrative costs.

Management by FCA-Regulated Herald Investment Management Limited

Herald Investment Management Limited, authorised and regulated by the Financial Conduct Authority (FCA), manages Herald Investment Trust plc. This regulatory oversight provides investor protections such as capital adequacy standards, conduct rules, and complaint procedures. The investment manager is responsible for portfolio construction, stock selection, asset allocation, and managing the significant cash and bond holdings representing 44.7% of NAV. Discretionary decisions for the 248 equity holdings and overall portfolio positioning are executed within the trust’s governance framework.

Approval of this statistics and performance report by Herald Investment Management Limited confirms compliance with regulations and trust documentation. The FCA regulation ensures robust operational controls and risk management. The trust’s independent board oversees the investment manager’s activities, sets policy, and safeguards shareholder interests, maintaining a clear separation between management and governance.

Geographic Diversification with Emphasis on Overseas Equities

The portfolio’s geographic split features 11.7% UK equities and 43.6% overseas equities, reflecting a strategic emphasis on international markets and exposure to non-sterling currencies. The modest UK allocation suggests a focus on opportunities abroad or enhanced diversification benefits. Overseas equities span European, North American, Asian, and emerging markets, capturing diverse growth and dividend prospects. Currency fluctuations impact sterling-based returns for UK investors.

The combined equity allocation of 55.3% (UK plus overseas) balances domestic and international exposure, with overseas equities exceeding UK by roughly 3.7 to 1. This diversification reduces concentration risk across different economies and regulatory environments. The overseas holdings likely include exposure to the Russell 2000 Technology Index benchmark, indicating investments in US small-cap and technology sectors within the 248-stock portfolio. The investment manager’s geographic diversification strategy mitigates risk by spreading investments across multiple regions and industries.

Share Price Discount to NAV and Market Trading Characteristics

On 30 June 2026, Herald Investment Trust shares traded at an 11.3% discount to NAV, with the share price at 3070.0 pence versus a NAV per share of 3459.7 pence. Such discounts are common among closed-end funds, influenced by investor sentiment, liquidity, trust size, and cost structures. The 11.3% discount implies investors paid approximately 89 pence per a100 of underlying asset value, reflecting market perceptions of portfolio composition and broader conditions.

Year-to-date, the share price increased 27.7% while NAV rose 28.1%, indicating a slight widening of the discount by 40 basis points. Investors buying at a discount acquire assets worth more than the purchase price in NAV terms, with potential value realized if the discount narrows, NAV grows faster, or the trust is liquidated at NAV. The report does not provide management commentary on the discount’s attractiveness or risks.

Comparative Benchmark Performance and Relative Returns

Since inception in February 1994, Herald Investment Trust’s NAV growth of 3405.2% has vastly outperformed the Deutsche Numis SC plus AIM (ex. Investment Co's) Index, which rose 240.4% over the same period—approximately 14 times higher returns. Year-to-date, Herald’s NAV increased 28.1% compared to a 0.1% decline in the index, reflecting consistent outperformance across timeframes and market conditions.

The Russell 2000 Technology Index, measured in sterling, has delivered 1195.4% returns since March 1996, trailing Herald’s longer-term performance. However, its 51.6% year-to-date gain surpasses Herald’s 28.1% NAV growth, illustrating the trust’s more balanced portfolio with substantial cash, bonds, and UK equity exposure resulting in more moderate returns amid strong US tech sector gains. The announcement lacks forward-looking guidance on expected benchmark-relative performance.