Investment Trust- Thoughts (January 2025)

1st Jan by Charles Mitchell

179 comments 6634 reads

Investment Trust- Thoughts (January 2025)

Links to older monthly thoughts-reader request.

December. November October September August

July June May April March February

Investment trusts realising assets spreadsheet

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.

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.

December 2024 Investment Trust monthly performance.

Top 10 (Equity only)

Schiehallion Fund (LON:MNTN) +14.6%

Majedie Investments (LON:MAJE) +12.8%

Onward Opportunities (LON:ONWD) +12.7%

Chrysalis Investments (LON:CHRY) +12.1%

CT UK High Income Trust (LON:CHIB) +11.5%

Lindsell Train Investment Trust (LON:LTI) +10.8%

Augmentum Fintech (LON:AUGM) +9.6%

Marwyn Value Investors (LON:MVIR) +7.3%

VinaCapital Vietnam Opportunity Fund (LON:VOF) +7.2%

Hansa Investment (LON:HAN) +6.6%

Bottom 10 (Equity only)

Biotech Growth Trust (LON:BIOG) -11.4%

Middlefield Canadian Income PCC (LON:MCT) -10.8%

Downing Strategic Micro-Cap Investment Trust (LON:DSM) -10.5%

Ecofin Global Utilities and Infrastructure Trust (LON:EGL) -9.1%

JPmorgan US Smaller Companies Investment Trust (LON:JUSC) -8.1%

Brown Advisory Us Smaller Companies (LON:BASC) -7.9%

Weiss Korea Opportunity Fund (LON:WKOF) -7.5%

Sure Ventures (LON:SURE) -6.3%

Polar Capital Global Healthcare Trust (LON:PCGH) -6.02%

Worldwide Healthcare Trust (LON:WWH) -5.3%

Top 5 (all Trusts

Alpha Real Trust (LON:ARTL) +57.1%

Menhaden Resource Efficiency (LON:MHN) +27.2%

Harmony Energy Income…

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Charles Mitchell

31st Jan

Henderson Far East Income (LON:HFEL) From the AGM-Sat Duhra, fund manager of HFEL, discussed performance over the last financial year, changes to the portfolio, and provided an outlook for the Trust.

https://www.janushenderson.com...

sevenccc

Hey Ken

I hold most of the Commercial Property REITS you cover here/in your last post on the sector. I've been counting on Interest Rates coming down over the next 12 months leading to growth in Sp/narrowing of discounts here. However I'm starting to question if this is likely to play out. Why? Whilst BoE may set short term rates there seems to be a growing consensus that it's the markets that set the mid and long term rates. And they are not looking like coming down significantly, certainly not until we know what the clever crew in the White House will actually do on a number of major issues - Ukraine, Tariffs, Greenland, etc..

Happy to hold for the continuing divis as part of my SIPP but not optimistic on more than short term sp increase with rising NAVs

European Assets Trust (LON:EAT) Janus Henderson has bought nearly 5% of the European Smaller Companies Trust (ESCT) that it manages ahead of a crunch vote on the fund’s future next week. https://citywire.com/investmen...

Not sure what to make of a management group buying shares to try and keep the management fees. Rather hope SABA win in this case, though with Lazard and City of London I assume will vote to support current managers.

This sort of behaviour does not endear me to Janus Henderson. If it was such a good investment (sic!) why wait to now.

Bouden54

I'd say the DGI9 fiasco has already seriously managed the IT sector, at least the alternatives sub-sector. There's pretty much zero chance of any new listings taking place here for the foreseeable future and wide discounts are likely to persist for many years - who an earth would anyone invest in a new fund launch if this sort of thing can happen? I would like to see a proper investigation to ensure those responsible are held to account and potentially even prosecuted.

timarr

I just posted this on the DSMR, where Graham was discussing Tritax Big Box REIT (LON:BBOX) today:

RE: Tritax Big Box REIT (LON:BBOX)

I've ended up as an unwitting shareholder in BBOX after the UKCM takeover last year. But there didn't (and doesn't) seem to be any reason to dislike them so I kept the stock in the vague hope that something interesting would happen.

And lo, something of mild interest has occured (at least to me, it seems to be very interesting to the board): a recent announcement of a large data centre development at Heathrow that effectively short circuits the grid connection problem that's delaying many similar developments:

https://www.stockopedia.com/sh...

They obviously believe that the prime location will be of particular interest to high value clients (well, the hyperscalers, so AI by any other name). With the government's urgent focus on growth it's hard to see the planning on this being rejected - especially as data centres like this have now been designated as critical national infrastructure.

It looks like it will go live in 2027 but it's going to cost BBOX a cool £365 million to develop - although that ought to be manageable, it's about 10% of current market cap.

There's no point in trying to compare this to the US data centre (sorry, center) REITs but for amusement it's worth noting:

Digital Realty Trust (NYQ:DLR) is trading at 2.56 times book value; and
Equinix (NSQ:EQIX) at over 6 times book value.

I haven't spent much time looking at this, so it's not clear to me what the potential value would be, although the company gushes about the "exceptional returns" on offer. Behind the initial development, with an unnamed low carbon energy company, is a pipeline of similar opportunities across the UK.

I've seen too many "transformational" programs (usually code for "we're going to spend a lot of shareholders' money to satisfy the ego of the CEO") to get overly excited about this, but I do approve of the ambition, it looks like a thoroughly sensible development. And it's a lot more interesting than leasing warehouses!

EDIT: I would be utterly unsurprised to see a rush of IT's being brought to market to capitalise on a data centre boom - most of which will go the same way as all such overhyped nonsense. But by getting in early with potential fast(ish) deployment, and with existing infrastructure in place to support the plans, I think Tritax Big Box REIT (LON:BBOX) have a decent chance of making this work. What it means financially, though, is guesswork - there must be a fair chance of delays and cost overruns, and no doubt the initial wave of AI enthusiasm will fade when it doesn't deliver the returns expected / kills everyone (*).

(*) delete as applicable.

ACounsell

Not sure about the 'rush of ITs being brought to market to capitalise on a data centre boom'. The Digital 9 Infrastructure (LON:DGI9) IPO hasn't turned out well and Verne Global, a data centre operator (Iceland, Finland and others), was the first asset to be sold in their so called (!) managed wind down. The price achieved wasn't particularly high (vs. valuation) but if there is a surge in data centre demand maybe the purchasers have got a good deal and Digital 9 Infrastructure (LON:DGI9) will get the contracted 'earn out' of £109m!

Sadly I don't think Digital 9 Infrastructure (LON:DGI9) is a representative example of anything other than the destructive effects of terrible management running a fire sale.

Couldn't agree more, there is definitely a need for a proper investigation but not confident it will happen. As regards recent IT fiascos we could also add Asian Energy Impact Trust (LON:AEIP^F24) (previously Thomas Lloyd Energy Trust) to the list of recent catastrophic Investment Trust IPO failures. That is now in liquidation despite one of the board directors being Sue Inglis, who is well known in the IT world. Coincidentally she has been very vocal on behalf of Baillie Gifford Us Growth Trust (LON:USA) as the senior independent director the campaign to prevent Saba Capital seizing control of the Baillie Gifford vehicle. Hopefully she will be successful in that endeavour rather than the failed efforts to return anything significant to the shareholders in the Asian Energy Impact Trust (LON:AEIP^F24) saga.

I have emailed the Board just now suggesting they either put out a statement stating no further issues or confirm what the share price is saying. If the share price is wrong one wonders why the new "expert" fund mangers are not piling in buying shares. I do not want to live in the USA but fleetingly thought of it so a shareholder legal action could be undertaken !

I remain a holder- the pain is doing me good, a salutary lesson.

Me too Charles!

A reasonable assessment I guess!

I have bought JPMorgan European Growth & Income (LON:JEGI) today for my wife's Isa account- a growth and income strategy rather than my slightly riskier investment profile.

ShoeShineBoy

1st Feb

Thanks for your recent posts Ken, enjoyed reading them. And likewise a number of other posters. I've been quiet recently but still enjoy reading this site very much.

Fwiw, I bought Supermarket Income REIT (LON:SUPR) on Wednesday and also added to Lloyds Banking (LON:LLPC), both for yield.

Supermarket Income REIT (LON:SUPR) has a loan to value ratio of 37% which should be very manageable (the last results mention a new 100m loan at 1.55% over SONIA (currently 4.70%) and pays a dividend of +8% which appears to be covered. Stock Report quotes a current price to book value of 0.75. Looking back to Jan-20 (ie: pre-Covid / Ukraine / BoE interest rate hikes), the PtB value was 1.61!!!

https://tinyurl.com/yup6nf5h

Lloyds Banking (LON:LLPC) is a preference share which the HL site constantly mis-quotes the dividend yield on. The correct yield is around 6.5%. The spread is wide at 2.5% but it's been a pretty steady share.

https://tinyurl.com/snstdke2

I'm not that fussed about capital growth on either, just so long as the valuations stay steady and the dividends are paid. I was going to buy a small holding in Polar Capital Technology Trust (LON:PCT) or Scottish Mortgage Investment Trust (LON:SMT) but for some reason (probably my aversion to paying high valuations) decided not to. Given the price movement on both in the last 3 days this was a poor decision. I really need to start thinking more about longer term capital growth and less about dividends (although my dividends were +15% higher in 2024 compared with 2023 so making slow but steady progress).

Ken, another trust you mentioned in your post is Tritax Big Box REIT (LON:BBOX) who reported this last week. I don't hold but operating results read well plus disposing of assets, some of them from the UKCM acquisition last year at above book value. The mgt team is very experienced. According to the StockReport, Tritax Big Box REIT (LON:BBOX) offers a 5.5% yield for a price that is at an 18% discount to book value. It's a much larger mkt cap to Schroder Real Estate Investment Trust (LON:SREI) and I could be tempted to switch. timarr seems a happy holder now. Thoughts welcome from anyone reading this.

https://tinyurl.com/mz7x8ty8

I liked the following article on CityWire. Most people reading and posting here will get these free emails but worth highlighting anyway. Again, this backs up my point above about longer term capital growth even if tech and India are a touch expensive. I just need to buy small amounts and see what happens.

https://tinyurl.com/2jvm472s

And I liked the latest IC podcast with John Lee. JL reports he was +13% up in calendar year 2024 and his portfolio is currently on a yield of +4%. Supermarket Income REIT (LON:SUPR) got a mention as a relatively new holding. Well worth listening to.

https://tinyurl.com/4vfk8wc8

Craig Martin of VietNam Holding (LON:VNH) is interviewed on the UK Investor Magazine podcast. I got to say, he seems to do the rounds of the podcasts on a pretty regular basis. Listen from 7 minutes: CM talks about VietNam Holding (LON:VNH) trading on a premium versus the other Vietnam trusts which currently trade on a discount. He attributes the premium rating to the introduction of the recent redemption facility at VietNam Holding (LON:VNH). But for me, he makes no mention of the lack of private equity holdings versus the other trusts! Odd in my view. On 14 minutes, CM talks about the Vietnam stock exchange maybe being upgraded from Frontier Market to Emerging Market, maybe in March but more likely in September.

https://tinyurl.com/38aa76cm

Happy to see one of the Tesco (LON:TSCO) directors buy this last week. Tesco (LON:TSCO) is still one of my largest equity holdings and I have almost doubled my money on what I thought was the most boring buy ever back in 2021! In fact I only bought because I wanted a reasonably safe yield when BoE interest rates were on the floor.

SSB

ken mitchell

2nd Feb

Enjoyed reading your post as always ShoeShineBoy.

Hopefully Supermarket Income REIT (LON:SUPR) will prove to be a very well timed buy. Ditto other Commercial Property REIT bargains too if readers of these threads go for any of them.

Like you I don’t hold Tritax Big Box REIT (LON:BBOX) but that’s only because the dividend is lower than for the REITs I hold. Rather than decide which of Schroder European Real Estate Investment Trust (LON:SERE) or Tritax Big Box REIT (LON:BBOX) to hold, there’s a case for investors to hold both of them. Don’t rule out further sector consolidation this year with Schroder European Real Estate Investment Trust (LON:SERE) a possible target with the discount so wide.

Like you I enjoyed the I/C podcast with John Lee and hearing his case for Supermarket Income REIT (LON:SUPR) which is basically the same as has been posted on the Investment Trust threads here.

As for Vietnam……there’s a VERY interesting article in the Sunday Times today explaining how the seeming huge increase in Countries moving their production to Vietnam for fear of Trump China tariffs is often Chinese firms themselves moving production to Vietnam to escape the tariffs. A fear I’ve got is that Trump will have to be wary of overdoing Chinese tariffs but he doesn’t need to be with Vietnam.

As for the promotion of Vietnam to full Emerging Market status quite soon; not sure it will be soon but high chance later this year. That if it happens could give both VinaCapital Vietnam Opportunity Fund (LON:VOF) and VietNam Holding (LON:VNH) and also Vietnam Enterprise Investments (LON:VEIL) a big boost as many more foreign investors and Funds will be able to invest there. Here’s that Times article.

https://www.thetimes.com/busin...

As for the continuing big discount for VinaCapital Vietnam Opportunity Fund (LON:VOF) and no discount for VietNam Holding (LON:VNH) …..if it’s really because VOF includes private equity and non quoted holdings and VNH don’t, why then did they both trade at similar big discounts in the past? I’m a stuck record on this but if/when Vietnam gets full Emerging Matkets status, aren’t potential big buyers going to be more tempted by the one on a big discount? I’ll continue to hold both VinaCapital Vietnam Opportunity Fund (LON:VOF) and VietNam Holding (LON:VNH).

Hope your shares like Tesco (LON:TSCO) and Lloyds Banking (LON:LLOY) prove good buys …….and do keep your posts coming whenever you get a bit of spare time!

yadi

3i and Action

3i is an enigma for me. bought years ago and have been selling regularly while each time the share price goes higher. The 40% premium worries me more than the bet on a single stock.

Having read the comprehensive review that Charles has written , I think I am going to sell the rest soon.

Yadi, it was research using Gemini AI. But i just cannot get the valuation of either Action or the premium for III.

Apologies to Charles for continuing to respond on the January thread but there were some interesting posts that I wanted to follow up on!

Thanks to both Andy Howe and pka for the gilt links. I have saved down both as favourites. And the 'dirty price' is not a term I have come across before so my education continues.

TN25 matured on Friday and the cash is sitting in my stocks and shares ISA. I'm looking to re-invest ASAP (new years resolution: try to be 100% invested now inflation is higher) and T26 seems the obvious choice but 3.67% return is a little disappointing. On the positive side, I will get a return of sorts and the gilt market is liquid so if I want my cash back to buy a bargain in the equities market then I can do that. On the negative side, it's not very aspirational!

One question for Andy or pka or anyone else on the trust board (I think number33 has answered this in the past): what is the point of the column headed '40% Gross' ? Surely this is only applicable in situations where the gilt is being held outside of an ISA ?

https://tinyurl.com/432bbcn8

Thanks in advance for any relevant responses.

SSB

Hi Ken,

thanks for reverting. You mind me asking if you hold CQS New City High Yield Fund (LON:NCYF) ? I seem to recall you mentioning this in the past. It's an option to maybe get a higher yield.

I listened to the following earlier today and it mentioned a ton of money still in money market funds, potentially waiting to be invested elsewhere. From a personal perspective, I'm keen not to have any spare cash in my account. When inflation and interest rates were low (pre-Covid), it wasn't a big deal to have some spare cash. But now, with inflation higher, it doesn't feel like good money management to have spare cash sitting around doing nothing.

https://tinyurl.com/uhzpx7nf

Final word on Tesco (LON:TSCO) from me! I'm not sure many other investors can get excited about a supermarket. I thought this week's IC podcast was good in terms of explaining the growth of store cards in general and the success of the ClubCard (listen from 13 to 28 mins).

https://tinyurl.com/ywafdefy

Tim Boucher

Hi SSB,

"what is the point of the column headed '40% Gross' ? Surely this is only applicable in situations where the gilt is being held outside of an ISA ?"

Yes, the 40% gross column contains the equivalent % rate that you would have to find to achieve the Net 40% interest rate (if you were paying 40% on the divis, which are taxable income) - only relevant if held outside an ISA/SIPP.

However the numbers demonstrate how tax efficient the low coupon gilts are for storing cash outside a tax wrapper.

3rd Feb

Hi ShoeShineBoy

Yes I hold CQS New City High Yield Fund (LON:NCYF) and also not dissimilar Twentyfour Select Monthly Income Fund (LON:SMIF. Neither appeal except for the big dividends as upside is limited. So I had to watch patiently for a share price dip to maximise the dividend yield thereafter and also to get small capital gain. That buy chance for both of them came in August 2023 when I bought CQS New City High Yield Fund (LON:NCYF) at 45p (10% yield) and Twentyfour Select Monthly Income Fund (LON:SMIF) at 74p (9% yield).

For readers looking for new buys others with far more potential upside could well appeal far more, but it’s worth monitoring the share prices of NCYF and SMIF in case there’s another temporary share prices dip. AND obviously check for updates before buying in case it’s a bad update or unlikely dividend cut behind the share price fall!

btw….Twentyfour Select Monthly Income Fund (LON:SMIF) is a rare payer of dividends monthly.

Investment Trust- Thoughts (January 2025)

Investment Trust- Thoughts (January 2025)

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Charles Mitchell

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