| Investment Trust- Thoughts (March 2024)

28th Feb by Charles Mitchell

141 comments 5203 reads

Investment Trust- Thoughts (March 2024)

(Slightly early but away today for the rest of week and easier to produce in office with 2 screens)

For more information on Investment trusts visit:

Association of Investment Companies.

https://www.theaic.co.uk/
Free to sign up. On the site you can create portfolios, screen and compare Investment Trusts by Geographic region, Sector , Yield and more. A few Trusts who are not AIC members have limited data.

The Investment Trust Handbook by Jonathan Davies has articles and data on Investment Trusts. The 2024 edition is out now.
Available online or from Jonathan Davies's website https://money-makers.co/.
You can also sign up(Paid membership) for insights on Investment Trusts from him and others. Weekly email and podcast .

Citywire do a daily Investment trust email. Free, does have sponsored content but keeps you up to-date with Investment Trust news.

https://citywire.com/investment-trust-insider

Trustnet have an Investment trust section. https://www.trustnet.com/

Plenty of performance data on that site.

Edison cover Investment Companies and do a monthly Investment trust round up. You can sign up for free.

https://www.edisongroup.com/equities/investment-companies/.

You can sign up for newsletters/fact sheets from most of the Investment Trusts on their websites.

For ETF's I use https://www.justetf.com/uk/. You can screen buy region, sector and see performance comparisons.

February 2024 Investment Trust monthly performance. (up to 28/2/2024)

Any errors please advise.

Equity invested only.

Top 10

Weiss Korea Opportunity Fund (LON:WKOF) +18.5%

CC Japan Income and Growth Trust (LON:CCJI) +12.6%

Blackrock Greater Europe Investment Trust (LON:BRGE) +12.5%

Manchester And London Investment Trust (LON:MNL) +12.1%

VietNam Holding (LON:VNH) +10.2%

Martin Currie Global Portfolio Trust (LON:MNP) +9.4%

Chrysalis Investments (LON:CHRY) +9.4%

Onward Opportunities (LON:ONWD) +9.4%

Gulf Investment Fund (LON:GIF) +8.7%

Biotech Growth Trust (LON:BIOG) +8.4%

Bottom 10

Schiehallion Fund (LON:MNTN) -17.1%

British and American Investment Trust (LON:BAF) -15.8%

Foresight Sustainable Forestry (LON:FSF) -11.1%

Hipgnosis Songs Fund (LON:SONG) -10.1%

Lindsell Train Investment Trust (LON:LTI) -9.9%

Schroders Capital Global Innovation Trust (LON:INOV) -8.2%

Sure Ventures (LON:SURE) -6.8%

HICL Infrastructure (LON:HICL) -6.3%

Pantheon International (LON:PIN) -6.3%

Ecofin Global Utilities and Infrastructure Trust (LON:EGL) -5.3%

All Funds

Top 5

Weiss…

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Charles Mitchell

26th Mar

I take the view that the fee is like a head office overhead in a business. As long as the Trust continues to perform all good for me. I hold.

Brucie5

27th Mar

What a great thread! Between this and Ken's Quality/Bargain thread we seem to be serious danger of getting the best of several worlds without the bad manners of advfn. For the record, I hold a quite a few ITs in several folios including a couple that I advise and those tend to fairly passively managed with the usual suspects; but on my own account currently BPCR, BRSC, GCP, GSF, HFEL, GPM, JSGI, & VOF. Some of these are clearly hi-income ideas; of which GSF has been the most erratic performer. I've only just just started building a position in GPM, which I feel may well be getting ready to ride secular rise in gold and silver; it's ups and downs seem remarkably clear to see, unsurprisingly perhaps because it's essentially a trend follower. HFEL, as Ken says, seems to be at an inflexion point on the chart with a huge dividend. VOF looks hot to trot; and as others have suggested, I think there might be a good chart forming at China Growth and Income. BRWM is definitely a share to hold for term, and simply add or reduce according to larger trends; I hold it other advisory 3rd party folios along with others too numerous to mention!

donald pond

I am trying to shake up the board at Digital 9 Infrastructure (LON:DGI9) . I will post the emails I have sent onto the DGI9 thread, but would be grateful if anyone affected or supportive would send similar correspondence to the manager and the regulator.

I should add I also hold EBOX, RECI, SUPR, & VSL, but the fact that I forget to mention is probably because they just sit in my folio paying dividends. VSL, however, is a bit of an enigma; in process of being wound up to return NAV to shareholders, it appears to be paying 15% while on a 35% discount. On the surface, a win-win for the patient; but this doesn't appear to have helped the share price! RECI is also perhaps a buy for the brave or the credulous, yielding 10% on real estate 'senior debt' at a discount to NAV of 20%. I'm not sure anyone quite knows why, but perhaps others here have a view?

Brucie5- I have just boughtBlackRock World Mining Trust (LON:BRWM) for wife's ISA- yield is attractive. I have no idea on where commodity prices will go short term, but longer term they should increase as demand increases as the low carbon transition increases demand for a range of commodities.

I have emailed saying the 20 day period is up for addressing the complaint and her nothing.

Yes indeed. Maybe a reason to look at the investment companies rather than the trusts themselves? Such as POLR - good dividend to be getting on with as well!

Yes - that sounds like a fair prognostic! Also worth seeking copper plays on similar basis.

Donald- just had a reply from Triple Point. Says very little other than saying all is being done in an orderly fashion. Looks like the Board need to be replaced- see they now have 4 Corporate advisers and fire Triple Point.

29th Mar

Baillie Gifford Shin Nippon (LON:BGS) "

nother year of poor performance has encouraged Baillie Gifford Shin Nippon (BGS ) to offer investors a 15% exit if returns from the Japanese smaller companies fund do not beat its benchmark over three years.

Annual results this week showed the £374m trust suffered a 14.9% drop in net asset value (NAV) in the 12 months to 31 January, with shareholder returns tumbling 20% versus a 6.3% rise in the MSCI Japan Small Cap benchmark.

This leaves the fund’s NAV down 6.8% over five years with shareholders 26% worse off against a 24.1% rise in the index.

The investment company, which is run by Praveen Kumar, was hit by the rotation into lower growth, large-cap stocks and companies with exposure to troubled China.

In a bid to protect investor returns should the underperformance continue, the board is ‘committing to a one-off performance-triggered tender offer for up to 15% of the company’s issued share capital if the company’s NAV per share total return underperforms the [benchmark] total return over the three years to 31 January 2027’.

As is conventional, the tender offer would be priced at a 2% discount to NAV less costs."

From the AIC website- more here.

I am considering a purchase to balance my existing holding of Nippon Active Value Fund (LON:NAVF)

ShoeShineBoy

1st Apr

Hi Ken,

thanks for the feedback. I tend to run a concentrated portfolio (approx 16 to 20 stocks/trusts) and wouldn't buy anything these days without reading the latest annual or interim report. Not in detail maybe but just to get a feel for how mgt think and behave. If I had done this in the past then I probably wouldn't have bought some of the shares that I ended up taking a loss of more than 20% on, those buys clearly didn't make sense in hindsight and were completely avoidable. Oh well, bought experience and all that!

Reading my previous post, I really shouldn't be surprised that a trust with a 25% exposure to private equity trades on a larger discount. It's obvious when I think about it. It's good to stand back and think about these things later rather than get bogged down in tons of detail. Take the easy decisions SSB!

The following email from Dynam Capital dropped into my inbox the other day. I'm sure others also got the same email but I will copy the link here in case.

https://tinyurl.com/4sy7am89

All very positive, Dynam Capital are certainly good at marketing their trust. Very few negatives discussed or even mentioned.

I would like to increase my exposure to Vietnam as my holding is very modest and the piece that got my interested was: "The market is appealing cheap, with stocks trading at around 10 times earnings and companies forecast to grow their earnings by an average of 10% in 2023".

A quick search on Google allows me to estimate the PE ratios of the top 10 names in VietNam Holding (LON:VNH) (which account for 64% of the total NAV):

FPT Corp: PE ratio of 21

Military Commercial Joint Stock Bank: 7

Gemadept Corp: 10

Saigon Thuong Tin Commercial Joint Stock Bank: 7

Joint Stock Commercial Bank For Foreign Trade of Vietnam: 17

Phu Nhuan Jewelry JSC: 26

IDICO Corp JSC: 25

Asia Commercial Joint Stock Bank: 6

SSI Securities Corp: 17

FPT Digital Retail JSC: n/a (presumably not making any profits to generate a PE ratio)

I will wait to increase my exposure. The discount on VietNam Holding (LON:VNH) is currently 8% but recently touched 0% so I think I can afford to be patient.

VinaCapital Vietnam Opportunity Fund (LON:VOF) recently issued their February update:

https://tinyurl.com/9btrr289

And also their interim statement:

https://tinyurl.com/3ymyv8kv

Stable interest rates, improving real estate market and the influence of retail investors gets mentioned multiple times in the interim statement.

The February update tells us the trust has a 19.8% investment in private equity. Can I get more comfortable around this ? Page 16 says:

"Many publicly listed companies in Vietnam still impose restrictive foreign ownership limits. Although public companies are permitted to lift these limits, fewer than 100 companies have chosen to do so. As such, particularly for high-quality publicly listed companies with no room for additional foreign investment, foreign investors may need to pay a premium if they want to find a foothold into these publicly listed companies.

In private companies which are unlisted, these foreign ownership restrictions largely do not apply, enabling our fund to take meaningful stakes in these high-quality companies. Our approach involves identifying both private companies and investing at an early stage of their development and capture their long-term growth. Moreover, within private companies, we are able to exert significantly more influence on governance and help push forward strategic drivers for growth".

So there are positives with the private equity holdings it seems. Maybe I should trust VinaCapital Vietnam Opportunity Fund (LON:VOF) to manage this the same as HgCapital Trust (LON:HGT) which I hold. I will give some more thought to VinaCapital Vietnam Opportunity Fund (LON:VOF).

SSB

2nd Apr

Craig at VNH will always respond to email questions. Not contacted VOF (which I also hold) so no comment on that. I do like funds that respond- although hold some Blackrock Trusts and they never do !!

KevinS1

3rd Apr

I often wonder about diversifying like this, but then also consider that this might just be diworsifying.

For example, I too hold Nippon Active Value Fund (LON:NAVF) and thought about the same diversification at the weekend with Baillie Gifford Shin Nippon (LON:BGS)

BUT............by holding Nippon Active Value Fund (LON:NAVF) I am already diversified - it has a good spread of companies which by that very nature means I am already diversified.

More importantly it is currently doing very well - a winner, which hopefully will continue performing.

By diversifying into another trust I feel (now I have thought about it further) that I risk simply diluting the gains in the winner. I appreciate Baillie Gifford Shin Nippon (LON:BGS) covers a different part of the market, but why suddenly will it become a performer and "add" to the overall return.

I am not challenging your thinking Charles (as I had exactly the same thoughts), but have decided myself that in this case I will not look at bringing in a different trust for diversification, but will stick with what I currently have.

My overall PF has over the last years performed like a very weak tracker, and I am sure that some of this is down to over diversification and it is something I need to address - get stronger convictions on a smaller number of stocks.

KevinS1- The two trusts have very different investment objectives- hence my thinking.

turbo

Fri 10:27am

"Not too impressed with the Board of Regional REIT (LON:RGL) . It was a risky investment, but they have handled it very badly. I will be contacting them."

RGL chart showing some bullish signals with decent upside. Any further thoughts on this, am thinking of taking a punt based on chart, little or no research otherwise...

Fri 10:46am

Got a limited response turbo. I am probably going to buy more to average down- I remain certain the board will have to do something to sort this out.

Fri 10:49am

Seems to be breaking out as we speak, have bought some

Fri 10:52am

I need to sell something-in a SIPP.

Fri 2:09pm

Ken, JCGI is looking very perky of late and the 11% discount gives a yield of >6%. The recent strength of HFEL from a low base may well imply some recovery in store for JCGI, though obviously with more specific risk. However, to be out of China altogether with the the this sp seeming to recover from a 5 year decline to the present quarter of £8 peak price , may also seem an opportunity cost of sorts?

Fri 2:11pm

BRWM on a bit of a tear; also promising is CYN. GPM has retraced, but that in itself looks extremely bullish on a 5 year view, so long as it stays over 30p.

Investment Trust- Thoughts (March 2024)

Investment Trust- Thoughts (March 2024)

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Charles Mitchell

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