Investment Trust- Thoughts (March 2024)
Investment Trust- Thoughts (March 2024)
(Slightly early but away today for the rest of week and easier to produce in office with 2 screens)
For more information on Investment trusts visit:
Association of Investment Companies.
https://www.theaic.co.uk/
Free to sign up. On the site you can create portfolios, screen and compare Investment Trusts by Geographic region, Sector , Yield and more. A few Trusts who are not AIC members have limited data.
The Investment Trust Handbook by Jonathan Davies has articles and data on Investment Trusts. The 2024 edition is out now.
Available online or from Jonathan Davies's website https://money-makers.co/.
You can also sign up(Paid membership) for insights on Investment Trusts from him and others. Weekly email and podcast .
Citywire do a daily Investment trust email. Free, does have sponsored content but keeps you up to-date with Investment Trust news.
https://citywire.com/investment-trust-insider
Trustnet have an Investment trust section. https://www.trustnet.com/
Plenty of performance data on that site.
Edison cover Investment Companies and do a monthly Investment trust round up. You can sign up for free.
https://www.edisongroup.com/equities/investment-companies/.
You can sign up for newsletters/fact sheets from most of the Investment Trusts on their websites.
For ETF's I use https://www.justetf.com/uk/. You can screen buy region, sector and see performance comparisons.
February 2024 Investment Trust monthly performance. (up to 28/2/2024)
Any errors please advise.
Equity invested only.
Top 10
Weiss Korea Opportunity Fund (LON:WKOF) +18.5%
CC Japan Income and Growth Trust (LON:CCJI) +12.6%
Blackrock Greater Europe Investment Trust (LON:BRGE) +12.5%
Manchester And London Investment Trust (LON:MNL) +12.1%
VietNam Holding (LON:VNH) +10.2%
Martin Currie Global Portfolio Trust (LON:MNP) +9.4%
Chrysalis Investments (LON:CHRY) +9.4%
Onward Opportunities (LON:ONWD) +9.4%
Gulf Investment Fund (LON:GIF) +8.7%
Biotech Growth Trust (LON:BIOG) +8.4%
Bottom 10
Schiehallion Fund (LON:MNTN) -17.1%
British and American Investment Trust (LON:BAF) -15.8%
Foresight Sustainable Forestry (LON:FSF) -11.1%
Hipgnosis Songs Fund (LON:SONG) -10.1%
Lindsell Train Investment Trust (LON:LTI) -9.9%
Schroders Capital Global Innovation Trust (LON:INOV) -8.2%
Sure Ventures (LON:SURE) -6.8%
HICL Infrastructure (LON:HICL) -6.3%
Pantheon International (LON:PIN) -6.3%
Ecofin Global Utilities and Infrastructure Trust (LON:EGL) -5.3%
All Funds
Top 5
Weiss Korea Opportunity Fund (LON:WKOF) +18.5%
Alpha Real Trust (LON:ARTL) +17.6%
SDCL Energy Efficiency Income Trust (LON:SEIT) +17.2%
CC Japan Income and Growth Trust (LON:CCJI) +12.6%
Blackrock Greater Europe Investment Trust (LON:BRGE) +12.5%
Bottom 5
Harmony Energy Income Trust (LON:HEIT) -39.8%
Life Science Reit (LON:LABS) -25%
Regional REIT (LON:RGL) -19.5%
Premier Miton Global Renewables Trust (LON:PMGR) -19.4
Schiehallion Fund (LON:MNTN) -17.1%
I have looked at Weiss Korea Fund but as I recall mainly holds Pref shares so dismissed it. Looked at Sciehallion fund ages ago- given the fall might re-visit. Regional REIT I hold- not sure why performed so badly- what I read from the company looks on balance OK. Big debt, but they maintained the dividend.
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146 comments
Great thread. I thought I would share my experience of building a high yield/high discount IT portfolio.
I had been following the deep discounts mentioned in some of the Stockopedia posts and then screened for trailing yields, plus Stock Rank and Value Rank. I then looked at Market Cap > £200M (though 2 were chosen below that), followed by a look through all their recent news and their latest filings. At this point I rejected any REITs as I really don't like the prospects for property and don't understand it. I am pretty familiar with credit so had no issues with understanding some of the structured credit trusts. I was particularly interested in Trusts that might actively seek to reduce their discount including by winding up. I came up with an initial list of 8 stocks. On 25 March 2024 I bought (roughly) equal weights of:
Tufton Oceanic Assets (LON:SHIP)
Taylor Maritime Investments (LON:TMI)
Riverstone Credit Opportunities Income (LON:RCOI)
Atrato Onsite Energy (LON:ROOF)
Foresight Solar Fund (LON:FSFL)
Blackstone Loan Financing (LON:BGLF)
SDCL Energy Efficiency Income Trust (LON:SEIT)
GCP Infrastructure Investments (LON:GCP)
On 31 May, I added
Tritax EuroBox (LON:BOXE)
Gore Street Energy Storage Fund (LON:GSF)
EBOX/BOXE being added following press coverage.
So far, the portfolio has generated about 2% in dividends (some declared but not yet paid) and about 4% capital growth. BGLF has announced a partial redemption (5.6% of assets at NAV, representing a 50% premium to share price. EBOX/BOXE is the target of a takeover bid. GCP has committed to returning an additional £50M through a capital reduction exercise. FSFL continue to buy back shares regularly. SEIT sold assets equivalent to about 10% of their NAV.
If people are interested then I will continue to post the performance and developments.
Best of luck searching for hidden treasure in this sector.
Interesting Alex- I hold a few of your list. After a Times article to-day I am going to look at NextEnergy Solar Fund (LON:NESF) . I had previously thought div cover was weak- but the article implies it i safe. Here is the link but might be behind a paywall https://www.thetimes.com/busin...
Alex
Just in case you don’t realise this and following your very interesting post; Charles Mitchell starts a new Investment Trust thread every month. You’ve posted on the March thread ahead of the one running now for June. No problems with you doing that except that posting on the up to date thread might mean more see and respond to your post.
OK. Will post again on the June blog. Thanks for that.
Baillie Gifford Shin Nippon (LON:BGS) "
nother year of poor performance has encouraged Baillie Gifford Shin Nippon (BGS ) to offer investors a 15% exit if returns from the Japanese smaller companies fund do not beat its benchmark over three years.
Annual results this week showed the £374m trust suffered a 14.9% drop in net asset value (NAV) in the 12 months to 31 January, with shareholder returns tumbling 20% versus a 6.3% rise in the MSCI Japan Small Cap benchmark.
This leaves the fund’s NAV down 6.8% over five years with shareholders 26% worse off against a 24.1% rise in the index.
The investment company, which is run by Praveen Kumar, was hit by the rotation into lower growth, large-cap stocks and companies with exposure to troubled China.
In a bid to protect investor returns should the underperformance continue, the board is ‘committing to a one-off performance-triggered tender offer for up to 15% of the company’s issued share capital if the company’s NAV per share total return underperforms the [benchmark] total return over the three years to 31 January 2027’.
As is conventional, the tender offer would be priced at a 2% discount to NAV less costs."
From the AIC website- more here.
I am considering a purchase to balance my existing holding of Nippon Active Value Fund (LON:NAVF)
I often wonder about diversifying like this, but then also consider that this might just be diworsifying.
For example, I too hold Nippon Active Value Fund (LON:NAVF) and thought about the same diversification at the weekend with Baillie Gifford Shin Nippon (LON:BGS)
BUT............by holding Nippon Active Value Fund (LON:NAVF) I am already diversified - it has a good spread of companies which by that very nature means I am already diversified.
More importantly it is currently doing very well - a winner, which hopefully will continue performing.
By diversifying into another trust I feel (now I have thought about it further) that I risk simply diluting the gains in the winner. I appreciate Baillie Gifford Shin Nippon (LON:BGS) covers a different part of the market, but why suddenly will it become a performer and "add" to the overall return.
I am not challenging your thinking Charles (as I had exactly the same thoughts), but have decided myself that in this case I will not look at bringing in a different trust for diversification, but will stick with what I currently have.
My overall PF has over the last years performed like a very weak tracker, and I am sure that some of this is down to over diversification and it is something I need to address - get stronger convictions on a smaller number of stocks.
KevinS1- The two trusts have very different investment objectives- hence my thinking.
I am trying to shake up the board at Digital 9 Infrastructure (LON:DGI9) . I will post the emails I have sent onto the DGI9 thread, but would be grateful if anyone affected or supportive would send similar correspondence to the manager and the regulator.
I have emailed saying the 20 day period is up for addressing the complaint and her nothing.
Donald- just had a reply from Triple Point. Says very little other than saying all is being done in an orderly fashion. Looks like the Board need to be replaced- see they now have 4 Corporate advisers and fire Triple Point.
What a great thread! Between this and Ken's Quality/Bargain thread we seem to be serious danger of getting the best of several worlds without the bad manners of advfn. For the record, I hold a quite a few ITs in several folios including a couple that I advise and those tend to fairly passively managed with the usual suspects; but on my own account currently BPCR, BRSC, GCP, GSF, HFEL, GPM, JSGI, & VOF. Some of these are clearly hi-income ideas; of which GSF has been the most erratic performer. I've only just just started building a position in GPM, which I feel may well be getting ready to ride secular rise in gold and silver; it's ups and downs seem remarkably clear to see, unsurprisingly perhaps because it's essentially a trend follower. HFEL, as Ken says, seems to be at an inflexion point on the chart with a huge dividend. VOF looks hot to trot; and as others have suggested, I think there might be a good chart forming at China Growth and Income. BRWM is definitely a share to hold for term, and simply add or reduce according to larger trends; I hold it other advisory 3rd party folios along with others too numerous to mention!
I should add I also hold EBOX, RECI, SUPR, & VSL, but the fact that I forget to mention is probably because they just sit in my folio paying dividends. VSL, however, is a bit of an enigma; in process of being wound up to return NAV to shareholders, it appears to be paying 15% while on a 35% discount. On the surface, a win-win for the patient; but this doesn't appear to have helped the share price! RECI is also perhaps a buy for the brave or the credulous, yielding 10% on real estate 'senior debt' at a discount to NAV of 20%. I'm not sure anyone quite knows why, but perhaps others here have a view?
Brucie5- I have just boughtBlackRock World Mining Trust (LON:BRWM) for wife's ISA- yield is attractive. I have no idea on where commodity prices will go short term, but longer term they should increase as demand increases as the low carbon transition increases demand for a range of commodities.
Yes - that sounds like a fair prognostic! Also worth seeking copper plays on similar basis.
BRWM on a bit of a tear; also promising is CYN. GPM has retraced, but that in itself looks extremely bullish on a 5 year view, so long as it stays over 30p.
Pershing Square Holdings (LON:PSH) , just a couple of follow up thoughts on this to show how concentrated the portfolio is, which makes the longer term performance more remarkable:
Split of holdings
Restaurant Brands 13.4%
Canadian Pacific 8.7%
Canada: 22.2%
Universal Music Group 24.88%
Europe: 24.88%
Hilton Worldwide 12.1%
Howard Hughes Holdings 11.7%
Chipotle 13.7%
Alphabet 14.06%
Retail / Financial Services 3.5%
USA: 55%
There is also a lot of focus on the performance fee impact in discussions. This lays out the impact for 2023.
Per Share Operating Performance in 2023
1/1/23: $51.76
Net gain from investments / derivatives operations : $15
Performance Fee: ($1.67)
Other: ($0.05)
31/12/23: $65.04
My personal conclusion is I'm better holding this Trust in size, rather than attempting to pick 8 - 12 stocks in markets that I do not have time to follow or really understand.
Hi Old School,
Your personal conclusion is largely where I have got to with regards to all of my holdings.
I still have a lot of single stocks, but have again moved back towards more ETF's, Investment Trusts & UT's.
I like the challenge of researching companies and investing in them, but it's too easy to get hit with sudden PW's or other bad news and take a bath. For all my gainers most of my profits have been impacted by a few losers.
My perrsonal PF did well following my old style between about 2005 & 2020 ish when I shifted focus - had an amazing 2020 but mediocre 21/22/23.
I have come to the conclusion that I will still hold some individual companies, but will take a far greater % of my PF and utilise IT's & ETF's, with the odd UT where I feel the costs can justify the excellent performance - fees in HL are fine outside of UT's.
I am slowly increasing my exposure across all of my IT's & ETF's and am quite enjoying that challenge. Some of the great managers are truly worth giving your capital to and letting them use their skills to compound your returns.
The comments from the people above with regards to IT's (Ken, Donald, Charles, SSB etc etc) are all extremely helpful in identifying candidates for further research, so please all keep up the posts on this excellent thread.
I take the view that the fee is like a head office overhead in a business. As long as the Trust continues to perform all good for me. I hold.
Pershing Square Holdings (LON:PSH)
Annual Report 2023 (31/12/23)
Well worth a read, with key points to my eyes as follows:
Big fan of Pershing Square Holdings (LON:PSH) and with all of these activities and the ongoing performance I can see the discount closing further and providing an additional uplift to the SP.
I already hold in some of my portfolios, but will be adding it to this coming years ISA's.
The proposed US fund looks another catalyst to the SP going further as well.
I think you can make arguments for and against any investment trust, but I really cannot think of any reason not to hold Pershing Square Holdings (LON:PSH) . Better than a US tracker with less volatility.
Jacqueline Broers, Deputy Portfolio Manager at Utilico Emerging Markets Trust (LON:UEM) , assesses Vietnam’s economic fundamentals and investment opportunities.
The Utilico Emerging Markets Trust investment team recently travelled to Vietnam to see the growth potential of the Vietnamese economy first hand.
In this report she highlights why she believes the population dynamics should bring investment opportunities across telecoms, utilities and infrastructure sectors.
Investors will learn:
- What the trend in urbanisation delivers for investors
- Why consumption will increase over the next ten years
- What the key foreign direct investment opportunities are
- How the Vietnam manufacturing sector compares to China
https://youtu.be/bl8kx7z44UQ
VietNam Holding (LON:VNH) presentation coming up https://www.research-tree.com/...
March 26th 10.00.
ShoeShineBoy- I sort of agree with you- the high multiples of tech companies scare me. As both trusts trade at a discount maybe the market shares your concerns. Polar Capital Technology Trust (LON:PCT) trades at 9.74% discount and Allianz Technology Trust (LON:ATT) 9.65% . I have lost out though by ignoring these over the last year ! ATT up 61% and PCT 55%.
I have missed out on the tech sector completely! In hindsight it seemed an obvious thing to do to take a position in Polar Capital Technology Trust (LON:PCT) or Allianz Technology Trust (LON:ATT).
The monthly update from Polar Capital Technology Trust (LON:PCT) reads well but I think if I am going to take a position, the better thing to do is to find a vehicle that invests in a range of much smaller technology companies worldwide and hold it for the long term. That way I can hope to gain from tomorrow's winners. Suggestions welcome.
Polar Capital Technology Trust (LON:PCT) February Fact Sheet: https://tinyurl.com/mpcwe9fj
A number of new names (at least new to me) are mentioned in this Fact Sheet: Quanta Computer, Pure Storage, TradeDesk, Datadog, Monday.com. Perhaps these are names that are just not as familiar as the Magnificent Seven ?
A few quick searches on Google gives the following current PE ratios for the top 10 stocks in Polar Capital Technology Trust (LON:PCT):
37 Microsoft
73 Nvidia
33 Meta
26 Apple
367 AMD
24 Alphabet
26 TSMC
60 Amazon
45 ASML
37 Broadcom
The above is all too expensive for me.
I had just finished typing this post out in my email when I looked at last week's IC and noticed the following article on Alliance Trust (LON:ATST) (I gotta say there was very little else to read in the IC last week apart from this and a decent article on Ashtead (LON:AHT)). The basic message of this article for anyone who can't access it is that the performance of the trust last year was down to picking the right stocks from the Magnificent Seven: holding Alphabet and Amazon but not Apple. I'm still not convinced enough to buy these tech stocks at the above valuations. https://tinyurl.com/4et56rpb
The recent WityWire podcast, an interview with Ben Rogoff of Polar Capital Technology Trust (LON:PCT) was good. He talks about AI being as important as the creation of the internet and also about how most of today's hardware is not completely compatible with software being created for AI. So that means that a lot of hardware providers (picks and shovels again!) should benefit from this trend. https://tinyurl.com/88vcwc7t
SSB
Yes expensive now but you should look at the PEG as well, some of those have high growth forecasts, such as NVIDIA (NSQ:NVDA). The time to buy was 2022. There may well be a correction. I'm looking to reduce my Tech shares holdings.
Hi Rusty2,
a correction is the reason I am holding off for now. Tech and especially AI is a trend that is not going away. But how long to hold off and is there a vehicle I can buy that invests in tomorrow's tech winners. Knowing so little about tech is the reason why I prefer the closed ended trust / ETF route to direct investments. Drip feeding on a quarterly basis is perhaps an obvious answer ?
SSB
Yes indeed. Maybe a reason to look at the investment companies rather than the trusts themselves? Such as POLR - good dividend to be getting on with as well!
An interesting e-mail from my platform (AJ Bell) about Bluefield Solar Income Fund (LON:BSIF) which to be honest seems a bit bizarre:
We’ve got an important update for you about an investment you hold – BLUEFIELD SOLAR INCOME FUND LTD.
Recently, this investment failed a fair value assessment, carried out by the manager of the investment itself. This means the investment may not offer you good enough value over the long term.
What’s a fair value assessment
Price and value have been highlighted by the Financial Conduct Authority (FCA) as key factors in delivering good outcomes for customers. As part of the FCA’s Consumer Duty Regulation, financial products sold to UK retail customers are required to complete a fair value assessment, using a number of factors to assess whether the product offers value to its customers.
Off-shore funds are not required to produce a fair value assessment, however we believe it's important to still understand whether they are providing value, we have therefore worked with an independent third party called 360 Fund Insight who have carried out this analysis. A PDF is available which shows some information about the methodology which goes into assessments by 360 Fund Insight.
It would seem to me that there are an awful lot of renewable/infrastructure Investment Trusts (I hold a few!) that would fail a fair value assessment at the moment (offshore or not) given the level of discounts across the sector. Then there is the inequitable cost disclosure requirements which have been the subject of much discussion in the Investment Trust Community, the regulatory authorities and even the House of Lords/Parliament (courtesy of Baroness Altman).
Acounsell-I had the same with Hydrogenone Capital Growth (LON:HGEN) . The main impact as far as I can tell is it will not be an allowed investment for monthly investment schemes. So those that have these in such a plan will have the plan cancelled.
ACounsell.
Apparently these emails are robotic with no human involvement.
Though I hold Gore Street Energy Storage Fund (LON:GSF) Foresight Solar Fund (LON:FSFL) and Bluefield Solar Income Fund (LON:BSIF) it’s not with much confidence, and I only bought recently on the grounds that the big discounts to NAV were pricing in a lot of negatives.
Reasons for having doubts include lack of clarity about their investments and how on earth do we attempt to value them, along with so much being early stage and unproven. But I’ve far less experience of Renewable type Trusts than the mainstream ones, so most of this post could be nonsense!
IF it is then please post.
I also hold BSIF and GSF- feel reasonably confident re the dividends being paid !!
Also held GSF, Harmony and BSIF until the recent rout - I still have a liking for renewables but have put those sale proceeds into TRIG. I think their geographical spread, variety of investment types and size more reassuring for dividend and future growth opportunities.
Thanks Lincs- not looked into TRIG.
India Capital Growth Fund (LON:IGC)
India Capital Growth Fund HOODinar
Date & TimeApr 10, 2024 11:00 AM
https://riverandmercantile.zoo...
Interesting article on Vietnam, thought it was worth sharing. Could argue the UK has not been that stable politically but at least it is a (supposedly) developed country. I'm sure the Vietnamese leadership will not want to lose the foreign inflows.
Upside for the trusts in the long term is a re-rating from Frontier to Emerging Market. A little way off though.
Once a beacon of stability, Vietnam to name third president in a year
Wed 20 Mar
By Francesco Guarascio, Khanh Vu
HANOI, March 20 - Vietnam is seeking its third president in little more than a year after its ruling Communist Party on Wednesday forced the resignation of Vo Van Thuong, who was only elected last year after the sudden dismissal of his predecessor.
With accumulated foreign direct investment higher than its gross domestic product, Vietnam's stability is crucial to multinationals with large operations in the Southeast Asian
manufacturing hub, including Samsung Electronics 005930.KS, which ships from Vietnam half of its smartphones, and Apple AAPL.O , which has many key suppliers in the country.
That stability, which has been guaranteed for decades by a state tightly controlled by the Communist Party, now looks less certain, although analysts agree that the current leadership
changes will not impact the country's key policies, including its "bamboo diplomacy" aimed at keeping good relations with the United States and China at the same time.
Behind the latest reshuffle is the long-lasting "blazing furnace" anti-graft campaign that party chief Nguyen Phu Trong launched back in 2016. It is aimed at eradicating corruption so
widespread that in some provinces up to 90% of applicants for land certificates paid a bribe, according to a report published in March 2023 by the U.N. Development Programme and other organisations.
The campaign intensified over the last two years, with critics saying it has been increasingly used for political purposes by party factions competing for power.
Thuong, 53, stands accused of having violated party rules, according to a statement issued on Wednesday, which did not clarify what exactly he did wrong.
He quit days after police announced the arrest for alleged corruption a decade ago of a former head of central Vietnam's Quang Ngai province, who served while Thuong was party chief there.
WHO COULD BE VO VAN THUONG'S SUCCESSOR?
Vietnam's parliament will meet on Thursday in an extraordinary session to accept Thuong's resignation, confirming a Reuters report from Sunday.
It is expected that it will appoint an acting president until the party decides the next candidate.
The most likely option is Vice President Vo Thi Anh Xuan, who had to step in last year to temporarily replace the suddenly dismissed former president Nguyen Xuan Phuc.
Then it took the party a month and a half to pick Thuong, who at the time of his election had been widely seen as a close ally to the party chief Trong.
Leading candidates for the permanent position include the powerful minister of public security, To Lam, and party veteran Truong Thi Mai, according to multiple analysts.
However, the former may be interested in the far more powerful position of party chief, a role that is up for grabs in 2026 when Trong's third mandate ends, but that the ageing leader
may make available earlier.
Mai's job had been seen at risk amid the latest leadership reshuffle, but no decision was announced about her on Wednesday. That could make her a lame duck - which in Vietnam has often been the key to access powerful positions.
(Reporting by Francesco Guarascio @fraguarascio; Editing by Nick Macfie)
((mailto:Francesco.Guarascio@thomsonreuters.com;))
Not sure there’s much there to worry about ShoeShineBoy. Vietnam scores 42 on the world corruption index (where 0 is most corrupt and 100 squeaky clean) compared with 39 for India,45 for China and 73 for UK.
Also afaiaa there’s no clamour for an end to the communist Government there. Don’t know anything about their internal politics but doubt that the apparent jockeying for top position/s will affect stock market performance there.
Hi Ken,
thanks for reverting on the my Vietnam post. I tend to agree with what you say but I like to question the wider economic and political changes these days. I didn't do this enough in early 2021 after the war in Ukraine started. I didn't have to be rocket scientist to google "Ukraine" and understand that the country was one of the top exporters in the world of wheat and think about the price impact of that. Except I didn't! Hence trying to brush up my habits and not take everything at face value.
fwiw, I still own VietNam Holding (LON:VNH) but this now trades on a 7% discount. Six months ago, it was about 15%. So I am happy with that but it's a small trust (100m mkt cap) so wealth managers are unlikely to buy much of it. The 2023 annual report says the trust is allowed to invest up to 20% of it's NAV in direct private equity investments. Again, looking at the annual report, the top 10 holdings account for 62% of the trust. A detailed breakdown is given for the top 5 holdings (40% of the trust) which are all listed equities so I am guessing a little at the actual private equity exposure. Hold on, I now see the IFRS 13 disclosure on page 67 of the 2023 annual report and everything is listed as level 1 (inputs that are quoted market prices (unadjusted) in active markets for identical instruments. This level includes listed equity securities on exchanges). So no private equity in VietNam Holding (LON:VNH). Fine, I got there eventually :-)
The most recent monthly update reads well so the reasons most people on this board are familiar with: young population, urbanisation, benefitting form poor US/China relations etc. The AIC web site tells me the 1 year NAV performance is +33% which is impressive and also takes out any impact from buybacks etc.
https://tinyurl.com/zk9efm77
Would I switch to VinaCapital Vietnam Opportunity Fund (LON:VOF) ? 700m mkt cap so I would hope institutions would be interested. 22% discount but this has been as high as 10% back in early 2021. Comparing the top 10 against VietNam Holding (LON:VNH), there are a couple of similar holdings but that is it. Financials are popular in both trusts, I guess because a growing economy needs banks to lend money to both businesses and consumers. The top 10 accounts for 63% of the trust so again, pretty concentrated. The one year NAV performance is +20% so not as good as VietNam Holding (LON:VNH). But over 5 and 10 years, both trusts have had similar growth so maybe swings and roundabouts.
What about the private equity positions ? In the 2023 annual report, the Chairman mentions a USD 53m reduction in fair values as at Dec-22 (I assume this was related to the private equity investments) and then a USD 27m increase as at Jun-23 (again, I assume this was related to the PE positions). Pages 16 and 17 talk about the private equity investments and notes the carrying values of some of the investments are below original cost so they were obviously poor investments which appear to be related to the downturn in the real estate market. But it does look like they take the re-valuation of private equity assets seriously and adjust the NAV on a regular basis.
Page 94 has the full NAV by level 1, 2 and 3 (level 3 being the most illiquid ie: inputs for the asset or liability are not based on observable market data ie: market prices). The total NAV is 1.1bn as at 30 June 2023. Of this, 342m is level 3 which has moved around a lot (see above). Private equity investments make up 255m of the NAV, so almost 25%.
https://tinyurl.com/4crxp8nn
I'm undecided! A bigger mkt cap with a bigger discount but which holds a large percentage of private equity (ie: level 3 assets) which in the past has moved around a lot. This is why it has a bigger discount to NAV. Ok, I got there eventually.
I like the Vietnam story (and the country btw, long time since I was there but the people, history and food were all great) but I am a low risk investor these days and so I think I will top up my position in VietNam Holding (LON:VNH) if/when the discount widens a little as I now view it as lower risk.
The only other thing to say is I'm an exciting bloke taking such an interest in IFRS 13 :-)
Views welcome from all.
SSB
Thanks for another great reply ShoeShineBoy. You aren’t half thorough in your research!
I’d be happy holding all three Vietnam Trusts and have held VinaCapital Vietnam Opportunity Fund (LON:VOF) and VietNam Holding (LON:VNH) for most of this Century and they’ve been great winners and there’s such a strong case for believing there is a lot more to come, barring as with all our investments, no shock bad news.
There seems to have been more focus on the non quoted investments in VinaCapital Vietnam Opportunity Fund (LON:VOF) more recently and those probably explain the discount being even wider than usual. With the VietNam Holding (LON:VNH) discount still narrower than in the past when from memory all 3 Vietnam Trusts traded on similar too wide discounts, there’s a good chance that VinaCapital Vietnam Opportunity Fund (LON:VOF) will continue to play catch up. AND, though it’s modest, VinaCapital Vietnam Opportunity Fund (LON:VOF) is the only one paying dividends.
Hi Ken,
thanks for the feedback. I tend to run a concentrated portfolio (approx 16 to 20 stocks/trusts) and wouldn't buy anything these days without reading the latest annual or interim report. Not in detail maybe but just to get a feel for how mgt think and behave. If I had done this in the past then I probably wouldn't have bought some of the shares that I ended up taking a loss of more than 20% on, those buys clearly didn't make sense in hindsight and were completely avoidable. Oh well, bought experience and all that!
Reading my previous post, I really shouldn't be surprised that a trust with a 25% exposure to private equity trades on a larger discount. It's obvious when I think about it. It's good to stand back and think about these things later rather than get bogged down in tons of detail. Take the easy decisions SSB!
The following email from Dynam Capital dropped into my inbox the other day. I'm sure others also got the same email but I will copy the link here in case.
https://tinyurl.com/4sy7am89
All very positive, Dynam Capital are certainly good at marketing their trust. Very few negatives discussed or even mentioned.
I would like to increase my exposure to Vietnam as my holding is very modest and the piece that got my interested was: "The market is appealing cheap, with stocks trading at around 10 times earnings and companies forecast to grow their earnings by an average of 10% in 2023".
A quick search on Google allows me to estimate the PE ratios of the top 10 names in VietNam Holding (LON:VNH) (which account for 64% of the total NAV):
FPT Corp: PE ratio of 21
Military Commercial Joint Stock Bank: 7
Gemadept Corp: 10
Saigon Thuong Tin Commercial Joint Stock Bank: 7
Joint Stock Commercial Bank For Foreign Trade of Vietnam: 17
Phu Nhuan Jewelry JSC: 26
IDICO Corp JSC: 25
Asia Commercial Joint Stock Bank: 6
SSI Securities Corp: 17
FPT Digital Retail JSC: n/a (presumably not making any profits to generate a PE ratio)
I will wait to increase my exposure. The discount on VietNam Holding (LON:VNH) is currently 8% but recently touched 0% so I think I can afford to be patient.
VinaCapital Vietnam Opportunity Fund (LON:VOF) recently issued their February update:
https://tinyurl.com/9btrr289
And also their interim statement:
https://tinyurl.com/3ymyv8kv
Stable interest rates, improving real estate market and the influence of retail investors gets mentioned multiple times in the interim statement.
The February update tells us the trust has a 19.8% investment in private equity. Can I get more comfortable around this ? Page 16 says:
"Many publicly listed companies in Vietnam still impose restrictive foreign ownership limits. Although public companies are permitted to lift these limits, fewer than 100 companies have chosen to do so. As such, particularly for high-quality publicly listed companies with no room for additional foreign investment, foreign investors may need to pay a premium if they want to find a foothold into these publicly listed companies.
In private companies which are unlisted, these foreign ownership restrictions largely do not apply, enabling our fund to take meaningful stakes in these high-quality companies. Our approach involves identifying both private companies and investing at an early stage of their development and capture their long-term growth. Moreover, within private companies, we are able to exert significantly more influence on governance and help push forward strategic drivers for growth".
So there are positives with the private equity holdings it seems. Maybe I should trust VinaCapital Vietnam Opportunity Fund (LON:VOF) to manage this the same as HgCapital Trust (LON:HGT) which I hold. I will give some more thought to VinaCapital Vietnam Opportunity Fund (LON:VOF).
SSB
Craig at VNH will always respond to email questions. Not contacted VOF (which I also hold) so no comment on that. I do like funds that respond- although hold some Blackrock Trusts and they never do !!
City of London Investment Trust (LON:CTY) have a meeting at 17.00 today -register through InvestorMeet Company.
I listened to CTY. Law Debenture (LON:LWDB) also from Janus Henderson looks similar in terms of Uk weightings but seems to have a better performance. Neither are trusts I know well so interested in comments. Considering one for my wife's ISA- she wants low risk holdings.
Scottish Oriental Smaller Companies Trust (LON:SST) have just issued a new insight which is interesting reading. https://www.scottishoriental.c...
Vietnam prospers: "Recent media reports have touted Vietnam's stock market a ‘positive growth’ market as it continues to outperform neighbouring countries. Vietnam’s consensus 2024 GDP growth forecast of 6% is the highest in Southeast Asia thanks largely to ongoing policy developments. The government continues its effort in directing ministries, sectors, and municipalities to focus on sustainable growth, for example, by creating favourable conditions for businesses, spurring on a more open, transparent market, and making improvements to HOSE. Improvements to address the ‘pre-funding’ of brokerage accounts should allow Vietnam to be upgraded to a FTSE Russell Secondary Emerging Market by 2025."
Latest VietNam Holding (LON:VNH) newsletter here.https://www.vietnamholding.com...
I hold VNH and Vietnam Enterprise Investments (LON:VEIL)
India Sensex snaps 5-day losing streak .
India stock market reverses downward trend on value buying https://timesofindia.indiatime...
I hold India Capital Growth Fund (LON:IGC) JPMorgan Indian Investment Trust (LON:JII) and Ashoka India Equity Investment Trust (LON:AIE) .
These corrections do happen- normally the market then moves higher. But time will tell.
Gresham House Energy Storage Fund (LON:GRID) Contacted the company re the slide in the share price. Had this response "With regard to the Gresham House Energy Storage Fund plc share price over the last 24 hours, we are aware of retail selling in the market that in the absence of other buyers, has driven the price lower. No company RNS announcements have been released in this period."
Given the last positive comments and with the yield +10% looks a good opportunity.
My biggest holding is Geiger Counter (LON:GCL) - there has been some share price weakness here recently and discussed on the Uranium thread. I also have just bought BlackRock World Mining Trust (LON:BRWM) for the yield and hopefully a commodities resurgence. Does anyone have a view on gold and gold miners and the Investment Trust Golden Prospect Precious Metals (LON:GPM) ?
GPM Golden Prospect Precious Metals has been a disappointment to me. They have many Australian listed silver companies whereas Ninepoint Silver Equities fund has mainly Canadian listed ones. This latter fund is managed by Maria Smirnova and overseen by Sprott Asset Management. I have more confidence in them and the performance has been better. You may not, however, be able to buy any in your jurisdiction.
So back to GPM. They raised cash last autumn at a price that was higher than the market price so my rights lapsed. I already have an overweight position because if silver takes off, it will fly and no-one can catch up. Being a smaller market, supply and demand cause over-reaction.
Given the poor performance I looked at the entire portfolio and found plenty of large caps as well as smaller speculative positions so do not expect the trust to go to zero. Management has not been recommended to me whereas Sprott know what they are doing and it has been reflected in results. In both cases, however the market is depressed, despite recent buoyancy in bullion prices.
So it may be time to add, or buy later when/if the shine wears off, because irrespective of management, upside can be substantial.
I trade silver via ETFs on a regular basis but the equities require special skills. If one tries to value them with traditional metrics, found on Stockopedia and elsewhere, results are meaningless. A few webinars with Rick Rule improves one's understanding but guts of steel are required to hold a position in a single equity.
Gold and gold equities can be accessed by many other instruments that are more liquid than GPM.
Scottish Mortgage Investment Trust (LON:SMT) have announced a £1bn share buy back over the next two years. Hopefully this goes some way to narrowing the discount.
Although they could have done it a lot cheaper last year!
Dear All
I rarely contribute to this thread so firstly congratulations to Charles for having the foresight to start the conversation, which is clearly valued by Stockopedia subscribers.
Anyway cutting to the chase, I am reasonably knowledgeable regarding ITs but my main focus is on individual small cap shares, all of which are held within an ISA, as a consequence my knowledge of what is happening in the investment trust arena was and to an extent still is a little rusty.
During the pandemic and having fully subscribed to my ISA I started a small Trust and funds portfolio with Hargreaves Lansdowne. I try not to tinker but sold some ITs during the enthusiasm generated by the discovery of the covid vaccines and have subsequently bought back in, examples being Finsbury Growth & Income Trust (LON:FGT) Migo Opportunities Trust (LON:MIGO) and Oakley Capital Investments (LON:OCI) . I have also made the odd boo-boo, the main culprit being the Amati Strategic Metals Fund that was sold sometime ago for a 25% loss.
The portfolio (see below) currently consists of 7 investment trusts,
Fidelity European Trust (LON:FEV)
Finsbury Growth & Income Trust (LON:FGT)
HgCapital Trust (LON:HGT)
Migo Opportunities Trust (LON:MIGO)
Nippon Active Value Fund (LON:NAVF)
Oakley Capital Investments (LON:OCI)
Rockwood Strategic (LON:RKW)
plus a REIT Londonmetric Property (LON:LMP) and the Amati Global Innovation fund.
Londonmetric Property (LON:LMP) is a consequence of my holding in LXi REIT (LON:LXI^C24) that has recently merged, being acquired by the former and which I bought too early.
Most of the above, notably Fidelity, Nippon and Rockwood plus the Amati fund, which happen to be my largest holdings are showing reasonable gains as is HgCapital Trust (LON:HGT), the other holdings are either treading water or showing a small loss.
If a Trust is performing well, even if it is trading close to par, I tend to run with it, rather than selling and trying to buy back in if/when the discount widens.
I perhaps naively have avoided Trusts where the performance has been driven by the so called magnificent seven, as I am wary of the extreme valuations of such shares, despite the fact that they are excellent companies.
All thoughts and observations welcome.
Looks a balanced portfolio. I hold OCI and NAVF. I would possible add a trust in India and Vietnam- I hold VietNam Holding (LON:VNH) , Vietnam Enterprise Investments (LON:VEIL) for Vietnam and for India exposure India Capital Growth Fund (LON:IGC) ,Ashoka India Equity Investment Trust (LON:AIE) . I also just bought the under performer JPMorgan Indian Investment Trust (LON:JII) hoping the new managers will improve performance. Latin America should benefit from near shoring-I hold Blackrock Latin American Investment Trust (LON:BRLA) .
Enjoyed your post jonno and as Charles said yours looks a balanced portfolio.
Here fwiw are my thoughts on these 6 Mainstream Trusts:-
India Capital Growth Fund (LON:IGC 151p. Discount 7%.
Unlike others here I’m continuing to avoid India. The Indian market is on a PE around 24 and despite recent falls still looks very fully valued. That’s more than twice the current PE for China. I bought India Capital Growth Fund (LON:IGC) on my buy the extreme dips preferred tactic at just 46p in 2020 and sold in November 2021 at 129p believing then too that India was ripe for a correction. It wasn’t and the share soared to 190p. The fall to 150p has been fast. Too early to buy? Charles and others here think it isn’t. A tactic if not sure is to buy some on this dip and save part of the stake in case the current falls have further to go and there’s a chance soon to average down.
Henderson Far East Income (LON:HFEL) 221p. Discount 3% and 10.8% dividend.
Agree with Charles on this one! A VERY tempting buy (see previous posts for more on why) AND at last NAV (up to 233p today) is on the up. Share bottomed at 198p in October last year and the buy opportunity then was covered on an earlier Investment Trust thread here. I hold.
International Biotechnology Trust (LON:IBT) 662p. 9% discount and 4% dividend. Another one covered on Investment Trust threads here at a lower price. It’s up from bombed out 548p last October. Biotech sector at the start of another sustained good run after the latest “bust” phase? . It’s a sector noted for sustained good runs followed by sustained bad runs! I hold.
VinaCapital Vietnam Opportunity Fund (LON:VOF) 455p. Discount STILL 24% even after modest recent share price gain. NAV now almost £6. Vietnam PE at 15 is much lower than India. The case for VinaCapital Vietnam Opportunity Fund (LON:VOF) has been put in previous posts. I hold.
BlackRock World Mining Trust (LON:BRWM) 520p. Discount 8% and dividend yield (recent 17p was a smaller cut than expected) is 6.6%. BlackRock World Mining Trust (LON:BRWM) remains the best way to play the next Mining bull market for those who prefer a Trust to any of the major shares in the sector. Share bottomed at 498p recently.
Note this! The sector has been even more volatile than usual recently with big gains of up to 5% one day flowed by big falls the next day. Sometimes extreme volatility like this marks the end of bull and bear phases.
Mining sector rally imminent? Hope so as I hold BlackRock World Mining Trust (LON:BRWM) , CQS Natural Resources Growth and Income (LON:CYN) , and Blackrock Energy and Resources Income Trust (LON:BERI) all at more than double the buy prices on my buy the big dips tactic. I also hold Anglo American (LON:AAL) , Rio Tinto (LON:RIO) and Glencore (LON:GLEN) so hope I’m right to be optimistic about the Mining sector! IF I am, then another plus is the already useful dividend yields and big dividend increases are likely again if/when the sector recovers.
Finally. Jpmorgan China Growth & Income (LON:JCGI) 214p. 11% discount. 6.4% dividend but dividend level depends on NAV. I don’t hold but am getting tempted despite the obvious China risks. China is on a PE of 12 and a lot of bad news (but NOT the consequences of an invasion of Taiwan) looking priced in. Jpmorgan China Growth & Income (LON:JCGI) share price peaked at 808p in Feb 2021. Now over 70% lower!! Share has recovered from rock bottom 191p in January. So often the best time to buy is when most are saying don’t.
I hold a lot of other Trusts but focus in this post is just a few mainstream Trusts.
Ken- China is tricky- I am monitoring an ETF to try and work out when to but into a fund. India always has looked pricey in recent times- I am still a holder. I do occasionally sell a bit if i think looks pricey- I did post about India Capital Growth Fund (LON:IGC) selling treasury shares- a warning and should have sold more- hindsight is great. VietNam Holding (LON:VNH) has done well for us- held it for a 4 years- and added Vietnam Enterprise Investments (LON:VEIL) recently.
Never invested in Mining trusts- I only hold a long standing holding in what was Algy Cluff's gold company years ago- now Perseus Mining (ASX:PRU) and Sylvania Platinum (LON:SLP) .
Charles
I haven’t bought a China Trust yet but am very tempted. Probably go for JPMorgan Japan Small Cap Growth & Income (LON:JSGI) as their performance record was excellent ahead of the big China market falls.
Yes. Good update from VietNam Holding (LON:VNH) today. I hold and also VinaCapital Vietnam Opportunity Fund (LON:VOF. Remains a MUST market imo.
Mining Trusts are also very tempting again and BlackRock World Mining Trust (LON:BRWM) still paying over 6% dividend even after the cut, looks the pick of them.
I hold BlackRock World Mining Trust (LON:BRWM) and up 67% with gains reduced by average ups, CQS Natural Resources Growth and Income (LON:CYN) which has tripled excluding dividends and Blackrock Energy and Resources Income Trust (LON:BERI) up 131% excluding dividends. Some of the current bombed out Trusts across the investment Trust sector are likely to have gains like those when eventually (hope it’s not IF) there’s a sustained good run.
Meanwhile e.g for the big dividend paying REITS like Tritax EuroBox (LON:EBOX) Aew UK Reit (LON:AEWU) Alternative Income REIT (LON:AIRE) and Supermarket Income REIT (LON:SUPR) it’s a case of enjoying the huge dividends while the shares just bump along around current levels. Lower interest rates ahead should do the trick.
Ken- I still cannot decide on China- so doing nothing !. I am following an ETF.
Ken- just had this into my email box- see link. The last para might explain why Chile are at the moment touring Kora and Japan for infrastructure investment .
Ken
My China correspondent is in country for 2 weeks currently. Will let you know what his views are as always. Situation probably not helped by EU announcements today re-EV subsidies and tariffs, though that may not impact in the wider scheme. Kenmare Resources (LON:KMR) results today don't seem to be overly excited about demand from China picking up any time soon. It is their largest market for Ilmenite by some way. Does Thungela Resources (LON:TGA) commentary give anymore insight?
I have an alert set on Fidelity China Special Situations (LON:FCSS) which looks like it is about to trigger on the recent bounce since Chinese New Year. Will await return of the prodigal early April I think before actioning.
Thanks sevenccc-look forward to further views on China. I have just bought a small amount of HSBC MSCI China UCITS ETF USD (LON:HMCH) before buying a trust when I feel more confident.
Charles/Ken
Have been looking at Vietnam Trusts. Is there any obvious reason why VietNam Holding (LON:VNH) trades at around a 5% discount versus a discount of 21% or thereabouts for its contemporaries, VinaCapital Vietnam Opportunity Fund (LON:VOF) and Vietnam Enterprise Investments (LON:VEIL)
Your thoughts and views would be appreciated and off course those of others.
Jonno- VNH is a lot smaller- Market Cap £100m v VEIL at £1118m and Vinacapital £708. VNH performance over 3 years and 5 years is superior. And they-in my opinion-market themselves very well. I email them from time to time with a question and Craig Martin responds pretty much same day. A few years back when the discount was wide they had a tender offer.
Jonno.
You’ve asked this question before on Feb 23rd and I’ve replied too. Perhaps you didn’t see the post as it’s SO easy unfortunately for posts to get lost on Stockopedia bulletin boards.
No there’s no obvious reason why VietNam Holding (LON:VNH) have outperformed by so much. The share price outperformance is partly because of the now narrow 5% discount for VietNam Holding (LON:VNH) compared with over 20% for VietNam Holding (LON:VNH.
Note though that over the last month VinaCapital Vietnam Opportunity Fund (LON:VOF) has outperformed VietNam Holding (LON:VNH) with a 4% gain compared with down slightly for VNH.
I made the case for VinaCapital Vietnam Opportunity Fund (LON:VOF) in this so far well timed post last month:-
“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...”
I don’t follow Vietnam Enterprise Investments (LON:VEIL) but others, including Charles, do.
Thank you Charles/Ken for your replies
I shall do a little more research before choosing one of the Vietnam Trust. I will post the outcome in due course. In the meantime I wish you well with your IT investments.
All the best
Ken, JCGI is looking very perky of late and the 11% discount gives a yield of >6%. The recent strength of HFEL from a low base may well imply some recovery in store for JCGI, though obviously with more specific risk. However, to be out of China altogether with the the this sp seeming to recover from a 5 year decline to the present quarter of £8 peak price , may also seem an opportunity cost of sorts?
Brucie5.
I’ve only just seen your posts as you did them on the March Investment Trust thread instead of the April thread. Charles Mitchell begins a new Investment Trust thread at the start of every month.
I’m half tempted by Jpmorgan China Growth & Income (LON:JCGI) as the time to buy is, like now, when most investors are bearish about China and after the big share price falls, and when most of not all of the bad news is priced in, and recovery isn’t. A negative though is the likely further small dividend cut ahead. They aim to pay 4% of NAV and at current NAV that would equate to around 10p a year.
I’m not sure any commentators here really know what’s going on at the heart of the China Government! That one party Communist State can take economic decisions and risks that maybe Western Democracies couldn’t. And they might be able to “fiddle “ figures too. But that doesn’t make it a no for investors and Jpmorgan China Growth & Income (LON:JCGI) looks a good one to check out right now.
Henderson Far East Income (LON:HFEL) showing clear signs that the worst is over now after a far too long record of dramatic sector underperformance.
Here’s their most recent monthly factsheet:-
https://cdn.janushenderson.com...
Note the further increase in NAV since then with the latest daily update today at 231.6p. Share price is 222p and a modest recovery from extreme 197p low last October.
Dividend increased for 16 years running and they are clearly determined to continue with at least token annual increases. Their latest update is quite optimistic about dividends. Dividend yield is still about 10.85%. I hold but am still down 14% even after recent share price gain.
Henderson Far East Income (LON:HFEL) is just one of so many high yielding Trusts well worth checking out. Perhaps time for another post on some of those?
Ken- totally agree looks a steal. I invested for my wife's ISA-risk adverse and likes income. She is not only getting the yield but up 6%- I only bought in mid Feb this year. I had been watching for a while but the board did state they would keep dividend growing and new managers in place. There is a misconception that Far Eastern companies do not pay dividends. They do- and I suspect we will see other listed in smaller markets -some emerging and frontier-pay dividends as they get more international investors.
I am more interested in these markets than the UK stock market at the moment. USA just looks pricey and driven by the 7.
Whilst I don't like the Chinese exposure, I do like the diversification into Vietnam & India. In addition the holdings of BHP & Rio Tinto will hopefully provide some capital upside as the commodities market starts to recover.
I have a small holding already, but considering upping this further. I have a small sum ready to go in my drawdown account and feel US is slightly toppy so looking for other options outside of global funds (as they are generally 60+% US centred. My other option is Fidelity European Trust (LON:FEV) which I like the look of, but not really drilled down into it in too much detail.
I chose European Smaller Companies Trust (LON:ESCT)
Just listened to "Debunking myths and unveiling opportunities in listed private equity" arranged by Edison. Oakley Capital Investments (LON:OCI) were one of the speakers. I fail to understand why this trust is on a 32% discount whilst it is 2nd in 5 year performance.
So Top 5 trusts 5 year perfor,amce are :
3i (LON:III) 215%
Oakley Capital Investments (LON:OCI) 167%
HgCapital Trust (LON:HGT) ) 155%
NB Private Equity Partners (LON:NBPU) 88%
abrdn Private Equity Opportunities Trust (LON:APEO) 82%
Discounts
3i Premium 35%
OCI -31%
HGT -9%
NBPU -23
APEO -28%
I hold OCI and having listened to the talk I am considering increasing- the discount looks excessive compared to other funds and performance over 5 years.
The under lying feeling seems to be that over the next couple of years the number of realisations from the funds will increase- and that will show the current NAV's are conservative.
I meant to say I cannot understand why 3i is at such a premium- over 50% assets in one investment-Action, a supermarket chain. However fast growing it is I cannot see the justification. I had held a while back- bought at a rare discount but sold once premium got to 8%. I do not regret that decision as it happens despite the share price move.
BlackRock Latin American Investment Trust’s (BRLA’s) lead manager Sam Vecht and deputy manager Christoph Brinkmann remain optimistic about the prospects for the region. Interest rates are coming down as Latin American central banks have been more proactive than those in developed markets in raising interest rates to combat higher inflation, which should be supportive for economic growth and asset prices. Latin America has remained relatively isolated from global geopolitical conflict, enabling trade with both eastern and western nations. The region has been overlooked by global investors, which has led to very attractive valuations on both absolute and relative terms.
Commentary again from Edison for those interested with the usual provisos
Thanks Chelsea. I did a piece on Latin America in January Investment Trust Thoughts.
Edison comment on Foresight Solar Fund (LON:FSFL)
Foresight Solar Fund (FSFL) celebrated its 10-year anniversary of listing on the London Stock Exchange with decade-high cash distributions from assets of £120.4m in its FY23 results (year end 31 December). FY23 also saw FSFL’s divestment programme come to fruition with the sale of a 50% stake in its Spanish Lorca portfolio at a 21% premium to its holding value. The proceeds of this divestment, along with free cash, were used to pay down the fund’s variable rate debt via its revolving credit facility by £40m and to continue to deliver on the share buyback programme, with half of the £40m being deployed in 2023. FSFL released guidance of a 6% y-o-y increase in its dividend (33% dividend growth since IPO) for FY24 at 8p/share (FY23: 7.55p/share) with dividend cover of 1.5x (FY23: 1.6x). There is significant headroom in the dividend cover to operate further out, even in a falling power price environment.
edisongroup.com/research/optimising-capital-allocation/33349/?j=185402&sfmc_sub=13315705&l=715_HTML&u=5451130&mid=536001663&jb=9
The Questor column in the Daily Telegraph has today tipped Brunner Investment Trust (which I hold). It's share price was up by 3% at 8:40 am today, probably due to the tip.
Scottish Mortgage Investment Trust (LON:SMT) bi-annual investor webinar 26 March 2024. Link to sign up here. I hold.
Looks like a bit of a shake out in India. I am fully weighted and no intention of selling-or buying more. But could be an opportunity for those not invested and like the India story. I hold India Capital Growth Fund (LON:IGC) Ashoka India Equity Investment Trust (LON:AIE) and JPMorgan Indian Investment Trust (LON:JII)
Hi Charles - what is causing the price drops over the last few days. Do you have any preference for the above three and why?
Private Investors - some funds closed to new buyers as concerned about froth in smaller companies- according to Times of India- which is worth following.
Kevin- This might be of interest- fcomments from manager India Capital Growth Fund (LON:IGC) https://www.indiacapitalgrowth...
I went to top up this fund but now can't buy any with IG group (LON:IGG).
Not too impressed with the Board of Regional REIT (LON:RGL) . It was a risky investment, but they have handled it very badly. I will be contacting them.
"Not too impressed with the Board of Regional REIT (LON:RGL) . It was a risky investment, but they have handled it very badly. I will be contacting them."
RGL chart showing some bullish signals with decent upside. Any further thoughts on this, am thinking of taking a punt based on chart, little or no research otherwise...
Got a limited response turbo. I am probably going to buy more to average down- I remain certain the board will have to do something to sort this out.
Seems to be breaking out as we speak, have bought some
I need to sell something-in a SIPP.
I am beginning to think Hipgnosis Songs Fund (LON:SONG) might be worth a small investment. They have now written assets down and I would assume the figures are now realistic. The cancellation of the dividend is bad news, but will the offer for part of the portfolio- rebuffed by shareholders now turn into a bid for the whole trust. Might suit the Manager ( backed by Blackrock) to get this sorry saga out of the public domain. Thoughts welcomed.
I sold out of my holding a few months back - it was a complete disaster and to me it seems like a huge gamble - anything could happen. Luckily it was a pretty small holding.
If everything goes your way then there is obviously money to be made, but I don't think it is as clear cut as this - I can see it wallowing around these lows for a long time. With no dividend it doesn't attract new investors seeking income and to my mind you could be tieing up your money here for a while.........but as you say it might work out.
I've lost too many times on these bets in the past so I will pass on this one - slow and steady is hopefully my new watchword.
I do understand that. I am thinking they (managers/blackrock) may just want to wrap this up.
I have bought a small holding, Read an Interview with Joe Bauernfreund of AVI in Citywire who have a holding- and were actively involved in discussions about SONG when the vote was held. AVI had increased their holding.
BoughtJPMorgan Indian Investment Trust (LON:JII) today. The large holding HDFC Bank share price has started to recover. I have been watching JII for a while- the hope is performance will improve under the new managers and the 17% discount will narrow as well. A tender offer for 25% of issued share capital at NAV less costs will trigger if the trust does not outperform the index by 0.5% by 1/10/2025 for the 5 years from1/10/2020.
Interesting Conversation on Investment Trusts in the following podcast :
Merryn Talks Money Podcast - Bloomberg
Thanks bsharman- just listened too-interesting.
Not sure what the conclusion of this report is , but I am not investing yet in China. https://www.bain.com/about/med...
I agree regards China. I keep coming back at it to take a look as it is decidedly cheap compared to previous times, but each time I delve a bit deeper and read of the potential outcomes it scares me away again.
There is too much risk in investing in a communist led country that has a history of heavily influencing their markets and the feelings of capitalist shareholders from western economies will be of zero interest to the main decision makers.
Therefore I continue to avoid, but I can see a scenario where if things improve it might be a safe time to put some money in that direction for a period of time to make some capital gains.
For anyone interested in listed Private Equity funds Edison have just issued a report- and there will be a webinar on March 14th at 16:00.
Digital 9 Infrastructure (LON:DGI9) As reported I bought this last month- just sold on the back of the Verne approval. There could be more in this but equally it could slip back over the next few days. I will be monitoring it, but happy with the turn I made.
Charles - I didn't sell out when news was announced - so am sitting on a nice quick but moderate profit, all thanks to you. The sale has now taken the imminent cash crisis off the table and paves the way for the wind down and expected capital return to investors. Surely a god time for folks to get back on board or for an initil investment? The discount to nav (OK, figures might not be spot on accurate) is huge, appreciate your thoughts.
Gore Street Energy Storage Fund (LON:GSF) I am baffled why the share price continues to fall given the board confirmation of dividend and the diversified portfolio-i.e not dependent on UK prices. This is either very cheap or I am going to take a hit in capital. If the latter happens questions will be asked of the Board I am sure.
Definitely in the same boat re Gore Street Energy Storage Fund (LON:GSF). If they really can maintain the dividend (and not telling porky pies) and have the benefits of international diversification it must be massively undervalued. Current discount to NAV is 42.5% and yield 11.63% (Source: AIC). Is it suffering from comparison with Gresham House Energy Storage Fund (LON:GRID) on a discount of 57% and Harmony Energy Income Trust (LON:HEIT) on an even bigger discount of 65%. So versus those not too bad!! Maybe investor sentiment is also concerned about increased competition/capacity from likes of Renewables Infrastructure (LON:TRIG) becoming more active in battery storage market. However, it doesn’t make sense to me but then not much does in the alternatives sector of the Investment Trust world!!
ACounsell If GSF are then I will be making complaints. To be honest nothing much make sense-some good funds on high yields- like Henderson Far East Income (LON:HFEL) . The market just seems disinterested. It was like this in the 1980's- an unloved sector and then came alive and discounts narrowed. I have not been involved in Corporate stuff in the sector for 30 odd years but if I was still I would be looking at the numerous opportunities to make some decent capital appreciation.
Henderson Far East Income (LON:HFEL) may be starting to bowl up, but its basic problem is that it hasn't managed any growth in 10 years. It has effectively converted capital into income, which for tax purposes is a disaster. I do wonder more generally whether the reduction of the amount of dividends that can be claimed free of tax has reduced demand for high-income trusts generally.
I ws given the impression by the Board in an announcement that they were aware of the issues you mention and the Managers had been shaken up. We will see.
Henderson Far East Income (LON:HFEL) addressed the poor performance at some length in their Results statement last November. Note this short section from it:-
Second, while we believe our broader strategy remains correct, we have sought to refine the process used to achieve our objectives. Given our income focus, income returns from stocks has been significantly undermined by the strength of sterling, especially over the last year. Our Fund Managers had sought to enhance income and offset sterling strength through portfolio rebalancing but this had a negative impact on capital growth. Our analysis has now led us to revise the way in which we capture dividends, an approach that has too often led to diminished capital growth. We have now largely restructured the portfolio to allow the renewed growth in portfolio company dividends to come through along with better capital growth returns. Through this transition period, we will use our distributable reserves to supplement your Company's dividend. In addition to maintaining a progressive dividend, re-establishing the Company's long-term record of capital growth will be a critical factor in restoring shareholder confidence. The Fund Managers' report will comment on this in more detail. Henderson Far East Income (LON:HFEL) NAV at 229p is up about 10% from the lows last year. I’ve held HFEL for years and not selling was a mistake as the big dividend has not coveted the capital loss. But with hints already of improved performance and their commitment to the dividend now doesn’t look the time to sell. After way underperforming the other Asian Income Trusts for so long, this year so far, HFEL is the top performer.albeit only with a 2% share price gain ytd. The dividend yield is still about 11%.One of the problems with GSF is that they keep on issuing new shares. They seem to have a policy of telling you what you are going to get, but once that has been achieved, whoops, you get an email asking you to subscribe. This has the effect of depressing the share price. You get your divi, but no, or very little, capital appreciation
Thanks everyone for you comments and opinions. Most welcome.
I note with interest the recent TU from HICL Infrastructure (LON:HICL) . I had thought for quite a time that leverage was getting a bit heavy.
This TU shows that the management and advisers have recognised this with the recently announced assets sales (at a premium - hurrah) together with rejigging (it's a nautical phrase LOL) of their debt from fixed to RCF or the like.
Hopefully investors will take the same positive thoughts from this and move th SP up a little awaiting a more hefty move when interest rates start to decrease
I hold
https://www.edisongroup.com/re....
positive report on Primary healthcare
Its worth noting that this is paid for research where PHP have commissioned Edison to write the report.
Probably unlikely to be critical.
Edison and Quoted Data both provide superb analysis of Investment Trusts. Yes they are paid but that doesn’t stop detailed comparisons sometimes with other Trusts in the sector and though they tend not to directly criticise they often provide information and figures where modestly astute readers of their research can see for themselves clear negatives.
The Edison research on Primary Health Properties (LON:PHP) posted by Chelsea is a classic example of their thorough analysis. Give me their research rather than paid for House Broker comment which can vary from very good to complete nonsense. E,g House broker positive comment on the rubbish blue sky share Bluejay Mining (LON:JAY) all the way down the 99% share price fall.
Re Edison
Edison states the following about its reports.
“All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified.”
I wouldn’t consider this to be “superb analysis”, but you are welcome to your opinion.
My point was draw attention to the point that the research was paid for and not impartial. A number of new investors might not have made this distinction.
I have no knowledge of Blue jay Mining or their advisors. The quality of their reports is completely unrelated to my post and does not make my comment any less relevant.
Fair enough to point out for the benefit of new investors that it is paid for research as is house broker comment and analysis.
I see the Edison comment you highlighted as a sensible disclaimer like disclaimers on Stockopedia.
Best for us to agree to disagree on the quality or otherwise of Edison and QuotedData analysis, and for anyone reading our posts to do the obvious thing and read their analysis and decide for themselves the quality or otherwise of it.
e.g the Edison Primary Health Properties (LON:PHP) analysis here:-
https://www.edisongroup.com/re...
apozniak.
I’ve never held Life Science Reit (LON:LABS) but it’s now looking yet another very tempting REIT so thanks for the prompt. Their results are on March 26th, and I’ll wait till then before deciding as I haven’t followed LABS closely up till now. That 51% discount IF Results confirm it’s far too wide, and 9% dividend if held as seems likely, might make LABS a screaming buy. Hopefully anyone reading this thread who holds, and/or anyone who knows more, will post.
I’ve never held Life Science Reit (LON:LABS) but it’s now looking yet another very tempting REIT so thanks for the prompt.
Recent market action and my data from sharepad suggest that there is inadequate dividend cover. I think a peek under the bonnet will also be essential in order to distinguish between genuine life science activity, i.e. labs and technical facilities, and normal office space occupied by life science enterprises. The latter has re-rated downwards significantly.
Second that - a dividend not covered (including '25), increasing losses and increasing borrowing too. I'm not suprprised the discount is so wide.
Thank you Charles. You and a few others provide a very useful and interesting discussion on the Investment Trust thread., but can anyone answer this? Stocko provides Stock Ranks for trusts such as MVI, AIRE, RLE and CRS all with a Market Cap of under 100k but fails to provide the same information for SMT, PCT,ATST, SSON, WWH, FEV, and ATT with Market Caps of over 1bn. Is there a reason for this?
I don’t know why Stockopedia provide Stock Ranks for some Trusts but not others.
As I’ve posted several times now, good though Stockopedia is for so many things, a big exception is their useless information on Investment Trusts. Some of the figures provided are irrelevant for Trusts (but always relevant for single Companies) and must know figures and information for Investment Trusts like NAV and discounts and premiums to NAV are not provided.
From memory (so please correct if wrong) Stockopedia used not to cover Investment Trusts and only did so after (misguided imo) pressure to do so from subscribers. The result is a mismash of iffy information like those Stock Rank figures where they are provided. How on earth are those worked out? Figures that matter a lot for single shares often don’t for pooled investments. The top 10 holdings and percentage held by the Trust in those top 10 are the simple basics provided by sites like aic and Trustnet.
As Charles Mitchell covered in the template post here, the best site for Investment Trusts is AIC. There, unlike here, there is a wealth of ACCURATE figures for each Trust and a wealth of must know information too. Other sites he and others have covered like the excellent weekly Moneymakers podcasts and daily Citywire updates are other must use sites imo.
Here’s the aic link for Commercial Property UK Trusts, a sector full of big dividend paying Trusts that have sometimes gone to exceptionally wide discounts to NAV. :-
https://www.theaic.co.uk/aic/f...
Then just click on the each Trust for a mass of information on that Trust.
From there every Investment Trust sector and every Trust in that sector can be checked out. A very few choose not to subscribe to AIC (it’s THE trade body for Investment Trusts) and then the detailed info is not available.
Thanks Ken. I share your views
There are Investment Trust bargains galore available at present. For any keen on big dividends while waiting for the upturn these 5 that I hold are well worth a look.
1. Bluefield Solar Income Fund (LON:BSIF) 105p. 8.4% dividend and at 22% discount. Share at 105p is at an undeserved multi year low See this extract for starters from a recent Citywire article for more on why it looks such a bargain:-
“Bluefield Solar Income (BSIF) fund manager James Armstrong has voiced frustration at the fund’s persistent double-digit discount as the board begins share buybacks.
Armstrong told Citywire that there was a ‘complete disconnect’ between the fundamentals of the £622m portfolio of solar, wind and battery assets, and the share price. It first derated after the spike in gilt yields following the October 2022 mini-Budget, and now trades at a 23% discount to net asset value (NAV).
Ironically, the widening of the discount last year came along with the fund’s record full-year earnings, which covered the 8.6p dividend twice over after debt amortisation costs and the electricity generator levy.“
And here’s the link for the full article:-
https://citywire.com/investmen...
These 4 REITS all look at bargain prices too.
REITS are interest rate sensitive. They are already starting to price in lower interest rates ahead. Chances are increasing (partly because of China deflation) of inflation falling further than gloomy Bank of England seem to expect. The REIT sector will start to price in interest rate cuts before they actually happen and that’s already happening.
2. Alternative Income REIT (LON:AIRE) 66p. 9.5% dividend. Discount to NAV is 20%. Share is up from 55p low last November.
AIRE is a small Trust is a sector where further amalgamations look likely and AIRE could be a tasty morsel for a bigger REIT. AIRE have just 19 properties and they are 100% let and 98.5% of rents are index linked.
Here’s another Citywire article for more info on AIRE:-
https://citywire.com/investmen...
3. Aew UK Reit (LON:AEWU) 84p. Discount has widened to 16%. Dividend yield 9.5%.
The share price has fallen to lowest level for 3 years recently for no obvious reason. It might be because the dividend is not fully covered BUT AEWU was the only REIT not to cut the dividend during the covid epidemic and they won’t want to cut it now. It’s become a badge of honour. AEWU is the best performing REIT and current dip looks a good entry point.
4. Supermarket Income REIT (LON:SUPR) 78p. 8% dividend and 22% discount. Up a bit from recent 71p low.
Here’s the aic link for the UK COMMERCIAL PROPERTY REITS:-
https://www.theaic.co.uk/aic/f...
5. Tritax EuroBox (LON:EBOX) 54p. Up from recent 47p and extreme fall to 45p last autumn. Still on a 36% discount.
If trying to buy Tritax EuroBox (LON:EBOX) note that it’s EBOX that is the one quoted in £ Sterling. Tritax EuroBox (LON:BOXE) is exactly the same EXCEPT that it’s quoted in EUROS.
Here’s the aic link for the COMMERCIAL PROPERTY EUROPE TRUSTS:-
https://www.theaic.co.uk/aic/f...
I hold BSIF and AIRE. Sold SUPR recently and bought more BSIF. I thought more chance of capital increase with BSIF than SUPR over the next few years. Also hold aHenderson Far East Income (LON:HFEL) for yield and hopefully nav growth.The board have stated dividend will at least be maintained.
I'm also a holder of BSIF and SUPR but I take a different view of capital increases as I am mindful of changing NAV values - I have a much larger holding of SUPR than I do of BSIF. Factors driving NAV returns for both couldn't be more different - BSIF assets are, by their very nature, always in a slow terminal decline; they are wearing out. The increase in inflation helps to slow that value deterioration process as it's increasingly more expensive to replace those assets so the old ones are retaining more value than they would otherwise do so, but decline they will. By contrast a lease on a supermarket property will be a full repair and replace model so the asset value will be safeguarded (save any unforseen increases in interest rates) and more likely than not will rise considerably as new builds will become increasing more expensive due to inflationary pressures. Sharepad has forcasts (consensus of brokers projections) for both co.s for '24, '25 & '26 and illustrates my point - NAV for SUPR increasing but NAV for BSIF decreasing. Of note it also has Turnover and Pre-Tax Profit increasing for SUPR but declining slightly for BSIF.
Also within the UK Commercial Property REIT sector what are people's views on @Life Science Reit (LON:LABS)? Circa 51% discount to NAV and 8.1% forecast yield. Share price may be bottoming-out after six months of decline?
Could be apozniak. I have been watching it- but given general falls across the board at the moment will continue to monitor. I would look into dividend cover etc.
The incompetence of the board at the currently suspended Asian Energy Impact Trust (LON:AEIT) knows no bounds. They issued an RNS consisting of a table of the resolutions voted on at the General Meeting held on 27 February.
However some spreadsheet wizz (!) had managed to add the votes for each resolution to the votes against to arrive at a number for the votes withheld!! Consequently a correction had to be issued where the votes withheld actually reflected the reality and were a lot of millions less!!! . I fear for the price of this ill fated trust when and if it returns from suspension and I will be heading for the exit as quickly as possible with whatever cash I can recover.
I see the dreaded Asian Energy Impact Trust (LON:AEIT) has relisted today. Not sure how to interpret a bid offer spread of 20- 40 cents (if Stockopedia numbers correct) other than no one wants to buy or sell. Guess will have to wait and see unless the spread narrows dramatically.
Anyone assist with the ticker for
WWH
BIOG
International Biotechnology Trust (LON:IBT)
These are easily searchable on the AIC website
I. hold RTW Biotech Opportunities (LON:RTW) post the acquisition of Arix. Hopefully given the row over the deal they will be trying to prove us that were negative on the terms wrong !
Another mystery to me at the moment is the weak share prices and huge discounts to NAV for abrdn European Logistics Income (LON:ASLI) and Warehouse Reit (LON:WHR). In the press this week SEGRO (LON:SGRO) was emphasising the strong demand for logistics warehouse (or Sheds as the industry likes to call them) and there is an ongoing bid battle for the logistics business Wincanton (LON:WIN) not to mention various mergers in progress between Property/warehouse related Investment Trusts. I appreciate that ASLI is up for sale but it does seem to have some attractive assets though they have cancelled the dividend for the current quarter which obviously doesn't help the share price. However, if there is such demand for these type of assets why are these two trusts performing so badly. Is it just down to higher interest rates and inflation or more specific factors?
AVI Global Trust (LON:AGT) which is one of the best actively managed "trusts of trusts" (I know they do direct investment as well) has just announced it has acquired 5%+ of Chrysalis Investments (LON:CHRY). I think there is huge value about to be unlocked there, all covered on its own thread.
I also see Universal Music NV (AMS:UMG) up strongly on results. As it is the biggest holding of Pershing Square Holdings (LON:PSH) that should help momentum to keep up there too. PSH up from £28 in October to £39 now, would all my investments so behave.
Any thoughts on the plunge in price of Aew UK Reit (LON:AEWU) ? Price is down from £1 to start the year to 84p today with forecast divi of 8p giving a yield of almost 10% now.
NAV stable at 106p since March last year.
sevenccc
No obvious reason why Aew UK Reit (LON:AEWU) share price has fallen so far. The share price hasn’t been this low since the covid falls. Fall is possibly because of risk of a dividend cut as it’s not quite covered. BUT Aew UK Reit (LON:AEWU) was the only REIT not to cut the dividend during the covid falls and they won’t want to break that record. fwiw I think a dividend cut is unlikely as these cut fears have happened before and they’ve always found a way round a cut. e.g via minor disposals.
I’ve luckily held since the big 2020 dip and have locked in the 13% dividend annual return unless there’s an unlikely cut. Anyone buying now is getting a very useful 9.5% yield and the lowest buy price for years.
We’re spoilt for choice with REIT bargains on big discounts and the sector is even more tempting now that sector consolidation is under way.
The discount is now around 16%, and the highest it has been for a good while, albeit still lower than most of the other REITS,
This is their most recent comment including on the dividend:-
https://www.theaic.co.uk/compa...
Thanks for creating this Charles, I don't contribute to this as my knowledge in this area is poor but am certainly a daily reader of your threads
The Investment Trust month starts well with the various announcements from Digital 9 Infrastructure (LON:DGI9. Forgive my irony! Inevitably the share price is down 10% this morning and I wouldn't blame Ken Mitchell for repeating his previous sell advice! I am sure the analysts will put together estimates of what the wind down might generate in terms of realisations but what with the delay to the Verne Global sale, the decision not to sell Arqiva at the moment, the need for further Capex, the small size/EBITDA of the other assets and the outstanding debt it looks to be a complete basket case! To cap it off they reported on the sale of a venture called Giggle (you really couldn't make it up!) which they invested £4.3m in only to sell to the management for £1 because it needed £150m of further investment. What on earth are the investment manager and the board doing! It smacks of total incompetence at best or at worst a failure in corporate governance. Don't suppose there is any legal redress in all this shambles though sadly in this case, unlike anything to do with misleading consumers, 'Caveat emptor' and DYOR will apply.
I don't accept that at all. I think there is legal redress and we need to chase Triple Point and the Jersey regulator on this point. I have today written the following email to triple Point: I would encourage people to write their own, or cut and paste mine. If we make enough noise I believe we will get this looked at. It is precisely why boards, investment companies and asset managers have insurance.
Send to
contact@triplepoint.co.uk
Dear
It is increasingly clear that the actions of the management and board of Digital 9 have been far below those expected of a listed investment company.
In particular, Digital 9 was marketed and classified as an investment trust. A key principle of investment trusts is that they operate on the basis of diversification and the spreading of risk. It seems unarguable that the problems at Digital 9 stem largely from the single decision to acquire Arqiva. It is unfortunate, but a risk that investors accept, if an investment company makes a bad investment that falls to zero. However, to make an investment that involved taking on significant debt, which has had the effect of destabilizing the entire company and leading to a firesale of all assets is, in my view, grossly negligent.
It is noticeable that professional commentators, such as Stifel's Sachin Saggar on last weeks MoneyMakers podcast, are increasingly saying that the management and board have failed at DGI9.
By way of background, I was for 10 years head of legal for BNP Paribas Offshore and prior to that spent a year at the Jersey Financial Services Commission, the entity that regulates DGI9, where my role was in developing policy for investment companies. This is by far the worst failure of corporate governance and investment management I have seen in that time.
I shall be seeking the views of fellow investors, and contacting the JFSC. However, can you confirm that Triple Point's insurers, and the insurers of both DGI9 and the board of DGI9, have been advised of the risk that a claim will be made against the insurance that you are required to have in place precisely to deal with gross incompetence and negligence of this sort.
Can you also ensure that any future announcements by the Company covers this insurance point, as for investors this may end up being the most valuable asset the Company holds.Yours sincerely
Hi Donald Pond,
Many thanks for sharing your relevant expertise and the excellent email. I will certainly be drafting an email to Triple Point using your email as a guide if that is OK. I am sure we are not alone in suffering significant loss but my £6K loss of a £7.5K original investment is certainly worth complaining about!
The more the merrier and since I posted a similar message on Twitter someone from the telegraph has been in touch. If we make enough noise people will notice. My particular bugbear is that Triple Point are getting paid based on an NAV that the market has no belief in.
All of these companies get insured up to the hilt and this is precisely why. A bigger car crash is hard to imagine!
Thanks Donald, I have emailed them.
Yes so have I.
Had a response from Triple Point to. the copy of your letter I emailed them. Investigating the complaint which they take very seriously.
I too had a response. They have to keep it as a formal complaint and notify the regulator. That is important, as it potentially means that the regulator (I used to work for them) will start applying pressure if they see a number of complaints.
Also had that response from Triple Point. I specifically raised it as a formal complaint as per their published complaints procedure so they are treating it as such which as you say is important/positive.
a bugbear of mine is that the investment managers are paid based on nav if they were paid based on share price they may try and work on the getting the share price up
Digital 9 Infrastructure (LON:DGI9) Not sure why the price has fallen to-day. I read the RNS as positive looking at Net cash of most of the investments ? Anyone got any thoughts.