Investment Trust-Thoughts (Feb 2024)
Investment Trust-
Thoughts (February 2024)
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.
January 2024 Investment Trust monthly performance.
Any errors please advise.
Equity invested only.
Top 10
Foresight Sustainable Forestry (LON:FSF) +24.8%
Barings Emerging Emea Opportunities (LON:BEMO) +12.1%
Marwyn Value Investors (LON:MVI) +9.9%
Crystal Amber Fund (LON:CRS) +7.1%
Allianz Technology Trust (LON:ATT) +7.1%
India Capital Growth Fund (LON:IGC) +6.6
Manchester And London Investment Trust (LON:MNL) +6.6%
Chrysalis Investments (LON:CHRY) +6%
Polar Capital Technology Trust (LON:PCT) +5.4%
River and Mercantile UK Micro Cap Investment (LON:RMMC) +5.2%
Bottom 10
Jpmorgan China Growth & Income (LON:JCGI) -10.8%
Fidelity China Special Situations (LON:FCSS) -9.9%
Pacific Assets Trust (LON:PAC) -9.9%
Baillie Gifford China Growth Trust (LON:BGCG) -9.7%
Augmentum Fintech (LON:AUGM) -8.9%
Worsley Investors (LON:WINV) -7.8%
BBGI Global Infrastructure SA (LON:BBGI) -7.8%
Blackrock Latin American Investment Trust (LON:BRLA) -7.8%
Weiss Korea Opportunity Fund (LON:WKOF) -7.7%
HICL Infrastructure (LON:HICL) -7.1%
Including Energy and Commodity funds, Property, Fixed Interest.
Top 5
Grit Investment Trust (LON:GRIT) +76.5%
Foresight Sustainable Forestry (LON:FSF) +24.8%
Biopharma Credit (LON:BPCR) +12.9%
Barings Emerging Emea Opportunities (LON:BEMO) +12.1%
Marwyn Value Investors (LON:MVI) +9.9%
Bottom 5
Gresham House Energy Storage Fund (LON:GRID) -40.4%
Harmony Energy Income Trust (LON:HEIT) -27.9%
Gore Street Energy Storage Fund (LON:GSF) -38.42%
Custodian Property Income Reit (LON:CREI) -16.3%
SDCL Energy Efficiency Income Trust (LON:SEIT) -15.1%
I bought Blackrock Latin America a bit early !! And was surprised Gore Street did so badly which I hold for my wife in her ISA.
Disclaimer
This is not financial advice. Our content is intended to be used and must be used for information and education purposes only. Please read our disclaimer and terms and conditions to understand our obligations.
154 comments
There has been quite a bit of movement in India Capital Growth Fund (LON:IGC) which I hold. They did fall back to around 145p but are up over 9% today. Anyone know why the large rise today?
Hi Rusty- value investors moving into the market after 5 days of decline.
See March version of Investment trust thoughts. Link to Times of India market report.
Mello have a presentation by Ocean Dial and India Capital Growth Fund (LON:IGC) at 13:00 today. Plus River and Mercantile River and Mercantile UK Micro Cap Investment (LON:RMMC) . It is free . https://us06web.zoom.us/webina...
Hey Ken
Agree the discount on VietNam Holding (LON:VNH) seems too narrow, even heading to a premium some days. But isn't this driven largely by the excitement over their holdings in FPT? Seems a lot of comment around that this is flying and expected to be one of the tech stars this year.
I hold some VinaCapital Vietnam Opportunity Fund (LON:VOF) which has been relatively disappointing so far. Hope you're right that the discount will narrow and the NAV keep heading up. Seems a logical place to be investing but that doesn't mean we'll see a return any time soon!
Tempted to pick up a few VietNam Holding (LON:VNH) when cash available.
Hope all is well.
Hi sevenccc
I’ve seen this point about a key reason for the VietNam Holding (LON:VNH) outperformance being their stake in FPT but VinaCapital Vietnam Opportunity Fund (LON:VOF) also holds FPT. Admittedly FPT is 15% of the VNH portfolio and only 7.5% of the VOF portfolio but does that merit VNH trading near par and VOF at a big discount?
Hope you’ll post if spotting any tempting IT OR share buys.
I'd missed the 7.5% of VOF being in FPT so thanks for that. Could be the making of a good year for both if the pundits are right, never mind the favourable conditions in Vietnam.
The share I really like most at the moment is an oiler....Arrow Exploration (LON:AXL) . Like Petrotal (LON:PTAL) it seems to have a good growth path and should be employing 3 drill rigs as the year progresses. Reminds me of the big win we had with Mike in East Africa. Was that with Cluff Oil? Seems they hit oil with every drill. No divis yet as still proving up the field. Enough revenue to be self funding.
Have a couple of junior miners I'm interested in too. But highly speculative pints at this stage. Not really for IT thread!
Otherwise waiting patiently for inflation to come down and the REITS to take off. Holding all the property plays you mention here frequently. And happy to collect the dividends while we wait.
Interesting article on Citywire regarding FPT
https://citywire.com/investmen...
Many thanks Charles. Your idea of a new thread every month is great and even better that you are prepared to do it. Interest in Investment Trusts is slowly increasing as a result.
As for Vietnam, VinaCapital Vietnam Opportunity Fund (LON:VOF) or VietNam Holding (LON:VNH) or both and whether to invest there I’ve done a bit more digging,
First point is that the Vietnam Index is up 20% since the low last Autumn. I’m no forecaster but a chance of a temporary dip/profit taking?
Then following up the posts on the recent underperformance of VinaCapital Vietnam Opportunity Fund (LON:VOF) …..it is marked and the big discount to NAV certainly looks more something to take advantage of than to fear.
Since the nadir for Vietnam index and the 3 Vietnam Trusts in Autumn 2022 these are the share price performance figures since then:-
VinaCapital Vietnam Opportunity Fund (LON:VOF) UP just 10% since then from 406p to 441p.
Vietnam Enterprise Investments (LON:VEIL) also only UP 10% from 529p to 575p.
BUT WOW! VietNam Holding (LON:VNH) UP 60% from 232p to 372p. A good part of that massive outperformance is simply because of the narrowing of the VNH discount to just 3% while VOF has gone out to 24% discount and VEIL still on a double figure discount.
Again. Suggests that VNH is overbought while VOF is anything but.
I’ve also checked out the top 10 holdings of VinaCapital Vietnam Opportunity Fund (LON:VOF) and VietNam Holding (LON:VNH) . I much prefer conviction portfolios with a large chunk in the top 10 holdings. Both fit the bill as VOF has about 45% just in their top 5 holdings, and VNH a bit under 40%. They both hold the same shares sometimes too.
VietNam Holding (LON:VNH) portfolio top 10 has done better than VinaCapital Vietnam Opportunity Fund (LON:VOF) year to date mainly because of big 28% gain for Military Commercial Joint Stock Bank where they hold 5.6% in their portfolio. Both Trusts hold Asia Commerce Bank which is up 14% ytd. It’s the biggest holding in VOF portfolio at 13.6% compared with 4.9% in VNH portfolio.
Helpfully both Trusts issue very good monthly updates and often include comment on some of their largest holdings. The latest one just issued by VinaCapital Vietnam Opportunity Fund (LON:VOF) is below.
So it’s VinaCapital Vietnam Opportunity Fund (LON:VOF) that looks the better buy but I hold both.
https://vinacapital.com/wp-con...
Thanks Ken for that- the monthly was actually the idea of another poster though.
I had a good look as well- hence selling some of our VNH and buying VinaCapital VOF.
I do like the VNH management- Craig Martin is a great communicator and the monthly newsletters appear honest-to me. I will be buying more of VNH/VOF when funds come in- Emerging market status for Vietnam must be close and that will bring the Emerging market ETF's and other weighted funds in to the Vietnam market.
I will create the March discussion on Feb 28th a.m- I am away from Weds afternoon and easier to do with the 2 screens in my office rather than a laptop. So top 10 etc will show last 30 days performance.
I have bought some Gresham House Energy Storage Fund (LON:GRID) for the Income ISA of my wife's. They announced an Capacity Market auction result this morning- and with a discount of 56.3% and a yield of 8.6% plus a share buyback in place looks relatively risk free. It is the 2nd highest Trust in the Renewable energy Infrastructure sector of the AIC, which I do not quite get as Gore Street Energy Storage Fund (LON:GSF) (also hold) is on a discount of 38.6% and a higher yield.
The full announcement is here
Salient points in summary are these
"We're pleased with these results from the latest annual Capacity Market auction, as well as their expected positive contribution to our NAV from 31 March 2024.
"the additional contracts are expected to generate £3.2mn of additional revenue from October 2024 to September 2025."
Following up previous posts on VinaCapital Vietnam Opportunity Fund (LON:VOF) here’s an interesting link from CNBC today on the strong investment case for Vietnam.
https://www.cnbc.com/2024/02/2...
Here’s the first bit of that commentary which includes VIETNAM to see the SHARPEST INCREASE IN WEALTH GROWTH IN THE WORLD over the next decade. I
VinaCapital Vietnam Opportunity Fund (LON:VOF) share price 444p and NAV (reported and updated daily) is 584p and as argued before, looks exceptionally good value. If the content of the above article is even half correct VinaCapital Vietnam Opportunity Fund (LON:VOF) investors won’t regret buying now while the Trust is at a bargain price. Nowt wrong with the other two Vietnam Trusts Vietnam Enterprise Investments (LON:VEIL) and VietNam Holding (LON:VNH) but it’s VinaCapital Vietnam Opportunity Fund (LON:VOF) discount to NAV that is the widest while VietNam Holding (LON:VNH) discount is much narrower than usual.
I hold VinaCapital Vietnam Opportunity Fund (LON:VOF) and VietNam Holding (LON:VNH)
VietNam Holding (LON:VNH) January report. (I hold)
Vietnam Holding Limited (VNH) Investor Report – January 2024
Banking on the Year of the Dragon
As figures for January show, Vietnam’s macro-economic landscape provides a promising setting for growth in the Year of the Dragon. To start, the country celebrated a significant trade surplus of USD2.9bn in the first month of 2024, with both exports and imports posting the strongest growth seen over the past two and a half years.
Exports of electronic items led this jump, with high shipments of products in general to all key markets. The momentum in retail sales also continued from the month before, with a solid 8.1% year-on-year (YoY) rise despite the high base given Tet fell in January in 2023. The sustainable growth was driven largely by travel services, which had a stunning rebound, even marginally exceeding pre-Covid levels. Manufacturing activity in Asia overall improved considerably in January, particularly in Vietnam and South Korea, as stronger demand from major markets offset the slump in China. For the first time in five months, Vietnam's PMI rose over 50.
Increases in Vietnam's foreign direct investment (FDI) and public investment disbursement in January are also worth highlighting. Registered FDI reached USD2.4bn, up 40.2% YoY, the highest level seen since 2020. Much of this rise came from new commitments, indicating a strong start to the year, with more than half coming from the property industry. Furthermore, public investment increased by 12.5% YoY, accounting for 4.4% of the 2024 plan, and we expect this to remain one of the government's primary priorities in 2024.
With liquidity further easing and inflation cooling, favourable effects of Vietnam’s monetary policy are likely to become even more effective for its economy in 2024. Plus, in terms of building greater trust, the Vietnamese authorities’ anti-corruption effort continued to hit headlines in the few weeks of 2024 with several significant events in both the public and private sectors.
For example, the People's Court in Ho Chi Minh City installed security cameras and additional fire safety equipment to safeguard six tonnes of files related to the Van Thịnh Phat scandal. The municipal Party Committee also said that it will compensate persons who report corruption with up to VND 10m (USD 420) "if their information is accurate and helps the competent agencies verify and handle corruption and negative acts." In addition, the Ministry of Home Affairs issued a regulation declaring that top government personnel should not seek "fame or power”.
As Vietnam’s stock market rally continued, January proved positive for Vietnam Holding as well, as it once again outperformed with a NAV of +2.4 versus VNAS’s 1.8%. January’s gains were largely about the banks, which have been benefiting from improved credit over recent months. The Fund is well-positioned for growth in 2024 with a modest price-to-earnings ratio of 10x and strong forecast earnings per share growth of 30%.
It is worth noting that the Fund has the narrowest discount (by far) of the three London-listed Vietnam focused funds, another compelling reason to feel good about the year ahead. At time of writing the discount has narrowed to 3%, and the share price has hit an all-time high. The Chairman of Dynam Capital, Craig Martin, will be in London, Edinburgh and Guernsey between March 18-22, do reach out if you would like to meet up in person.
We wish all investors a safe and prosperous lunar new year, and welcome the Wood Dragon.
Switching part of our VNH holding into VinaCapital Opportunity Fund VOF tomorrow. The discount is appealing plus a small yield which VNH does not have.
This has just come up on my podcast feed and thought it might be of interest here:
[Lex Fridman Podcast] #413 – Bill Ackman: Investing, Financial Battles, Harvard, DEI, X & Free Speech #lexFridmanPodcast
https://podcastaddict.com/lex-...
This has just come up on my podcast feed and thought it might be of interest here:
[Lex Fridman Podcast] #413 – Bill Ackman: Investing, Financial Battles, Harvard, DEI, X & Free Speech #lexFridmanPodcast
https://podcastaddict.com/lex-... via @PodcastAddict
Just received this from InvestChile Report- gives an idea of the growth in foreign Investment in Chile. Blackrock Latin American Investment Trust (LON:BRLA) has 5.8% in vested in Chile. A direct route would be through an ETF-iShares MSCI Chile ETD is one of them.
BlackRock World Mining Trust (LON:BRWM)
I follow and invest in.
Interesting to note that the discount, per my model based on the top 10 holdings, has gone out to 6.4% which is high for this IT.
Might be worthy of consideration if you're interested in the sector / bullish on the sector in 2024.
A.
BlackRock World Mining Trust (LON:BRWM) is a good trust to use for a wide selection of commodity players. Its investment team are very good and has some excellent long-term track records.
However, it is currently suffering from the slow-down in commodities and is likely to continue this trend until there is an uptick - who knows when that will be, but it def needs China to restart its growth and potentially also some form of catalyst in the copper world - wether that be strong growth of EV's and/or the infrastructure roll out to support it - wether that be in terms of charging and/or rewiring of grid infrastructure across multiple regions.
In the meantime there is rumoured to be a dividend cut coming in BlackRock World Mining Trust (LON:BRWM) as it only pays out what it gets from its holdings (plus some slight use of reserves to try and flatten the impacts). With all of the big commodity co's likely to reduce their dividends I suspect we will see a reasonable drop.
Saying this there are opportunities to buy when the price is low as it will undoubtedly come back once the commodities sector ticks up again, so now could be a good time.
I do hold it across my PF's but I tend to be a buy & hold investor for a lot of my PF's as I cannot time the market particularly well and like the dividend income whereas if I chop and change I often miss out in the long-term with hindsight.
KevinS1
BlackRock World Mining Trust (LON:BRWM) final dividend is going to be much lower this year reflecting the dividend cuts from their portfolio holdings. Final dividend is likely to be around 15p to give a total for the year of a bit over 30p.
Mining sector dividends are huge in the good years. .e.g Rio Tinto (LON:RIO) paid nearly £8 in 2022 (around 14% at current RIO share price).
IF there’s another big Mining bull market ahead the dividends will again be very big. Even now with big recent cuts the yields are still good. And these days the big Mining Companies like those held in the BlackRock World Mining Trust (LON:BRWM) portfolio go for dividends ahead of buybacks.
Here are the BRWM top 10holdings:-
https://www.theaic.co.uk/compa...
There’s a Mining Sector thread here, including at the start why there might be a big Mining sector bull market soon. Here’s the link for it:-
https://www.stockopedia.com/co...
Gold going through the roof and this mob are doing the Harakiri. VanEck Gold Miners UCITS ETF USD A (LON:GDX) if you want a starter.
Ok and the US will start digging out its own minerals soon. Canada which has the greatest resources has gone super woke broke - good luck to them. Trump is a muppet to have let Carney in.
There have been posts here previously making the strong investment case for at least one of the 3 Vietnam Investment Trusts and with suggestion, if not familiar with the investment case, then at least to read the Monthly Reports from the Managers.
The STUNNING VIETNAM TRUST BUY OPPORTUNITY RIGHT NOW IS VinaCapital Vietnam Opportunity Fund (LON:VOF.
(AND use this link below this paragraph to check out all 3 Vietnam Trusts. Just click on each Vietnam Trust in turn for loads of info and figures on each one. For new readers to the Investment Trust threads here, a reminder that good though Stockopedia stock pages are for shares, they are NOT for Investment Trusts because must know figures like NAV and discounts to NAV are not included, whereas a lot of figures that are irrelevant for Investment Trusts are:-
https://www.theaic.co.uk/aic/f...
Why is VinaCapital Vietnam Opportunity Fund (LON:VOF) THE stunning buy now?
1. The main Vietnam index is up 11% so far this year. VinaCapital Vietnam Opportunity Fund (LON:VOF) NAV is also UP 29p since January 2nd from £5.55 then to £5.84p today.
BUT despite that NAV gain the share price is DOWN from £4.55 on Jan 2nd to £4.42. AND the discount to NAV is now exceptionally wide at 24%!!
So the share price fall this year is NOT because of poor performance. It’s mainly because the discount to NAV has widened even further.
I can’t recall in years of holding VinaCapital Vietnam Opportunity Fund (LON:VOF) the discount to NAV being SO high! If VOF was an open ended fund investors would have to pay the full £5.84 NAV price. Instead they (you?) can buy it at a bargain discount price of “25% off” £4.42p.
2. In contrast the other 2 Vietnam Trust share prices have done much better this year and unlike VinaCapital Vietnam Opportunity Fund (LON:VOF) have gone UP since Jan 2nd.
Vietnam Enterprise Investments (LON:VEIL) £5.87 now and up from £5.55 on Jan 2nd. NAV is up from £6.80 on Jan 2nd to £7.21 now. The discount is 18%.
VietNam Holding (LON:VNH) £3.75p and well up from Jan 2nd £3.25p. NAV is £3.81p. The discount is now just 3% (much lower than normal) AND unlike the other 2 VNH looks fully valued for now. The share price gain since Jan 2nd is partly because the discount has narrowed so much. That’s is SHARP contrast to VinaCapital Vietnam Opportunity Fund (LON:VOF) where the share price fall is because the discount has widened to extreme levels.
Hence VinaCapital Vietnam Opportunity Fund (LON:VOF) looking such a tempting buy now.
Finally; it might not be too much longer before Vietnam becomes officially an Emerging Market. It’s presently categororised as a frontier market. That promotion if and when it comes could see Vietnam seeing much wider investment interest. AND the current discounts could go to premiums then.
I.e there’s also a strong longer term case for investing in emerging Vietnam where more and more big Companies (like APPLE) are moving production to Vietnam, and that’s often from CHINA and TAIWAN.
I hold both VinaCapital Vietnam Opportunity Fund (LON:VOF) and VietNam Holding (LON:VNH).
Ken, VOF NAV discount. I do hold VOF and agree that it's a good investment however I do think you are over-egging the current discount to NAV figures. It has always traded at a substantial discount to NAV - a glance at the long term charts shows discount from mid 2006 to early 2016 was an averge of c. 50% and often as high as 60%. Since early 2016 the discount has been an average of around 18 - 20% with frequent peaks to the mid 20%'s. It did however, have a drop to average high single digit discount in late '20 to early '21 (perhaps that's when you bought?) but has since slowly climbed back up through the teens to now be around the 20% + mark. So I think the present figure doesn't represent the screaming buy suggested and actually merely represents a return to near 'normal' for VOF. As the prospects for Vietnam have improved, and continue to do so, is that discount warranted now? Market seems to think so but my fingers are crossed that will changes.
Thanks for the reply Lincs, and apologies because YES you are right about the very big discount all those years ago. I had completely forgotten about those huge discounts even though I’ve held VinaCapital Vietnam Opportunity Fund (LON:VOF) for most of this Century apart from selling temporarily in the 2008 Banking crisis market falls and again when I got rid of a lot of my portfolio for a short time during the covid market crash.
Not sure that what happened all those years ago re NAV counts for much now. AND the average VOF discount to NAV over the last 5 years is 18% compared with 24% now.
I’ve also held VietNam Holding (LON:VNH) for many years too. And over the years they have taken it on turn to outperform each other.
AND the key point and focus my post today was :-
1. The current exceptional underperformance of VinaCapital Vietnam Opportunity Fund (LON:VOF) compared with VietNam Holding (LON:VNH) this year.
2. That VietNam Holding (LON:VNH) is trading on a much smaller discount than usual at just 3% whereas the VinaCapital Vietnam Opportunity Fund (LON:VOF) NAV discount is higher than usual. Time will tell but I still think this represents a stunning VinaCapital Vietnam Opportunity Fund (LON:VOF) buy opportunity.
RE VIetnam
One reason why VietNam Holding (LON:VNH) is trading closer to NAV might be that 15% of the portfolio is ithe highly regarded FPT
In my view VNH are good fund managers and great communicators- which I value. They respond to email questions normally within a few days.
Morning Ken,
Most of my investment activity is in UK small caps held within an ISA, however I have a small IT portfolio and have been looking at Vietnam Trusts. Like most investors I have to sell to buy and have been pondering a purchase of VinaCapital Vietnam Opportunity Fund (LON:VOF).
However I haven’t been able to come to a conclusion as to why it trades on such a wide discount relative to the other Vietnam trusts? Is it for example its main holdings or perhaps the manger that are currently out of favour or is it just market malaise?
Can you provide an insight?
Jonno
There have been a lot of posts on this thread that answer your question about the unusually wide VinaCapital Vietnam Opportunity Fund (LON:VOF) discount as well as on the other Vietnam Trusts and on prospects etc for Vietnam market.
If you scroll through this thread you’ll come to my post written last Saturday that directly answers your VOF big discount question and making the case that this looks an excellent VinaCapital Vietnam Opportunity Fund (LON:VOF) buy opportunity.
Note that in that post last Saturday I pointed out that VinaCapital Vietnam Opportunity Fund (LON:VOF) NAV has (as is the case with VietNam Holding (LON:VNH) and Vietnam Enterprise Investments (LON:VEIL) too ) seen an INCREASE in NAV this year but a share price FALL!! The other 2 Trusts have both seen share price gains.
Supply and demand is the answer. Stockopedia tends to make people focus on the market as a weighing machine, but VinaCapital Vietnam Opportunity Fund (LON:VOF) is a prime example of how, in the short term, its a voting machine. When you drill down to the holders, you find:
There is no similar imbalance at the other funds. So this looks like Lazard selling out and putting a lid on the price. Undoubtedly worth taking advantage of the discount, but it won't change until the selling stops.
By comparison, VNH is smaller and nobody is selling and VEIl is bigger but attracting sizeable buys
Could be that VNH have a better marketing- Craig and the VMH managers are grood communicators. My preferred Vietnam fund and is performing well. They respond to questions promptly- which I like- as said before.
RE; Fidelity China Special Situations (LON:FCSS)
Obviously a poor performer recently - anyone looking at a possible turnaround?
Recently FCSS has proposed a merger with abrdn China Investment (LON:ACIC) with the FCSS name adopted for the new enlarged IT. An extract from the summary of the proposals reads....
"The Proposals will be effected by way of a Guernsey scheme of reconstruction of ACIC, resulting in
the voluntary winding up of ACIC and the transfer of part of ACIC's cash, assets and undertaking to
FCSS on a formula asset value for FAV basi"s
Interested to see what existing holders of FCSS or ACIC think of this proposal?
Could be an arbitrage opportunity- buy ACIC to take shares and cash in FCSS. I am thinking of buying China ETF rather than a trust. Not sure I have much faith in the FCSS managers at the moment.
Anyone have thoughts on SEGRO (LON:SGRO) (REIT) ? Having held previously I am relooking based on todays update
Tritax EuroBox (LON:EBOX) has a substantially higher yield.I have always struggled with SGRO has so large .
3.78% p.a. ongoing charge seems quite hefty
I rather view it as an administration cost, but yes there are quite high costs. Tritax Big Box REIT (LON:BBOX) annual fee is 0.76%
Due to the falling share price is EBOX expected to fall outside the FTSE 250........if so, what that further supress the SP short term with some funds having to sell it?
Article from Quotodata - nothing new really but a good read to remind you why you've invested in EBOX
https://quoteddata.com/researc...
Tritax EuroBox (LON:EBOX) share price has bounced to 52p today. Still very good value but up about 10% from recent double bottom.
Tritax EuroBox (LON:EBOX) share price has bounced to 52p today. Still very good value but up about 10% from recent double bottom.
I’m in recently and wondering if the sudden surge of M&A hitting UK shed investments is going to catch on in the EU. Whatever, I like an entry under 50p. Do you have a feel for a target price 12 months out? I’m targeting 70p if rates come down only slowly, 80p if promptly and less than 40p if they have to come down all at once!
BnB
So far the M&A across the Investment Trust REIT sector is distinctly underwhelming with all share offers well below NAV but sector consolidation makes sense and the result of the amalgamations should be positive with stronger Trusts the likely outcome.
As for your Tritax EuroBox (LON:EBOX) share price forecasts………goodness knows if interest rates have to come down dramatically because of a sudden big new crisis! All bets are off on that news across our portfolios!
Otherwise I’m hoping for share price in 60s as interest rate cut expectations continue the rally that’s already started, and then to low 70s on the cuts themselves to cement the gains. That would still mean Tritax EuroBox (LON:EBOX) trading at a double figure discount to NAV. IF in time the sector comes right back on to favour again and discounts largely disappear AND with NAV increase, as as reduced LTV levels, then 90p plus AND for those who bought around the recent low of 46p a doubled share price and a near 9% dividend locked in, with possible dividend increases too. But for now that’s cloud cuckoo land!
Lincs posted a very good quoted data analysis link the other day that got just 2 ticks and no follow up. It’s well worth anyone reading this, reading the QuotedData info too. Here’s the link again:-
https://quoteddata.com/researc...
I do hold Tritax EuroBox (LON:EBOX) - as mentioned on here a few times it does look very cheap and has a good & well covered dividend.
But I get most of my property exposure through TR Property Investment Trust (LON:TRY) which gives me a decent spread of European wide property exposure - 35% UK, 14% Sweden, 14% France, 12% Germany etc (according to the AIC).
It is a trust of trusts investing into a variety of other European wide property trusts with some direct holdings I believe in the UK only.
It yields 4.8% but consistently grows this. Also, whilst its official discount is just less than 3% this doesn't reflect what is called the "look-through" discounts of each of the holdings which is far wider and will hopefully lead to some useful gains as property recovers as we move through the cycle.
Whilst its yield is lower than many other property and alternatives I have had my fingers burned too many times chasing high-yielders and getting on the wrong side of the risk/reward equation.
Search back through some of the old Money-Maker podcasts and you will find the odd interview with the fund manager who is always quite impressive..............not always the most reliable of signals I know.
Hi Kevin
Thanks all for the interesting thread, I have to admit I am pretty ignorant of investment trusts and now I happily slightly less ignorant after reading these posts.
One issue I have, and please correct me if I am wrong, is that whilst Tritax EuroBox (LON:EBOX) has a current yield of 8.4%, which is very nice, it also has a management charge of 3.7%, which makes the reward on income basis less enticing. My initial thought was that this still left a net yield of 4.7%, which is still good. Then I noticed that the the management charge was a percentage of NAV, not the market value, so that with an actual price to book value of 0.6, this means the effective management charge as a percentage of market value is 3.7/0.6 or 6.2%. Thus the net yield is actually 2.2%.
Obviously the immediate attraction is a reversion of share price to actual book value, but it does undermine the investment case somewhat to my mind.
Please feel free to correct me if I have this wrong though.
David
David. Tritax EuroBox (LON:EBOX) Management fees are 1% and they reduced them from 1.2% in 2022. Other charges include transaction costs that apply to every REIT. ii and others sometimes quote incorrect figures for Investment Trust fees, possibly based on iffy information in those wretched KID documents.
I don’t get hung up on Management fees UNLESS they are excessive. And EBOX Management fees are not. Nor did fees stop Tritax EuroBox (LON:EBOX) going to a very big premium and 121p share price in 2021. Now it’s 60% lower with much of that fall simply being because the big premium to NAV has now gone to a near 40% discount.
AND that’s why the dividend yield is so high too. If interest rates are heading lower and big fall in energy prices in April increases the chance of lower inflation ahead, it might not be much be longer before the many bargain priced REITS see significant share price gains, as markets start to price that in.
There's an article about Pershing Square Holdings (PSH) in today's Investors Chronicle.
Positive I hope ? (I Hold PSH)
The article about Pershing Square Holdings (PSH) in today's Investors Chronicle is positive. To summarise, it says PSH's performance over the last 5 years has greatly surpassed the S&P 500 index, yet it is on a 27 per cent discount to net asset value. It thinks the main reasons for the discount are its high charges, comprising a 1.5% annual management fee and a 16% performance fee above a "high water mark". But Pershing's recently announced plan to launch a New York-listed closed-end fund might reduce PSH's performance fees. The plan is for the new fund to be similar to PSH but charging a 2% annual management fee without a performance fee, and for one fifth of that 2% to be given to PSH, thereby reducing PSH's performance fee by the same amount. If enough money is raised by the new fund, there could be a significant reduction in PSH's performance fee, which might lead to a reduction in PSH's discount to NAV and a corresponding increase in PSH's share price.
The article encouraged me to buy a small position in PSH today, even though I hate performance fees.
As I hold just accept the fee- it has performed well. Just a part of a mixed portfolio of shares.
Pershing Square Holdings (LON:PSH) For about three years it didn't do a lot and then suddenly over the last four-months or so its gone up by around 30% - helped by the discount closing, although it is still sat at 27%.
I don't look at the performance fee too closely - it is total return I am interested in, although I do not like the greed that floats around a high performance fee (12% over the hurdle I believe). Whilst it delivers I will hold on, but if it has a downturn then the fee will probably be enough to sway me to selling.
They are hoping to raise £8bn for the new US fund - although I did read that quietly they are looking at double that - a not insignificant amount. It could result in some hefty gains for the UK fund if its discount closes.
Just over half way through the month the Top 5 performing Trusts are
Chrysalis Investments (LON:CHRY) +25.4%
Foresight Sustainable Forestry (LON:FSF) +14.5%
Manchester And London Investment Trust (LON:MNL) +14.3
VietNam Holding (LON:VNH) +12.1%
Polar Capital Technology Trust (LON:PCT) =11.7%
The Bottom 5
Cordiant Digital Infrastructure (LON:CORD) -17.8%
Schiehallion Fund (LON:MNTN) -11.7%
Blackrock Latin American Investment Trust (LON:BRLA) -7.9%
Ecofin Global Utilities and Infrastructure Trust (LON:EGL) -7.7%
RTW Biotech Opportunities (LON:RTW) -7.5%
Interesting new investment by Augmentum Fintech (LON:AUGM) (I hold) Artifical Labs algorithmic underwriting for Lloyd's and the London market. New sector to me- the insurtech space. Newsletter here
Anyone have an opinion on the infrastructure / alternative investment trusts? I hold a collection and most are now down at previous lows or even exceeding lows of October 2023. I hold Renewables Infrastructure (LON:TRIG) GCP Infrastructure Investments (LON:GCP) NextEnergy Solar Fund (LON:NESF) HICL Infrastructure (LON:HICL) Sequoia Economic Infrastructure Income Fund (LON:SEQI) and Gore Street Energy Storage Fund (LON:GSF) - My interpretation is that there are going to be fewer rate cuts this year than expected - anything else going on?
Could be something to do with this? https://tradingeconomics.com/u... If you look at the 5 year chart, electricity prices now back to 2021 levels. Greencoat UK Wind (LON:UKW) now back to 2021 price andRenewables Infrastructure (LON:TRIG) back to 2016 price ! Not sure if this is an attractive level or not but tempting with 7.5% dividends.
GSF would be my pick - I do hold. They have good projects outside of the UK- much higher returns.
I hold too, trying to decide if I go overweight, as their geographical diversification is a real differentiator. If build out goes to plan, the UK will only be 30% of revenue by end of 2024.
raggedtp- I recently did go overweight in my wife's ISA- yield looks safe.
Many thanks for the posts here on Bluefield Solar Income Fund (LON:BSIF) and Gore Street Energy Storage Fund (LON:GSF. Until the prompt today I had resisted buying as I prefer more transparent Investment Trust portfolios. But I ended up using some of the funds from recent VPC Specialty Lending Investments (LON:VSL) and Good Energy (LON:GOOD) sales to buy BSIF today and am very tempted to buy GSF too.
This update from Quoted Data on Bluefield Solar Income Fund (LON:BSIF) helped. It’s paid for comment but is very good imo. .
https://quoteddata.com/researc...
So did the update from BSIF today:-
https://www.theaic.co.uk/compa...
So Gore Street Energy Storage Fund (LON:GSF) at 64p is not only at multi year low but also for chart fans note the recent double bottom. AND there’s that covered near 12% dividend too. Why is the discount a whopping 43%??
And Bluefield Solar Income Fund (LON:BSIF) at 102p is at its lowest price since listing in 2013. It only fell to 108p in the covid crash. 26% discount and covered 8.7% dividend.
Both suit my favourite tactic of buying at bombed out prices. Surely the share price falls are overdone? Bluefield Solar Income Fund (LON:BSIF) is down 27%over 2 year and Gore Street Energy Storage Fund (LON:GSF) down 40% over 1 year.
Ken I think so- just waiting for some more funds and will buy more for her ISA.
I like the sector but bought into it a little too early so down a wee bit on my investments - like everything and everyone else I'm awaiting the bottom and interest rates to subside. I also hold GGP, NESF, GSF but also BBGI. Here's a link to some Kepler research on BBGI - its currently paying around 6.5% divi and has several years history of rising divi rates. Basically it can be summed up by 'BBGI's conservative and defensive portfolio offers returns directly linked to inflation…'
http://tinyurl.com/mrya8etz
Bluefield Solar Income Fund (LON:BSIF) updates this morning reporting a NAV per share of 136p, vs closing price last night of 99 p. 26% discount adjusting for interim dividend. SP has moved down quite a bit since Labour's 'shelving' of the £26bn green programme last week, but feels like it has moved down on sentiment, rather than fundamentals. I'd say today's update confirms this, so will buy more.
Also reaffirms dividend of 8.8 p for the year, twice covered and announces £20m buyback, commencing after the 28/2/24 interim results.
Bargain?
OldSchool- I think so- I hold. The update was positive and as you mentioned Div twice covered plus share buyback.
Fidelity China Special Situations (LON:FCSS) might absorb abrdn China Investment (LON:ACIC) (as announced end Nov) in a vote to take place March this year. If approved there could be an opportunity as ACI trades at just over 8% discount. I am reading more and more commentators thinking that China could be bottoming.
"Shareholders of abrdn China will be offered the opportunity to roll over their shares into Fidelity China Special Situations. There will also be a cash exit worth up to 33% of share capital at a 2% discount to the net asset value. The deal is subject to shareholder approval at the end of the first quarter of 2024."
I started the first "Investment-Trust-some Thoughts " with a rant about the deal between Arix and RTW Biotech Opportunities (LON:RTWG) . I was highly critical of Arix sellung the assets to RTW, one large shareholder getting cash for their stake and the rest of shareholders paper in RTW. Well shows how much I know and I should apologise- had my shares in RTW into portfolio and it seems I am now up 9%- which is a turn around as I was down 30% in Arix. I did buy a more Arix at a lower price when the strategic review was announced so averaged down. Sold some before the deal was finalised at a small profit and now this. Lets hope the upward trend continues with RTW Biotech. I must say their communication is much better-so far- than Arix's was with shareholders, it is a sector I want to be invested in so lets hope they deliver performance and keep the discount from widening from its current 28%.
I have been watching Turkey on and off fro a while now. I received a Barings report re Barings Emerging Emea Opportunities (LON:BEMO) which featured a sheet on Turkey. See here. Confirmed what I thought- signs of economic orthodoxy and therefore some stability, despite high inflation of 64%. The sovereign wealth fund is aiming to channel $1bn via ETF's into the Borsa Instanbul. Moody's are considering an upgrade for Turkey as the risk of default has slipped. With an educated and young population (40% below 25) , decent infrastructure and placed- between Europe and Asia/Middle East it ticks several boxes for rapid economic growth which in turn should lead to more discretionary consumer spending as wealth increases in Turkey.
Historically Turkey has always been well placed for trade over the ages- just finished reading " A Travel Guide to the Middle Ages: The World through Medieval eyes" -fascinating read of how people would travel from Europe to China for trade.
I have bought exposure through iShares MSCI Turkey UCITS ETF USD (Dist) (LON:ITKY) rather than BEMO as I wanted a pure play on the Turkish exchange.
I’ll post this just as a one off as it shows the performance of a long term Investment Trust portfolio. It’s a virtual portfolio I did on Mike Walters site (it has now closed) with no cheating allowed.i.e there are dealing costs and the buy and sell prices are always the price available at the time of the buy or sell post. I made a lot of the sell and buy decisions but the superb way it was presented was done by a poster “number33” with exceptional computer skills. He is continuing to update it, at least for now on Reddit.
Key things to note are the great gains from the long term holdings and also how poor in comparison performance over the last 3 years has been, reflecting the simple fact that discounts have widened a lot and to the extent that quality buys now could do very well. The stakes in the big winners were reduced after top slicing from original £2500 stake.
Also note that though the Mining sector is very cyclical, if buying as I have for my portfolio and did for this virtual portfolio, the extreme dips like in 2015 huge Mining bear market or again at start of recovery from 2020 covid crash, later dips like the current one can be ridden out. e.g the virtual portfolio BlackRock World Mining Trust (LON:BRWM) holding has tripled, so even with the current dividend cuts and current 6% or so yield, for the portfolio holding the yield is still around 18% a year which more than compensates for the temporary share price dips. The same point applies to my own CQS Natural Resources Growth and Income (LON:CYN) holding which is still triple my buy price.
Augmentum Fintech (LON:AUGM) is worth a look at in my opinion-I hold. The Trusts Top 3 Holdings- Tide, Grover and Sopa plus cash held is valued at more than the Trust's Market cap. $ of the largest 10 holdings are cash generative. One holding Onfido is in talks re a possible acquisition by Entrust. The Q3 fact sheet has just been released. They trade on a 37% discount . Over 3 years the NAV has increased by 34.3%- and the share price declined by 34.1%.
Website link is https://augmentum.vc/
I agree about Augmentum Fintech (LON:AUGM) Charles, and so much so that I bought back my holding today at 89p. I’ve pasted below a post I did on the SCVR thread when I bought at 89p before taking the profit at £1.10p lady month. The fall to 98p looks another good buying opportunity. If adding to the points you’ve made in your post today like the top 3 holdings alone being worth more than the market cap of Augmentum Fintech (LON:AUGM) and the crazy difference between impressive NAV up 34% performance but share price DOWN 34% and the buy case now the share price has again retreated, is clear.
Here’s my previous post putting the buy case for Augmentum Fintech (LON:AUGM)
“I bought Augmentum Fintech (LON:AUGM) at 89p today after their very encouraging results.
https://www.stockopedia.com/sh...
Since IPO in 2018 AUGM has had an unbroken run of NAV increases, though the latest increase to 160p is small. Yet the share price has gone from the biggest premium of any Investment Trust at one point to a now big 41% discount! And if stripping out the £58 million cash the Discount is 51%. So while NAV has gone up consistently the share price has gone down consistently.
Note that AUGM have £58 million in cash and no debt. Their top 3 holdings, TIDE, GROVER and ZOPA and the cash are above the current AUGM market cap, with no value at all attributed to their £125 million of other investments.
So far AUGM have had 5 realisations since IPO and all were above the holding value.
They have been buying back shares to try and reduce the discount. They can’t issue new shares while AUGM is at a discount but the bought back shares will be held in treasury to potentially be reissued if AUGM goes to a premium again. NO chance of that for a good while but very good chance of the discount narrowing from current undeserved extreme level.
This is yet another example of Investment Trusts being SO out of favour with discounts at near record levels. The tide will turn at some point, and AUGM looks yet another oversold Investment Trust worth checking out.
Ken- it looks very good value- always been impressed with the Managers.
I am fairly a newbie when it comes to Investment Trusts. I have noted that the week to 8th Feb 2024 the NAV of Regional REIT moved around 13% (52.6p to 59.5p; 6.9p increase) due to a revaluation while the share price over the same period fell from 28.3p to 22.3p; a fall of 6p (20%). Are these movements usual for REITS.
jmallin1972
As you are new to Investment Trusts it might be wise to stick to mainstream Trusts and Countries and Regions and avoid the more complex like Commercial Property. OR if keen to go for a Commercial Property Trust then focus on the ones posted about by clued up posters here and also (unusually as so many of their bbs are full of idiot posters) ADVFN. The threads on Property Trusts there include posters (as is the case here too) with direct experience in and including Managing, Investment Trusts. Also make use of the links provided at the top of this thread by Charles Mitchell.
It’s rare for Investment Trusts to go bust but that is just possible with Regional REIT (LON:RGL) which at best now is a very high risk punt. The NAV info you posted is wrong and I don’t know where you got it from? NAV was last updated a while ago. And no, it’s not usual for REIT NAV to jump about in the way you describe.
Regional REIT (LON:RGL. Their portfolio is mainly office at a time when so many are working from home. They have a lot of debt and have a BOND due for repayment too and where is the money for that? The LTV is near a dangerous 60%. That’s not worth trying to explain except that anything above 40% is too high. The RGL share price has crashed and deservedly so. They might pull a rabbit or two out of the hat, like a couple of disposals at a decent price, but RGL is in a pickle. They have already slashed the dividend and are almost certain imo to cancel it.
Finally you wouldn’t guess much of this if reading Management updates! They seem in denial.
Really appreciate the detailed and informative response. i took the NAV from money makers website (should have double checked that with Trustnet)
I would use the AIC site https://www.theaic.co.uk/. As ken said some good Trusts out there- I mainly invest for overseas exposure like Japan, Vietnam , India , Latin America. I ythink the Private Equity funds look cheap- but then they have for a while. On the AIC site you can filter by Sector/country etc.
jmallin1972
I strongly agree with Charles about using the excellent aic website. AIC is the trade body for Investment Trusts. Here’s the link for the UK Property Trusts on there including Regional REIT (LON:RGL) Just click on each Trust to bring up loads of often must use headings also to look at.
https://www.theaic.co.uk/aic/f...
It’s also a MUST to read and try and absorb the Results updates. For starters some of the info will be difficult to understand so start with just these 2 when a REIT updates.
1. Latest NAV and is it up or down since the previous time. The hen use aic to find out the discount to NAV.
2. The LTV figure. The higher it is the riskier the Trust and anything above 40% is too high. RGL is now approaching 60%!
As for Charles’s comment about him not being as bearish as I am on Regional REIT (LON:RGL) . I’m not sure that I am. I see RGL as a very risky punt. They have a retail bond due for repayment later this year and don’t have the spare cash to pay it. IF their optimism on that is correct and they can get disposals to raise the cash or find some other way of raising the money, the share price could soar.
But if they can’t even with cancellation of their dividend then the share is heading lower still. So it depends on your risk tolerance. If your intention is to gamble it’s worth a punt. If it’s to invest in what look much better quality REITS like Tritax EuroBox (LON:EBOX) or Supermarket Income REIT (LON:SUPR) and some of the others on big discounts and paying big dividends then Regional REIT is one to miss.
Hope that helps you and like some of the posts from others here, any other readers new to Investment Trusts.
AND btw no question is stupid if we don’t know the answer, so newcomers and others should not be afraid to ask them!
Agree Ken- I take the odd punt- but not with a huge sum of money. Hold Tritax Big Box REIT (LON:BBOX) and Supermarket Income REIT (LON:SUPR) as core holdings.
Hi Jmallin1972, I hold Regional REIT- I am not quite as bearish as Ken- but the market seems to be saying otherwise and I am down on the investment. The rent collection by the company was 98.6% and the yield was 9.9% v. 9.0 in 2022. But they do have a lot of debt- so not for the faint-hearted. I am hopeful that some form of corporate activity will take place.
Here’s a link for China/Asia Trusts and Citywire on them which seems to be a QUESTOR Daily Telegraph article.
https://citywire.com/investmen...
Not sure about China yet despite the big market fall. Pacific Horizon Investment Trust (LON:PHI) gets their nod as perhaps the one to go for. It had a great record and used to trade at a premium but recent performance has been poor and it’s now on an 11% discount and looks very tempting. . Focus is on Growth shars and they’ve an interesting portfolio mix too.
Here are their top 10 holdings along with percentage in each Asian Country with most in India and China:-
https://www.theaic.co.uk/compa...
Saw that article Ken. I am going to look into, but still cannot decide on China !
Mexico overtook China as largest exporter to US in 2023. Interesting interview re near shoring and friend shoring- Vietnam supplying some goods Mexico cannot supply. I hold iShares MSCI Mexico ETF (LON:0JF4) and VietNam Holding (LON:VNH)
https://theworld.org/media/202...
At the risk of flogging a dead horse which it certainly is for me (!) the Icelandic competition authorities investigation into the Verne Global acquisition by Ardian from Digital 9 Infrastructure (LON:DGI9) will cause a delay to completion but is unlikely to halt the deal I would think/hope(!). According to Colette Ord, the Deutsche Bank/Numis analyst:
While the Icelandic regulatory process is out of DGI9’s control, and has been received in respect of the Finnish authorities, the latest delay makes it even more challenging for the market to value the shares,’
This would seem to imply that the Finnish authorities have objected to the deal on competition grounds. Difficult to see why when from a little research on the web identifies the following:
I guess we will have to see if the Icelandic authorities come to the same conclusion!! In the meantime there really is no point in my selling at a huge loss even though it might take a 3+ years to realise any value from the portfolio of assets. Fortunately was originally only about 0.5% of my portfolio but an interesting one, in a bad way, nevertheless!!
ACounsell
So that you get a reply I’ll do this short one but it won’t be much help!
I can’t comment on or answer any of your queries for the simple reason that I stopped looking at Digital 9 Infrastructure (LON:DGI9) after selling as soon as there was that first very bad news (last September from memory) at 44p.
I nearly always sell on a bad update as the case for holding has changed for the worse. And so often a profits warning or negative Investment Trust update is followed by another, and then another and the share price crashes. My reasoning is also that there are so many bargain priced Trusts to choose from at present then why hold on to iffy ones like DG19. The aim is to have a portfolio of winners, to run our winners unless they disappoint and to cut our losers once we think it’s clear we made a mistake buying it.
It’s each to our own on these buy and sell decisions but isn’t it often far better to cut the loss quickly on bad news while it is modest and look to use the proceeds in a much better alternative than to try and get our money back on a serial disappointer like DG19? It needs the DG19 share price to get nearly tripling now just to get back to the 44p when I bit the bullet and cut the loss.
Anyway very good luck whatever you decide to do with your DG19 stake now. I’ve no idea whether there’s a chance the share price might bounce but far more often than not once an investment lets us down badly it goes from bad to (sometimes far) worse. Perhaps DG19 will be a rare exception.
I wondered if you have any thoughts on the reasons behind today's fall in Good Energy (LON:GOOD)
Caulkhead.
I’ve just posted this on the SCVR thread. Probably not much help to you and it’s off topic for this thread really. Ok hopefully as a one off.
Here it is:-
“Thanks dartagnan but I’m sorry to read of your Good Energy(LON:GOOD) loss. A new lesson leaned for me is to realise that when a small share like GOOD gets tipped and hyped sometimes multiple times, the result is likely to be too many fickle small investors having far too big an influence on the share price as they buy in droves then and sell in droves.
What to do now?
I prefer selling for investment reasons when the investment case changes for the worse. E.g as soon as there is a poor update or profits warning. So I’ll probably hold until GOOD next update. Also once we’ve luckily reached the stage of having a portfolio that has long been profitable we can afford the occasional disaster. I don’t think that will happen with GOOD. Their most recent update was an above expectations one.
The additional big share price fall yesterday was probably because of Labour’s cancellation of their £28 billion green policy. And anticipation of that before yesterday could explain daily falls recently. With luck a lot of the “hot”money is out for good now if a lot have lost heavily.
Until GOOD update I’ll just remind myself why I invested. E.g those doubled profits every year forecasts.And what they do. It sounds convincing enough to me. Green energy might be slowed but it isn’t going away surely?
Below are two reminders. What they are AND the text of the November trading update, The sooner we get the nxt one the better!
Ken Mitchell
As you say your sale at 44p looks very astute particularly as Digital 9 Infrastructure (LON:DGI9) is down another 14% today! As you will have seen from my previous comments I do have plenty of other Investment Trusts in my portfolio including REITS (which you have highlighted on a number of occasions) and other income plays with solid dividend cover which have much better potential for recovery. However, unless Digital 9 Infrastructure (LON:DGI9) cannot sell any of its assets during its managed wind down (including Verne Global) over the next 3 years there must be some value, even after repaying any debt, in those assets - surely more than then c 16p share price today . I will take that risk for a very small portion of my portfolio and if it returns more than 44p I will no doubt mention it!
ACounsell - I have bought a few shares in Digital 9 Infrastructure (LON:DGI9) today. The fund is in a mess, but I think/hope that the Iceland situation has caused an over-reaction. The managers Triple Point have over £3bn under management- I would have though an incentive to sort this Public facing situation out before it effects the rest of their business. But i may be applying what I would have done- I have no knowledge of the Firm or Individuals involved. Sold a bad and impulse investment in THG (LON:THG) thinking it would bounce- it did not and down 70% of what I paid- so hopefully not jumping out of the frying pan into the fire !!
Deleted.
Ken Mitchell
I think it is worth pointing out that many of my Investment Trust holdings are in the alternatives space (approx 7% of my total portfolio) - principally infrastructure (renewable & traditional) and 'defensive/absolute return' vehicles. The infrastructure funds were purchased for decent dividend yields backed by solid balance sheets (admittedly with the odd bad choice in the mix - Digital 9 Infrastructure (LON:DGI9) and Asian Energy Impact Trust (LON:AEIT) !)at a time when gilts were offering close to zero. The rapid increase in gilt yields and inflation has obviously hit share prices and discounts to NAV very hard. However, for many of the better trusts (e.g Renewables Infrastructure (LON:TRIG).Greencoat UK Wind (LON:UKW) ) the dividend rationale remains in place and trading in and out of this type of Investment Trust because of what, hopefully, is a temporary situation (i.e. interest rates and gilt yields should start to fall if not to previous low levels) is inappropriate for a medium/long term holder seeking income in retirement. This approach to alternatives is more eloquently explained by Jonathan Davis of Money Makers in his weekly update newsletter, available to subscribers athttps://money-makers.co/ in a response to a tweet by Mark Dampier of Hargreaves Lansdown. Too long to repeat here it it is an excellent explanation of why private investors such as myself are prepared to continue to hold 'good' investment trusts even at with quite dramatic share price discounts to NAV. Clearly Digital 9 Infrastructure (LON:DGI9) falls into the 'bad' category which is a failure I can live with!
ACounsell.
I agree with most of that, especially so your point about trading in and out of Investment Trusts. I don’t do that either and much prefer buy and hold. That applies to shares too.
Where we perhaps differ is that once an investment (share or Trust) disappoints with a profits warning or other bad news I’m out and usually for good. That means the loss cut quickly and failed investments in our portfolios kept to a minimum. So my Digital 9 Infrastructure (LON:DGI9) sale at 44p which you flatteringly called “astute” was really just using my favoured investment method. Our portfolios can cope with the odd duff or daft failing investment but so many small investors seem to favour holding on to losers in the hope that one day they will recover, instead of goimg for much better quality alternatives far more likely to get back the money lost.
As for Digital 9 Infrastructure (LON:DGI9) I hope you recover some of your losses. Charles Mitchell has bought today which might be reassuring. Don’t hesitate to post if the share price gets back to 44p! I’ll be quick to congratulate you…but might not be able to resist pointing out that if only you had sold at 44p and bought back around 16p you would have a near triple instead of a break even outcome.
In case my posts suggest I always get it right I too fall for the failings I point out in posts like this one, E.g I kept averaging down Boohoo (LON:BOO) determined to get my money back and just got further losses before giving up for good, and recently have done the same with Revolution Bars (LON:RBG) despite it being so clear it’s likely to be throwing good money after bad. But I rarely do that with Investment Trusts.
btw I don’t sell losers just because the share price has fallen and by some arbitrary 20% or whatever stop loss price. I sell if an update shows why the share price has fallen and accept that I’ll lose a lot more than 20%. Current examples where I’m down 22% and 16% are Tritax EuroBox (LON:EBOX) and Henderson Far East Income (LON:HFEL) . EBOX looks way oversold on a 40% discount. The HFEL fall is fully deserved on awful recent performance but there are signs now of that turning round at last. And with both there are those very big dividends to cushion the losses.
I would be not too reassured ! But looking at portfolio and listening to the gloomy presentation by the board I felt there is a chance of seeing plus 40 p. Some assets do look hard to dispose of, not sure what the board and managers were thinking of with a couple of investments.
It would reflect badly on Triple Point if it went bust in my opinion. Having said that if I see a 15% uplift from my purchase price I will probably sell.
Charles
Triple Point Energy Transition (LON:TENT) (LON:DGI9) was one of Simon Thompson’s 2024 bargain portfolio tips this week.Hence the 10%+ gsin on Friday. His selections this year did badly but that’s very unusual and his picks usually way outperform the UK Market. What are the links if any of the DG19 and Triple Point Energy Transition (LON:TENT) Management?
Simon T reckons that TENT shareholders could recoup 90p in cash over the next 12 months. Is that realistic?? He reckons disposal of the CHP and hydroelectric assets should return around 75p of cash. Sounds too good to be true so is there a catch Simon T has missed?
Hi ACounsell,
I read that newsletter too. For me it’s the difference between a situation which represents a permanent risk of a loss of capital (potentially such as Digital 9 Infrastructure (LON:DGI9) unfortunately), and something which is exhibiting short term volatility, such as some of the better / established alternative trusts. Where there is volatility caused by higher interest rates leading to higher discount rates for cash flows and higher rates of return on cash etc. As Jonathan said, the alternative trusts came to the market at a time where there was a lack of income from more conventional areas.
For those of us foolish enough to continue to hold Digital 9 Infrastructure (LON:DGI9) I posted these two comments on the SCVR blog in response to Mr Contrarian comment on the latest announcement and consequent share price further collapse! As this is a more relevant forum does anyone have any additional thoughts - apart from Ken Mitchell correctly saying I should have sold long ago!!
9:06 amDigital 9 Infrastructure (LON:DGI9) I too hold and very much wish I didn’t!! Share price down 20% this morning. Not entirely sure why there should be any competition issues with the sale of a data centre to a third party. Seems unlikely (?) that they would block the transaction and a delay of 90 to 135 days in the overall wind down which is forecast to take until 2027 at the earliest is hardly significant. However, I guess if the sale proceeds from Verne were needed to pay off debt maturing in the next few months it could force Digital 9 Infrastructure (LON:DGI9) into insolvency. What a mess!!
40 minutes agoSome further comment on Digital 9 Infrastructure (LON:DGI9) . Ardian the buyer of Verne Global is a large private equity outfit https://www.ardian.com/house with investments in over 300 businesses globally (including exits). Having reviewed the portfolio https://www.ardian.com/experti...and press releases the only businesses they own in Iceland appear to be Mila - the national telecommunications network https://www.ardian.com/news-in... and a carbon monitoring activity at the national airport. The first of these was cleared by the Competition authorities so it seems unlikely that Verne Global would be blocked - but what do I know! . Perhaps the issue is as I said in my previous comment is down to timing of monies to pay down debt. Otherwise it would seem little more than a technicality and an over reaction to see a further 20% fall in the already bombed out share price.
Charles Mitchell and KevinS1,
Thank you for your replies. Nippon Active Value Fund (LON:NAVF) was the one that I fancied least because I like to research a few of each Trust's holding to get a feel for style etc. I will have another longer look today but may split my investment between two of the larger co. Trusts.
The Pershing Square Holdings (LON:PSH) annual presentation is up on their website. I’d love to be going to the meeting in London today but left it too late to register, doh! Anyway, it is well worth reading. There is a lot going on and they are planning to launch a fund for US investors. What that means for PSH isn’t clear: in the short term, it may reduce fees for PSH. In the longer term, I’m not sure there’s much sense in having a London listed fund and an NYSE listed one. Anyway, Bill Ackmann looks increasingly like the heir to Warren Buffett, and it seems anomalous that PSH is on any sort of discount, let alone one if 25%+.
Pershing Square Holdings (LON:PSH), agree the presentation is well worth a read. Loved the bit where they reference that the 'occasional mispriced probabilistic investments' will "represent a small percentage of fund capital in the aggregate and appropriate "return on invested brain damage"...
Together with Oakley Capital Investments (LON:OCI) this is now my largest holding, and I would be very surprised if it is not my largest holding in a number of years too. Outside of my pension (in worldwide etfs etc) this is my US exposure, backing Bill Ackmann
I hold Pershing Square Holdings (LON:PSH) and intend to buy more but sold all my Oakley Capital Investments (LON:OCI) this week after becoming aware of their investment in Steer Automotive Group. As a 30 year veteran of the automotive industry in the South East, including the oversight of many accident repair centres, I am highly sceptical . Just wished I had not missed the press release on 16th January. I only discovered it after trying to understand the recent drop in share price.
Pershing Square Holdings has performed very well over the years, but I don't like its 16% performance fee, which is in addition to its annual management fee of 1.5%. Perhaps the performance fee is one reason for its 25%+ discount to Net Asset Value.
PKA- The presentation today - I joined online -was interesting. It could be a reason- maybe also since the portfolio is public info easy to replicate ! I did not really understand the new fees structure where PSUS will pay to PSH?
I wonder if the PH-US may one-day be used to take over Pershing Square Holdings (LON:PSH). No idea, and not sure of the rules in SEC of taking this over- they obviously blocked the listing moving.
I doubt Bill Ackman is happy with the discount, despite brushing over it and blaming the poor performance post the float- 2016 as I recall. Probably feels it does not reflect the Trusts talent and performance..
But I have done well from it +35% and will keep as a core hold despite the fees.
I attended the AGM yesterday which was very informative. With regard to fees the PS-US vehicle is designed to reduce the fee level paid by PSH with Bill's stated intention being that the PSH fees eventually fall to roughly zero. That would be a nice outcome.
Thanks Damian, basic question but would the new US fund (PS-US) mirror the PSH holdings?
He mentionedP S-US might buy some-(part) from PSH.
The presentation given at the Pershing Square Holdings (PSH) AGM can be downloaded from PSH's website.
There's also an article about the AGM by Gavin Lumsden on the Citywire Investment Trust Insider website. He thinks PSH's high discount to NAV despite its excellent past performance is caused mainly by the performance fee, which may have deterred many wealth managers from investing in PSH because they find it difficult to justify to their clients.
He wrote that the new US fund, Pershing Square USA (PSUS), would not charge a performance fee and would just have an annual management fee of 2%. Like PSH, PSUS would offer a concentrated portfolio of high conviction, quality growth US stocks, which suggests to me that the two funds will have similar portfolios.
He also wrote that, as a sweetener to shareholders of PSH, the PSH performance fee will be reduced by 20% of the 2% management fee Ackman’s firm earns on PSUS.
Therefore if PSUS raises assets of $10 billion from new subscribers, that would lead to a $40 million fee reduction for PSH shareholders. So if PSH generates 15% gross returns, the fee offset from PSUS would reduce PSH’s performance fee percentage from 16.0% to 13.5%. And if PSH generates 5% gross returns, the fee offset from PSUS would reduce PSH’s performance fee percentage from 16.0% to 6.5%.
It seems to me that if PSUS has a similar portfolio to PSH, it might be better to own shares in PSUS rather than PSH, because the former would have lower costs on average, due to no performance fee being charged to PSUS, whereas PSH would still have an annual management fee of 1.5% plus its residual performance fee.
Personally I hate performance fees.
Broadly speaking yes. US regulations mean that PS-US will have to be more diversified than PSH so it'll have more than 8-12 core holdings but the plan is for them to perform the same. In addition Bill will be able to talk freely about the US fund in the USA (unlike PSH) which should raise the profile of both with American investors. Quite possibly they'll arbitrage the valuation difference between the two entities.
What broker are people using to hold Tritax EuroBox (LON:EBOX) ? Rang Halifax up who told me they won’t allow trading as it’s for institutional investors only…
I used to hold Tritax EuroBox (LON:EBOX) in my HL SIPP - sold out a while back, but never had a problem buying it.
Thanks Kevin
In fact I sold out of Vertu Motors (LON:VTU) this morning and immediately put it to work in Tritax EuroBox (LON:EBOX) Was fed up waiting for the T/O and had got back to about breakeven so thought I'd see out before it became another stock I watched all the way down as my profits disappeared.
Will no doubt announce a T/O in the next week.
Hi TB, I have had the same problem with IWeb (which is Halifax but a lot cheaper) and they will not let you trade it. IWeb have been removing a lot of shares under the "you cannot buy them as a retail investor" label in the last 12 months, they do not even tell you when they have restricted stuff you already hold - you tend to find out when you do not get a dividend reinvestment in my holdings - then they only tell you if you chase them. So I moved half of my mum's money to AJ Bell where I have had none of those issues, haven't had the brain space to think about my own as it has been less of an issue as that is mainly in more mainstream companies, rather than high income. Tommy
Thanks Tommy, appreciate that mate. Am considering whether to make the move to an AJ Bell or a Hargreaves Lansdown at current.
I am looking for some exposure to Japan ( specifically Japan only) and was interested to see the difference in performance of the following, one being Japanese smaller companies. If anyone has any insight into these or general thoughts on Japanese IT's I would be extremely grateful.
https://www.theaic.co.uk/aic/f...
https://www.theaic.co.uk/aic/f...
Helvellyn- I hold Nippon Active Value Fund (LON:NAVF) . With the changes going on in the Japanese stock market- with active investors increasing pushing companies for dividends, take-overs etc rather than just doing what the Directors wanted NAV gives exposure to that.
Other than Trusts you could also look at a Japan ETF- they have performed well- though be wary of currency they are traded in.
Another vote here for Nippon Active Value Fund (LON:NAVF) . One of my larger holdings, and I agree ref the active style.......hopefully it will continue to pay off over the next couple of years.
I read the press saying China was doing reforms to get the Stockmarket and economy going. I will wait to see the reality I think before buying. I am loathe to buy Fidelity China Special Situations (LON:FCSS) as I lost 20% holding onto it too long- though sold above current prices. Other options are abrdn China Investment (LON:ACIC) , Baillie Gifford China Growth Trust (LON:BGCG) or Jpmorgan China Growth & Income (LON:JCGI) . The other option is an ETF such as iShares MSCI China ETF (NMQ:MCHI) .
Does anyone else have a view- I am very uncertain as to what to buy when I feel comfortable with the prospects for China.
My wife holds Gore Street Energy Storage Fund (LON:GSF) so was good to see the Board acted swiftly in response to issues with other storage funds- we increased her holding today, the yield is good and looks like should be maintained. If only all boards responded promptly- whether a Trust or trading company !
The following Trusts have increased their dividends for more than 40 Years. I am currently looking at some shares and funds for her Isa- she is risk adverse but wants income plus some growth.
The AIC has a section called Dividend heroes which lists trusts with more than 10 years dividend increases.
Years Yield NAV Total Return
City of London Investment Trust (LON:CTY) 57 5.09% 31.9%
Bankers Investment Trust (LON:BNKR) 57 2.47% 58 %
Alliance Trust (LON:ATST) 56 2.47% 74.8%
Caledonian Trust (LON:CNN) 56 1.97% 68.5%
Global Smaller Companies Trust (LON:GSCT) 53 1.58% 37.7%
F&C Investment Trust (LON:FCIT) 52 1.38% 70%
Brunner Investment Trust (LON:BUT) 51 1.89% 80.2%
JPmorgan Claverhouse Investment Trust
(LON:JCH) 51 5.23% 27.7%
Murray Income Trust (LON:MUT) 50 4.53% 38.4%
Scottish American Investment (LON:SAIN) 49 2.75% 77.4%
Witan Investment Trust (LON:WTAN) 48 2.46% 43.5%
Merchants Trust (LON:MRCH) 41 5.19% 49.3%
Scottish Mortgage Investment Trust (LON:SMT 41 0.54% 91.4%
Following up Charles Mitchell’s list of dividend heroes here’s the aic link for all the Trusts that have increased their dividends for at least 10 years:-
https://www.theaic.co.uk/incom...
Biggest dividend yields are:-
Henderson Far East Income (LON:HFEL) 11.7% and increased for 16 years.
CQS New City High Yield Fund (LON:NCYF) 9.04% and also increased for 16 years.
Henderson High Income Trust (LON:HHI) 6.55% and 11 years.
I hold Henderson Far East Income (LON:HFEL) and CQS New City High Yield Fund (LON:NCYF) as well as City of London Investment Trust (LON:CTY)
. Henderson Far East Income (LON:HFEL) has been a dire performer but there are now signs of inprovement after change of Manager.
CQS New City High Yield Fund (LON:NCYF) is just for the big quarterly dividrnd as capital gain wil be modest,
City of London Investment Trust (LON:CTY) is THE dividend hero along with Bankers Investment Trust (LON:BNKR) with 57 years of dividend increases, and yield still a useful 5%. Dividend yields from the other 50 year or more increasers are surprisingly modest considering that, BUT it reflects the very big longer term share price gains for those Trusts,
India Capital Growth Fund (LON:IGC) I Hold. The trust has performed well since I purchased it. However it is now at a premium of 2% against an average discount of 6.8% for the last 12 months. They also last week released shares from Treasury- they still hold 29,716,517 in the Treasury. If they continue to issue Treasury stock that could hamper the price increasing. I am contemplating reducing my holding by 50% and buying the underperforming JPMorgan Indian Investment Trust (LON:JII) which is on a discount of just under 17%. The trust has newish managers, has been buying back its shares and there is a continuation vote at the 2024 AGM,If the managers fail to make a performance target a tender offer for 25% of the shares will be made in 2025 . So the Managers have an incentive to perform and if they do not in18 months there could be a tender at around NAV. It is the largest of the Indian focussed Investment Trusts.
JII- I have held off investing for the moment. They have/had a large holding (was 9.1%) of assets in this Life company whose share price has been falling since mid December - from INR707 to currently INR563.
I have asked the managers if they have reduced since the last portfolio announced on 31/12/2023. Whether they will reply we will see.
Thanks for creating these threads Charles, certainly an area of interest for me. Along with your resources for research I also get newsletters from Kepler at trustintelligence.co.uk (I have no connection with the site, just a newsletter subscriber).
Investment Trusts have certainly interested me for a while and I had a bad timing entry to Edinburgh Worldwide Investment Trust (LON:EWI) which I exited after a couple of years.
In yesterday's email update Robbie Burns (Naked Trader) mentioned that after a recent trip to India he has bought into India Capital Growth Fund (LON:IGC) . Does anyone have any thoughts on this IT? I see you list it in the article above. Historic performance has been very notable.
For me, current IT held include:
European Assets Trust (LON:EAT)
Henderson Far East Income (LON:HFEL)
Murray International Trust (LON:MYI)
Polar Capital Technology Trust (LON:PCT)
Twentyfour Select Monthly Income Fund (LON:SMIF)
Smithson Investment Trust (LON:SSON)
I want to devote new funds this calendar year to ITs and ETFs. As well as above I have some interest in Pershing Square Holdings (LON:PSH) and Lindsell Train Investment Trust (LON:LTI) although I don't want to diverse my holdings too much.
Discounts on investment trusts are very appealing then again I guess they can be out of favour for a long time.
Wildshot- I forgot Kepler, though it is paid for research. I used to visit but spent every time re-signing up-or so it seemed, to view research.
India Capital Growth is a core holding of mine. Good communication from them, they answer email queries quickly and directly- for example they have slightly underperformed the index recently (last couple of months)-and explained they were out of one sector of the market that local private investors had been buying aggressively. They also avoid companies with Government majority holdings. Apart from the fund management, India is doing well economically with wealth filtering into sectors of the population- albeit there are still significant social and poverty issues. Politics is a concern, but I am no expert on Indian politics so have factored that out for now. They are closer to Russia than I would ideally like so that is a potential factor if further military activity takes place by Russia.
The market always looks a little pricey on a P/E basis, but the economic growth in my opinion justifies that.
You could look at Ashoka India Equity Investment Trust (LON:AIE) performed well, but I am very happy with IGC.
The fall from grace of China is providing opportunities for India, Vietnam ( see VietNam Holding (LON:VNH) (I hold) and VinaCapital Vietnam Opportunity Fund (LON:VOF) (I do not hold) and Thailand ( no Trust). Friendshoring by the West is helping these countries as near shoring is helping Mexico and Latin America.
Enjoy dipping into this conversation on Investment Trusts, so thanks for keeping it active.
An interesting situation is happening at Real Estate Investors (LON:RLE) which I hold.
They have announced that they are looking to sell assets over the next three years to maximise a return to shareholders. They are currently trading on a discount of 50% to their assets. Harwood Capital have a 9% holding.
I'm also looking to top up my holdings in REITS, to pick up the big discounts and yields, before interest rates start to fall. I currently hold : Supermarket Income REIT (LON:SUPR) Tritax EuroBox (LON:EBOX) TR Property Investment Trust (LON:TRY) UK Commercial Property REIT (LON:UKCM) Balanced Commercial Property Trust (LON:BCPT)
There are good buys in REITS- and Property companies- I hold Palace Capital (LON:PCA) amongst others- wish the proposals would be announced- PCA have confirmed in an email reply to me not later than end March. Trades a good discount to NAV- but not a REIT so a bit of this thread.
Pershing Square Holdings (LON:PSH) ( I hold) Lasted monthly report https://pershingsquareholdings...
This fund has a limited number of holdings- 10-12- so a high conviction play- or trust the Manager ! Has performed well for me over the last 12 months.
"Pershing Square Holdings, Ltd. (“PSH”, or the “Company”) (LN:PSH) (LN:PSHD) (NA:PSH) is an investment holding company structured as a closed-ended fund principally engaged in the business of acquiring and holding significant (but generally not controlling) positions in a concentrated number of large capitalization companies. PSH’s objective is to maximize its long-term compound annual rate of growth in intrinsic value per share."
The number of holdings has dropped from 11 to 10. On the last conf call Bill seemed lukewarm on Lowe's Companies (NYQ:LOW) so that may have been binned
I am attending the next presentation- though signing up did involve proving I had a holding. Nearly sold in a fit of pique -glad I did not!
Are you, or anyone else, going to Pershing's AGM on Thursday? There were a few hoops to jump through to get my ticket but it feels like a good way to get a better feel for the trust.
Hi Damian, I left it too late to apply, doh! Would have been good to meet up. I expect a full report.
Are Gresham House Energy Storage Fund (LON:GRID) planning to buy back 14.9%- the announcement to-day and yesterday is unclear- or I missed the amount stated "
"Share buybacks under the Share Buyback Programme will be made pursuant to the authority granted to the Company at its general meeting held on 30 May 2023 which limits purchases of shares by the Company in the market to up to 14.99% of the Company's then issued share capital."
Tritax EuroBox (LON:EBOX) Charles I think you hold. I see it’s retraced a good part of the spike prompted by hopes of interest rate cuts. Do you see this as anything more than disappointment that rate cuts are probably a little further out than earlier anticipated? The shares turned down before the latest view on rates took hold, so could there be something else concerning investors? Discount to NAV/NTAV is good - even after asset price negative adjustments. But LTV is 44% in the latest report. Looks a little high. What are your thoughts - or those of other investors?
BnB- I assume interest rates not changing for the moment. The market has become very short term. and I tend to hold unless a convincing reason to sell. I never really get the obsession with interest rates-I grew up in an era when 8/9% was standard and at one stage in the late 80's my mortgage rate was 19% !! that was painful.It would seem to me most businesses are still trading OK worldwide. When I worked in the City markets tended to be 9-12 months ahead of what was happening. Or else they still are and we are looking at major issues ahead.
I have held Tritax Big Box REIT (LON:BBOX) for years an and am relaxed. EBOX is on my buying list- just need to get some funds into the ISA !
BnB.
fwiw I’m confident that the key reason for the renewed Tritax EuroBox (LON:EBOX) share price fall is the likely delay in interest rate cuts. For EBOX do investors take in to account that the focus of their investments is Europe so it’s European Central Bank interest rate decisions to keep an eye on too?
I’m surprised at the size of the recent 15% one month share price fall back to 51p. That looks a stunning bargain price again and the dividend at this price is 8.5%. But I had thought 60p was about as low as the share price would go and was stunned to se it drop to 45p before a (we now know temporary) quick bounce in to the 60s as expectations of early interest cuts. Those hopes have faded for now and hence the renewed sector share price falls with EBOX about the biggest. I don’t take charts too seriously but those who do might hope for a double bottom around 45p.
So there’s a strong case for buying at least a part stake now in case 51p is the bottom this time and save a bit in case there’s another chance to buy at extreme bargain price around 45p again and lock in a then 9% dividend paid quarterly. Can’t stress the attractions of those dividends enough. They now provide the funds for new IT buys.
It’s worth mentioning that though ADVFN bbs are often full of idiot posters one of the exceptions are the excellent threads over there on all the REITS, both under the individual REIT headings and also the catch all “The Commercial Property thread.” Over there, as here, some of the posters have City Experience including Investment Trust Management.
Here’s the link for EBOX.
https://uk.advfn.com/cmn/fbb/t...
Also for anyone tempted by Tritax EuroBox (LON:EBOX) be aware that there is an alternative Tritax EuroBox (LON:BOXE) that is traded in Euros. Some brokers including ii don’t allow online buys in EBOX because of some niggling complication about the wretched KID documents it seems. BUT they do trades by phone on Tritax EuroBox (LON:EBOX) at online rates.
Again fwiw I’m very happy with all my REIT holdings, collecting the big often coveted dividends and some even increasing their dividends while waiting for the sector to turn up again as it surely will when interest rate cuts become likely. The gains will almost certainly start, as they did this time before those hopes were dashed, before the first actual cut.
That 44% LTV is too high but disposals have already reduced it from 46%. I hope they take further steps via small disposals to get it below 40%.
Thank you Ken and Charles for extremely helpful responses.
Utilico Emerging Markets Trust (LON:UEM) Manager Jacqueline Broers discusses the Megatrends of Global Trade across Emerging Markets https://youtu.be/W1b8chmMIXc .
Don’t have much to add but enjoying reading the posts!
The AIC have just released their Corporate Activity download for Jan 2024. A lot of it blocklistings, but some other activity. https://www.theaic.co.uk/aic/s...
Harbourvest Global Private Equity (LON:HVPE) have announced a plan to create a pool of cash to be used to increase shareholder returns via either buybacks or dividends. It's a relatively small step but a significant one. Over 10 years they have been one of the better performers in the listed PE sector, behind 3i (LON:III) and HgCapital Trust (LON:HGT) but ahead of Oakley Capital Investments (LON:OCI) and their closest peers in the global space Pantheon International (LON:PIN) and NB Private Equity Partners (LON:NBPE)
However, over 5 years the picture is quite different, and over 1 year, HVPE has lagged PIN by 12%, largely after PIN announced an ambitious model to return cash to shareholders.
HVPE is massively diversified (around 1700 underlying investments) and sits at a 40% discount to NAV. Historically, NAV has itself been very conservative: in the golden period of 2021/2 disposals were at an average of a 50% premium to NAV.
So there looks to be lots of value here and perhaps today's news will start to realise some of it. It's a first step anyway.
Hardman produced a fairly well researched video on the subject of whether REITs were currently cheap. The conclusion was a little cheaper than average but not outrageously cheap.
Worth watching. Comments welcome from specialist REIT investors on this forum
https://hardmanandco.com/hardm...
intuitive6191
I watched the Hardman video and thought it as good as useless. Just a load of waffly generalisations and with no useful info on any of the Commercial Property REITS either.
Some of the REITS are fully valued and others on very wide discounts,yet paying covered and sometimes growing dividends, are looking far too cheap. I and others have covered these in previous posts. I hold Tritax EuroBox (LON:EBOX) Aew UK Reit (LON:AEWU) Alternative Income REIT (LON:AIRE) Schroder Real Estate Investment Trust (LON:SREI) Schroder European Real Estate Investment Trust (LON:SERE) and Supermarket Income REIT (LON:SUPR.
Of those Aew UK Reit (LON:AEWU) has been the best performer and with dividends (13% a year at my lucky 2020 buy price) has doubled since I bought. But it’s on the smallest discount now so the others might tempt more.
Arguably it’s not wise to hold several in the same sector as they all tend to rise and fall together so we maximise the falls if our confidence is proved incorrect. BUT the dividend yields are so big that I see these as a small separate income portfolio yielding around 8% for most of these if buying now. 8% annualised is good in itself.
In time the share prices should recover too. That’s likely to happen when interest rates come down, or ahead of that when that first cut looks likely. For now many of the REITS could well just bump along around current prices, and only go up or down significantly if any issue better than expected or worse than news updates.
Re Hardman
Thanks for the response Ken. I think that Hardman was giving an overview of the sector which is probably all that could be achieved in a short video.
Your detailed response helps. The diversity of the companies operating under the title of a REIT is quite interesting and I would agree that a sector analysis/video has its limits.
To start the new month Gresham House Energy Storage Fund (LON:GRID) looks very cheap- as mentioned on Jan 31st SCVR by Whitbourne. The stock has fallen 40% over January and yields 11.7%. Looks one to research unless anyone else knows what the issue is ? No news announcement from the company. The last note I had was in Feb 2023
" Gresham House Energy Storage Fund (GRID) invests in utility-scale battery energy storage systems (BESS) in Great Britain and Ireland. The company seeks to capitalise on the growing intraday imbalances in electricity supply and demand caused by the UK and Ireland’s ever-increasing reliance on renewable energy, by accessing multiple revenue sources available in the power market. GRID targets an NAV total return of 8.0% + per annum and it has significantly overshot this target since its inception in November 2018, having delivered an NAV total return of 84.1% and a share price total return of 100.5%, compared to an 11.8% rise in the broad UK market in the period to end-September 2022. Further NAV uplifts are expected in 2023 and 2024 as the fund’s pipeline of projects is commissioned and revalued accordingly. And manager Ben Guest has plans for further rapid expansion of the fund’s operational capacity, including in Europe, the US, Canada and Australia, over the longer term. GRID pays an attractive dividend, which is set to rise in line with revenues."
there is a TU this morning from Gresham House Energy Storage Fund (LON:GRID) :
https://www.stockopedia.com/sh...
In short:
"Meanwhile, the Board and Manager are determined to take a proactive and disciplined approach to capital allocation, focusing on i) capex, ii) dividend policy, iii) share buybacks and iv) the Company's debt facility.
i) Capex - In 2024, the Company intends to solely focus on completion of its 2023 pipeline projects comprising of a further 332MW, all of which are constructed and awaiting completion of grid connection related works, together with the duration extensions already committed to, given the potential for this to meaningfully increase the earnings capacity of the portfolio. A significant amount of this capex is expected to be financed by cash on hand (which stood at in excess of £40 million as at 31 December 2023).
ii) Dividend policy - Given the recent difficult revenue environment, the Board has decided not to declare a dividend for Q4 2023. In terms of the dividend for 2024, if the current revenue environment endures, it will be challenging to generate the cash required to cover the dividend this year. As such, the Board intends to recalibrate the Company's dividend target for 2024, as well as the Dividend policy on an ongoing basis to better reflect the predominantly merchant nature of the Company's revenues. A further announcement in this regard will be made as soon as possible and not later than the announcement of our Annual Results.
iii) Share buybacks - Noting the recent sharp decline in the Company's share price, the Board confirms its intention to commence a share buyback programme. Initial buybacks are not expected to exceed any reduction in the dividend. Further details will be announced in due course.
iv) Debt facility - The Company also intends to enter into discussions with its lenders to seek certain amendments to optimise its debt facility. This may include a reduction in the size of the facility, to reduce the overall cost of funding given the whole of this debt facility may not be required. As of 31 December 2023, £110 million (also £110 million as at June 2023) was drawn under the £335 million debt facility."
Thanks Welwicha- Trust sounds in a mess.
>> Trust sounds in a mess
Very much so sadly. Personally, for me some hard lessons that had to be (re)learned about "bond proxies" and "reaching for yield".
Definitely agree with that thought. I have 22 holdings in Investment Trusts split:
ACounsell.
This reply might backfire and see strong criticism but I’ll risk that.
My reaction to your post was how refreshing to see a poster open about failings rather than the more usual only posting about our successes. But I also thought it wasn’t a good advert for Investment Trust investing.
Your sometimes big losses partly reflects bad timing but for others isn’t it holding on to Trusts once it was clear they were going wrong? e.g I also held Digital 9 Infrastructure (LON:DGI9) as a risky punt but cut the loss at 44p on a very poor update. It is now only 24p. Holding on to Trusts and shares that issue profits warning or other bad news risks worsening losses. And as with our share holdings isn’t it better to cut losers where updates disappoint rather than hold on hoping for eventual recovery? As with shares too I much prefer taking quick modest loss and look to use the proceeds for much better alternatives than hoping the Trust share price might eventually recover. Also DG19 needs to nearly double just to get back to the 44p when I cut the loss.
I don’t agree with Investment Trust investing being a long game. Some Trusts and sectors might justify that view (e.g the current bombed out REITS sector where big dividends arguably justify holding on) but my aim when buying Trusts is to time the buys well and anticipate quick gains too.
The only Trusts I hold that are down more than 5% are Henderson Far East Income (LON:HFEL) where I’m down 18% excluding dividends but holding on in the hope of recovery and that current big 11% dividend being held and Tritax EuroBox (LON:EBOX) (I’m down 18%) looks oversold on huge discount to NAV and VPC Specialty Lending Investments (LON:VSL) down a too big 27% and where it could take ages for winding down this Trust to justify holding. So I’ll cut the loss as soon as needing funds for a better choice.
Those losers are compensated by well timed buys for Blackrock Energy and Resources Income Trust (LON:BERI) up 128% (again excluding dividends) BlackRock World Mining Trust (LON:BRWM) up160% and CQS Natural Resources Growth and Income (LON:CYN) up 196%, and others I hold currently up more than 50% include Oakley Capital Investments (LON:OCI) up 51% and VietNam Holding (LON:VNH) up 57%. That VinaCapital Vietnam Opportunity Fund (LON:VOF) gsin is really much higher as I’ve held for most of this Century and only sold temporarily during covid crash. It’s been a fab winner and very good chance that will continue for both VOF and VietNam Holding (LON:VNH)
Trying to time our buys well is crucial imo. My preference is after big falls and at big discounts to NAV and where the worst for the sector looks over. Buying after a Trust has done well and even perhaps near record highs works sometimes too in bull markets but it’s not for me as the best of the gains have been had more often than not, and the risk is buying at or near the peak.
When to sell an in a downturn?
KM & AC: To cut losses on an IT holding is a really good question. I have a golden rule with individual shares to cut if they fall 10% (conservative risk) or up to 20% speculative. So far I’ve adopted this policy on IT’s which got me out of Gresham House Energy Storage Fund (LON:GRID) Foresight Solar Fund (LON:FSFL) etc in a timely manner. I’m still down since my ATH in Nov 2021 but only by about 9% which I can live with. I have a mantra ‘ the trend is your friend’ that made me buy into Pershing Square Holdings (LON:PSH) & 3i (LON:III) in December - its hard buying at ATH’s but they are both showing 10% + in only 6 weeks. Despite my handle, I try not trade too much & plan to add to both of these if they drop below 50 MDA as I think they are both exceedingly well managed IT’s & one has to accept that volatility is the price one pays to hold equities.
Finally my best idea in terms of risk / reward is currently Future of Defence UCITS ETF USD Acc (LON:NATP) - a great looking chart, but I get that some folk find defence investing a no-no.
TJ
Due to the negative sentiment on renewables & worries about a read across from GRID etc I have sold all my Renewables Infrastructure (LON:TRIG) today and may add short term to Twentyfour Select Monthly Income Fund (LON:SMIF) which seems a stable income fund short term, with further upside when interest rates come down. Also added to Supermarket Income REIT (LON:SUPR) today…
Re selling. If selling a share on 10% (or whatever) fall and an Investment Trust on a 20% (or whatever) fall, works for that person, then do it. Whatever works for us, do it!
But using Tritax EuroBox (LON:EBOX) and VPC Specialty Lending Investments (LON:VSL) as two examples in my portfolio, here’s why I much prefer to sell for investment reasons.
I’m now down 19% on EBOX having bought at what I wrongly thought was a rock bottom price. I won’t be selling if the share falls further becsuse a key reason for the renewed share price fall is the likelihood of interest rate cuts bring delayed. We know that not long ago EBOX recovered from 45p to over 60p quickly on expectations of early interest rate cut. When it became clear that was not going to be as soon as the market had expected so EBOX fell heavily again and is now almost back to the previous 45p low.
Why sell on a slight further share price fall when we’ve had such clear evidence the share price is likely to go up again as soon as interest rate cuts looks to be coming? And there’s that big dividend to collect while we wait. So I think the Invrstment decision is continue to hold or even add.
VPC Specialty Lending Investments (LON:VSL) is different. I’m down 27% and should already have sold. This Trust is being liquidated but it has become increasingly clear that it could take years. Discount is around 30% but there’s no guarantee that disposals will be at NAV. So share price upside is limited and likely to be slow. So the decision (again for investment reasons) is sell. There’s a big dividend to mitigate the share price falls but even taking that in to account the best outcome won’t be much better than break even with dividends included. I want that cash to go in to a much better Investment Trust alternative.
There have been so many examples over the years where my selling on arbitrary stop loss figure would have proved a mistake. Obviously if our reasoning about a Trust is wrong then not selling on an arbitrary stop loss will have been a mistake. But fwiw I’m confident my reasoning on Tritax EuroBox (LON:EBOX) and VPC Specialty Lending Investments (LON:VSL) has a high chance of being correct. If we are not confident about our reasoning then the case for arbitrary stop loss selling makes sense.
Green Energy. I have been looking at this for some time now and today's announcement from LON:GRID rather confirms my suspicions. It seems that the Government is manipulating the balancing mechanism of LON:NG. in favour of BIG OIL and against the interests of renewables in general. This is entirely in line with its recently announced decisions on Oil Exploration and their determination to drain every last litre from underneath the North Sea. ( I do wish that Stockopedia would allow UK spelling which would stop red lines appearing under several words in my posts). Two years ago I sold all my investments in renewable production and storage, and will not go back in until after the next election.
Forgot to say in my earlier post that another political factor is at play. Oil & Gas do not use the National Grid. To put it simply even at present levels the NG is full to capacity and to cater for the changes to come it needs a massive injection of capital or we will all ( Except those of us who are lucky enough to have our own generation and storage facilities) be suffering power outages. Given an adequate infrastructure, electricity could be nearly half the price it is now. The price is being held artificially high because it is linked to the price of gas. Sorry but politics is everywhere
Also it seems to me that so much around the renewables is dependent upon (1) Government subsidies, (2) regulations to restrict competitor products (even blowing up coal power stations!), (3) arbitrarty definitions, eg CO2 is a pollutant or burning wood is good for the environment. I can't predict the future, but I can predict that there will be many more political twists and turns on the 'renewable' story.
"It seems that the Government is manipulating the balancing mechanism of LON:NG. in favour of BIG OIL and against the interests of renewables in general."
I work as a consultant in the electricity industry and I don't agree with the above statement. I believe that the government would very much like to increase the amount of renewables in the UK, as part of its drive towards 'Net Zero', and it is not manipulating the electricity Balancing Mechanism in favour of 'big oil'. I think the current issues with the renewable energy investment trusts are for other reasons, such as the increase in interest rates, although there is scope for future changes to the rules of the Balancing Mechanism in order to better cater for the increasing amount of renewables and batteries in the British power system.
First, many thanks to Charles for the great way and with very useful links too, you set up this latest IT thread up.
It was unfortunate timing with the news today from Gresham House Energy Storage Fund (LON:GRID.
I’ve been wary of the Renewables sector for a while. Avoided it when most were at a premium, then got tempted when those premiums became big discounts, but then had second thoughts except for Foresight Solar Fund (LON:FSFL) which I still hold for now.
So much has to be taken on trust with these Renewables Trusts.e.g look at their portfolios and this one (link below this paragraph) from Foresight Solar Fund (LON:FSFL). It’s impossible to check how they are doing with over 90% lumped together too. I much prefer sectors and Regions where it’s clear what investments they hold, as is the case with all mainstream sectors, and where the portfolio holdings including the important top 10 are clear to see and value. AND many of those Trusts update NAV every day too. And for anyone new to Investment Trust investing it’s surely best to stick mostly to the mainstream sectors like the 5 I highlighted on the previous Investment Trust thread yesterday evening.
https://www.theaic.co.uk/compa...