Investment Trust- Thoughts (October 2024)

Scottish Mortgage Investment Trust (LON:SMT) Fund manager's thoughts after a trip to the Far East-https://www.scottishmortgage.c...

I do not currently hold but on my buy list. Just holding off to see what happens in the US election.

I have held North Atlantic Smaller Companies Investment Trust (LON:NAS) a few times in the past and have been looking at it again. It is a bit idiosyncratic to say the least but it is run by Christopher Mills, who has an excellent record.  1 year, 5 years and 10 years performance below. 

It is on a whopping 32% discount and the top 10 holdings as at 31 July 2024 are:

 As I said idiosyncratic!

They hold Odyssean Investment Trust (LON:OIT) and Oryx International Growth Fund (LON:OIG) which are both Harwood funds - not sure why they don't hold Rockwood Strategic (LON:RKW) - but perhaps there would be too much crossover with the other Harwood holdings. There is an investor meets company meeting coming up in a few weeks, which will be very interesting:

@ China Trade developments:  "China will eliminate tariffs for goods from countries classified as the world’s least developed starting in December, a move expected to lower shipping costs from parts of Africa and Asia and give Beijing more sway in global trade.The zero-tariff treatment for the group of mostly small, non-industrialised countries poses little threat to China’s manufacturing-intensive economy, analysts said, and gives Beijing an edge in emerging markets as the US and Europe attempt to stem the flow of Chinese goods into their own backyards." Full article from SCMP here

I spent a bit of time today looking into building a balanced PF to put a lump of money that I have taken out of my SIPP and will end up this week in an unsheltered General Investment Account.

Many of the potential holdings I have previously spoken about and they are a mixture of Investment Trusts, ETF's and Unit Trusts - I have always said that an outstanding manager of a Unit Trust could be worth paying the higher fees for.

The table shows the main 9/10 funds I will potentially invest in (first nine plus one of the UK funds) - I've also left in a couple of others I looked at but decided not to invest - the hurdle is in the right hand columns where I have put down the 6mth, 1,3&5 year returns.  The last column shows those I have left out - N.

I also looked at where the funds are invested across the world and have included two graphs - one showing the spread of investments by their sector ie. Global, Japan, Property etc, and the 2nd using the international spread for each fund ie. a Global Growth (GG) fund falls into the Global Growth Sector, but its specific investments will be from across the world and it is interesting to sometimes look at this - for example, a lot of GG funds have 60-70%+ in the US, but Ranmore Global Growth only has 24% in the US.

One area I am still sat on the fence is with regards to the UK.  Jpmorgan Uk Small Cap Growth & Income (LON:JUGI) is a  definite choice as I want some exposure to smaller companies.  But I was also looking for a larger cap fund.  I have narrowed this down to three options and would be interested in others thoughts;

Law Debenture (LON:LWDB) has some OK returns, but sits on a zero % discount.  In comparison Edinburgh Investment Trust (LON:EDIN) has slightly worse performance across most periods but sits on an 11% discount.

Then there is WisdomTree UK Quality Div Growth UCITS ETF GBP (LON:UGRW) which is a new ETF, but one that I am already invested in and am attracted by its low cost and its quality approach.

Anyway, thought this might be useful for others to look at and happy to receive any comments.  I am sure there are many other trusts, funds & ETF's that could do as well and might be worth looking at.

This is a split by Investment Country per each fund - where I have rolled up the overall PF exposure

Thanks for your great post SSB, your previous posts too and good to see you here from MW days, ditto kenmitch and some others.

I'm a bit disconcerted about your comment on VOF, VinaCapital Vietnam Opportunity Fund, although you do add that you do not really have anything concrete to back it up, even so, sometimes a gut feeling  can be right. 

Ken has responded, but only to say that VOF has disappointed of late, particular when compared to  the other Vietnam Trust. 

I hold VOF. Any way you can elaborate, or Ken your thoughts? You used to favour this one in MW days and i have held since then.  Are their holdings somewhat too concentrated and/or some illiquid stock?

dartagnan

One or two thoughts, maybe of interest to other subscribers....

Russ Mould of AJ Bell on the budget and debt rules, I always enjoy listening to this guy, talks a lot of sense. I bet I know the answer to whether the next addition of government debt will lead to better UK GDP figures :-)

https://tinyurl.com/nhfv7hm8

Andrew McHattie mentioned on the MM podcast a while back that the updates provided by Bellevue Healthcare Trust (LON:BBH) are a really good read. Fwiw, I tend to agree. Is it a buy though ? It's not obvious and I have come to the conclusion that when things are not obvious, it's best to add the ticker to a watch list and think about it some more. And wait for a better opportunity to buy. 

https://tinyurl.com/3deexkw5

Nick Train of Finsbury Growth & Income Trust (LON:FGT) is brutally honest about what is working and not working in his trust. Another good read IMO.

https://tinyurl.com/3ad8xtwc

The concentration in the trust is high. Very high! Top ten accounts for 88% of the total trust NAV. Gearing is only 1%.

And they are pretty much all high quality holdings in terms of ROCE and margin.

If there is a dip in the SP, I could be tempted to buy this trust. Lots of the sales are into foreign markets. Potential downside is that some of the valuations are not cheap.

I like the short podcasts by Edmund Shing of BNP Paribas. Lots of relevant fact and figures. Ken will particularly like the following 10 minute podcast as it talks about buying when there is most doom and gloom around.

https://tinyurl.com/283r62a3

btw Ken, thanks for posting that Vietnam article, it's a good read. A quick search on Google tells me the average PE for Vietnam is 15.

Looking at the constituents of VietNam Holding (LON:VNH), the individual PE ratios (from a quick Google search) are:

FPT Corp PE of 30

Mobile World Investment Corp PE of 21 

Vietnam Technological & Commercial Joint Stock PE of 8

Military Commercial Joint Stock Bank PE of 6

Vietnam Prosperity JSC Bank PE of 8

Asia Commercial Joint Stock Bank PE of 7

PetroVietnam Technical Services Corp PE of 17

Gemadept Corp PE of 19

IDICO Corp JSC PE of 10

SSI Securities Corp PE of 17

So a real mixture but nothing too expensive. But the discount has closed so I would not add more for the moment. In fact, the discount is the smallest it's been for 10 years.

And I'm not attracted by VinaCapital Vietnam Opportunity Fund (LON:VOF). In fact I'm a little suspicious of it but that is probably just me, nothing concrete to back up my thoughts here.

I really haven't bought or sold that much this year. I'm tempted by M&G (LON:MNG) and Record (LON:REC) for yield but wary of having too much in the financial sector.

I keep meaning to look at the India trusts that Charles posts on. Again, I'm put off slightly by the high valuations. The population argument is compelling though.  

I like this Citywire weekly Investment Trust summary, including the biggest weekly winners and losers.

https://citywire.com/investmen...

But I take numbers 4 and 5, their list of supposedly cheap and expensive Trusts with a pinch of salt as it’s only based on the weekly increase or decrease in the NAV discount. So Tetragon Financial (LON:TFG) on a discount of 62% is top of their “expensive” Trusts list! Tetragon Financial (LON:TFG) might well be a cr*p Trust, but if it is it’s cheap cr*p on a 62% discount. 

 Note the biggest faller this week was Schroder European Real Estate Investment Trust (LON:SERE)  as there were some sizeable sells. It leaves  Schroder European Real Estate Investment Trust (LON:SERE) as an even better buy imo with that big discounts and dividend and chance of corporate action including a bid. 

Charles posted the bullish latest monthly factsheet from VietNam Holding (LON:VNH) a couple of days ago. 

And VinaCapital Vietnam Opportunity Fund (LON:VOF) issued their annual Results on Thursday. Here’s the link:-

https://www.theaic.co.uk/compa...

They too were bullish on prospects for Vietnam. BUT as ShoeShineBoy has posted here there’s no doubt that some of their private investments have gone astray, resulting in an overall write down of 4% off NAV. This might well be explain the current big discount to NAV. 

Look beyond those negatives though and despite them,  VOF has way outperformed the Vietnam Index over 3 and 5 years. 

Both VietNam Holding (LON:VNH) and VinaCapital Vietnam Opportunity Fund (LON:VOF) are very positive on the outlook for Vietnam, including the Country bring faster growing than most of the World. 

For now Vietnam is an investment opportunity that still seems to have been recognised by relatively few investors. Far better to be in ahead of investors waking up? 

If the optimism about Vietnam is justified then we aren’t going to go wrong holding both VinaCapital Vietnam Opportunity Fund (LON:VOF) and VietNam Holding (LON:VNH.   The big current plus for VinaCapital Vietnam Opportunity Fund (LON:VOF) is that over 20% discount. That’s probably the bad news priced in, and as stock markets look ahead and not back, with VOF there’s a high chance of the double plus of a rising share price and narrowing discount ahead. 

Investor Meet Company-Trust meetings :

AEW UK REIT PLC
Investor Presentation
29th Oct 2024 at 2:00pm GMT

GRIT REAL ESTATE INCOME GROUP LIMITED
FY24 Results
30th Oct 2024 at 10:00am GMT

GRIT is not an Investment Trust- but is a fund giving exposure to real estate in Africa. 

Any views on here regarding investing in US small caps in the likes of iShares S&P SmallCap 600 UCITS ETF USD (Dist) (LON:ISP6) ?

,

More on 2 Investment Trust REITs. 

Phoenix Spree Deutschland (LON:PSDL. 

Migo Opportunities Trust (LON:MIGO) holds and included this comment on Phoenix Spree Deutschland (LON:PSDL) in their latest factsheet:-

“It’s encouraging to see the strength in the share price. Demand for rental properties in Berlin remains robust and open market prices have stabilised. We believe Phoenix Spree Deutschland (LON:PSDL) will be able to liquidate its portfolio at a useful premium to carrying value” 

And recent results from Phoenix Spree Deutschland (LON:PSDL) included this section for fuller explanation:-

“ Significant progress in strategy to accelerate condominium sales to €50m annually

· Negotiations with the Company's main lender, Natixis Pfandbriefbank AG ("Natixis"), to modify the Company's principal lending facility have concluded successfully.

· This will increase the number of buildings that are permitted to be sold as condominiums from 6 currently to 40, representing c.900 units.

· The Company is in advanced discussions to sell a portfolio of 16 rental buildings.

· The proceeds of the proposed portfolio sale will enable other debt to be repaid in full which will allow additional property collateral to be provided to Natixis, upon which the debt amendment is conditional, and will release cash to fund capital expenditure to optimise the sale values of condominium units designated for disposal.

· The company has engaged two leading Berlin condominium sales platforms to facilitate the expected acceleration in condominium sales.

· 10 buildings have been earmarked for the first condominium sales tranche, increasing the total number of condominiums that can be made available for sale from c.75 units currently to c.250 units by year-end 2024, with a further 24 properties expected to be made available for sale in H1 2025.

· Condominiums continue to sell at a significant premium per sqm to equivalent single rental building valuations. During H1 2024, PSD notarised 15 condominiums for sale at an average price of €4,292 per sqm. This represents a 23 per cent premium to the H1 2024 JLL Portfolio valuation and a 57¹ per cent premium to the Portfolio value implied by the current share price.

1. Implied premium calculated using a share price of 175p and a Sterling/Euro exchange rate of 1:1.20.” 

Note that for now the focus is on reducing debt and these condominium sales should provide the funds and get the current too high 46% LTV down. After that the focus can switch to increased returns to shareholders. 

For now Phoenix Spree Deutschland (LON:PSDL) is riskier than the other REITS  covered here. But the 35% discount to NAV reflects that risk. The longer term outlook looks very promising and already the share price has risen from 142p to 180p. That’s a useful gain since I posted on Phoenix Spree Deutschland (LON:PSDL) in early June.( I bought in May as a longer term lockaway). If the confidence about those condominium sales proves correct then there’s further substantial share price upside potential. 

Also today Aew UK Reit (LON:AEWU) updated. NAV is up for the second quarter running and now up to 109p. (Share closed at 98p today). The dividend is now fully covered.

Here are the highlights from their trading update today:- 

Highlights

· NAV of £172.76 million or 109.05 pence per share at 30 September 2024 (30 June 2024: £167.79 million or 105.91 pence per share).

· NAV total return of 4.85% for the quarter (30 June 2024 quarter: 5.04%).

· 2.94% like-for-like valuation increase for the quarter (30 June 2024 quarter: 2.41% increase).

· EPRA earnings per share ("EPRA EPS") for the quarter of 2.68 pence (30 June 2024 quarter: 2.26 pence). Underlying EPS of 2.17 pence (30 June 2024 quarter: 1.92 pence).

· Interim dividend of 2.00 pence per share for the three months ended 30 September 2024, paid for 36 consecutive quarters and in line with the targeted annual dividend of 8.00 pence per share.

· Loan to GAV ratio at the quarter end was 25.04% (30 June 2024: 25.66%). Significant headroom on all loan covenants.

· Company continues to benefit from a low fixed cost of debt of 2.959% until May 2027.

· Disposal of Oak Park, Droitwich, for £6.30 million, reflecting a 33% premium to the 31 March 2024 valuation.

· Three new lettings increasing annual contracted rent by £598,470 per annum.

And here’s the aic link for the full trading update:-

https://www.theaic.co.uk/compa...

I’ve  held Aew UK Reit (LON:AEWU)  since 2020 when buying at 63p and it has been in the INVESTMENT TRUST VIRTUAL PORTFOLIO since 2020. 

The dividend has been held at 8p since 2020:Aviva (LON:AV.)   and for 36 quarters in a row …..still a very good 8.5% yield and an even better 13% at that 63p buy opportunity. At the time of my Aew UK Reit (LON:AEWU) and other REIT buys  then, the discounts were huge and comment on the REIT sector negative. That so often  turns out to have been a good time to buy. 

Aew UK Reit (LON:AEWU) has bounced from recent dip to 90p. Another dip woukd give a better buy opportunity and a bigger dividend yield. It’s a quality REIT. 

VietNam Holding (LON:VNH) I hold- and is a core long term holding. September report just out. "There is no doubt this helped keep Vietnam’s projected GDP growth for 2024 in the range of 6% and 7%, which stands out globally. The IMF currently forecasts 6.1% growth, it says is driven by strong external demand, resilient foreign direct investment (FDI), and supportive fiscal and monetary policies. HSBC recently raised its forecast to 7%, highlighting Vietnam’s robust Q3 performance in 2024, especially in manufacturing and exports, which have shown significant recovery, particularly in sectors like electronics, textiles, and footwear."

Full report here

Scottish Mortgage Investment Trust (LON:SMT) portfolio update

Investor Meet Company AEW UK REIT PLC will be holding a Investor Presentation meeting on 29th Oct 2024 at 2:00pm GMT.

Investors in China might want to look at this article about a recent trade fair. I will be selling my China ETF partly due to this and the possible reaction to a Trump victory. 

"But those interviewed by the Post at the Canton Fair said they were having to accept the reality of emerging markets becoming increasingly important for the survival of small and medium-sized Chinese exporters – even though that can mean reduced profits and more payment risks."

https://www.scmp.com/economy/g...

Augmentum Fintech (LON:AUGM)

Castelnau-owned Dignity buys digital will-writer Farewill for £12.9m in a share-for-share deal that gives Augmentum Fintech a 0.4% stake in Gary Channon’s special situations trust.

https://citywire.com/investmen...

Chart from last weeks SHARES magazine (from AJ Bell) which Dividend seekers might be interested in.

The care home REITS haven't recovered as much as I would have hoped, especially with interest rates on the decline. I hold Care REIT (LON:CRT) (was Impact Healthcare) and Target Healthcare Reit (LON:THRL) - both offer good yields at this level. The other one that is at lows and I hold is Supermarket Income REIT (LON:SUPR) - any thoughts on these three? I am considering topping up and locking in the high yields. These 'should' be relatively safe areas of the market...?   

Oakley Capital Investments (LON:OCI) I hold and one of my long term holdings. Quarterly results just out. 

Robust portfolio performance offset by currency headwinds

Highlights for the three months ended 30 September 2024

Investor Meet company HICL INFRASTRUCTURE PLC will be holding a Interim Results meeting on 20th Nov 2024 at 12:00pm GMT.

Please click on the button below to accept the meeting invitation.

Just to say that Augmentum Fintech (LON:AUGM) might be issuing a factsheet very soon. It was on October 24th last year. It might just give the share price a lift at last. 

I’ve pasted below a post I did after their Results that sent the share price up to 120p. It’s now nearly 30% lower for no obvious reason AND is on a bonkers 42% discount to NAV. I added a few more today at a bit under 97p. 

I don’t think there’s been anything negative reported since I posted in June. So why the big share price fall? Possible that it’s partly investors tired at the awful share price along with no dividend to compensate so they might have lost patience and sold. 

Augmentum Fintech (LON:AUGM) are buying back 15% of their shares. So far the result has been a widening of the discount those buybacks are intended to narrow. Wish Trusts buying back  would question more than they do whether it is good use of that money. 

 Here’s that post paste:-

“My thoughts on AUGM. Is any of it wrong? 

Augmenttum Fintech (LON:AUGM) is at a stunning bargain price, with the only obvious problem being investors, as is the case with too many Investment Trusts on big discounts to NAV, still not recognising this.

Note the first bit of their Portfolio highlights update today; their top 3 holdings plus cash covers almost all the current market cap with all the other often quality holdings doing well, in the share price for free.

Also all exits from the portfolio so far have all been above the last reported value and have realised £89.6 million proceeds compared with about £34 million originally invested in them.

AND NAV is up again to 167p, yet Augmentum Fintech (LON:AUGM) can be bought for just 115p. Don’t know how long before investors wake up or before it attracts a bid or amalgamation, but it looks a steal as a lockaway buy. I hold but only with modest 5% gain ….so far.

Portfolio highlights

The valuation of the top three positions (Tide, Zopa Bank and Grover) plus a strong cash position, was just below Augmentum’s £170 million market capitalisation at year end. These three companies have grown revenues by an average of over 1,300% since initial investment and are either profitable or expected to reach profitability without further funding.

Top 10 holdings, which represent 81% of portfolio value (31 March 2023: 78%) grew revenue at an average of 65% year-on-year (31 March 2023: 117%) and are cash generative (five positions) or have an average of 203 months cash runway.

Cushon’s majority shareholding acquisition by NatWest Group completed during the period, and returned £22.8 million to the Company, delivering a return of 2.1x multiple on invested capital and an IRR of 62%.

Post year end: exit from Onfido through the acquisition by Entrust, delivering a return of 1.3x on invested capital and an IRR of 5.8%.

There have now been six exits from the portfolio since inception all at or above their last reported value, which have realised a cumulative £89.6 million in proceeds – £55.9 million over their original cost (c2.7x invested capital).
IRR of 16%4 on invested capital since inception (31 March 2023: 18.5%).”

I hadn't listened to The Twin Petes Investing podcast for some time but I was pleasantly surprised by this edition focusing on investment trusts:

https://tinyurl.com/4ewpbky7 

# Discussion on trusts starts on 10 minutes.

# Donal Pond mention on Digital 9 Infrastructure (LON:DGI9).

# Not the same outcry on Digital 9 Infrastructure (LON:DGI9) as Woodford open ended fund being gated.

# Good point made on not going for very high yield + high discount. SSB: I always think something smells when I can buy a trust on a high discount AND a high yield, it usually doesn't end well.

# Oldest investment trust F&C Investment Trust (LON:FCIT) up +18% over the last 12 months SSB: driven by large cap US tech names but trust is available on a 10% discount.

# Caledonia Investments (LON:CLDN) gets a mention (41 minutes). SSB: I have bought this trust twice but I'm underwater on it at the moment. Only -3% but when pretty much everything else is doing well, it's disappointing. I still hope Caledonia Investments (LON:CLDN) is a long term holding for me.

# Home Reit (LON:HOME): what a mess! SSB: not a trust that I know a lot about but I will stay well clear. Not a great chart!

Anyone know why Schroder European Real Estate Investment Trust (LON:SERE) dropped by more than 5% on Friday?  They stated earlier this month that the valuation of the portfolio had now stabilised so it's not clear why the big drop which as a consequence takes the annual yield back over 8%.   I'm tempted to buy some more on Monday. Thoughts anyone?

GSF released news yesterday concerning their interest in California, which sent shares about 6% up from an atl.

Gore Street Energy Storage Fund PLC 12-year Fixed-Price Stackable Contract Secured - ADVFN

The RA contract is similar to contracts in the Great Britain ("GB") Capacity Market in that it is a long-term contract which is fully stackable simultaneously with other revenue streams. However, the RA contract is worth a substantially larger portion of the total revenue in this market. It is expected to account for up to 40% of the total expected revenue of the asset over the contract life. Due to the long-term fixed-price nature of the contract, it also supports securing project-level debt.

This long-term fixed-price stackable contract will significantly enhance the Company's total revenue generation whilst further diversifying revenue streams and providing further stability. It also supports the Company's long-term ability to continue distributing dividends to shareholders.

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The share suffers from what I think of as  "the DG19 effect"; and recently lowered its dividend from 7.5% to 7% of NAV, which  it consider  sustainable and implies a annual payout of 13% based on a discount to stated NAV of 48%.

Gore Street Energy Storage | The AIC

I hold at 3.5% of the Bruciefolio,  almost 13% down on my average buy in price.

Very good and upbeat article on Vietnam here:-

https://vir.com.vn/foreign-inv...

I’ve posted the plus case for Vietnam several times this year and it remains a top choice imo for anyone looking to use Investment Trusts as a way to invest all round the World. The above article reinforces the plus case. 

VietNam Holding (LON:VNH) and VinaCapital Vietnam Opportunity Fund (LON:VOF) look the best way to play it but the other Vietnam Trust Vietnam Enterprise Investments (LON:VEIL) is also at least worth checking out.   There’s been quite a bit of discussion on these Investment Trust threads on the merits of VietNam Holding (LON:VNH) over VinaCapital Vietnam Opportunity Fund (LON:VOF). I hold both and over many years both have had spells of outperforming the other. This year itVietNam Holding (LON:VNH) that has done by far the best, which means ot might soon be the turn of VinaCapital Vietnam Opportunity Fund (LON:VOF) to win more investor support.But I get round all this by holding both, and have held both long term. 

VietNam Holding (LON:VNH) was up 22% year to date when I last checked the figures, and up 30% over 1 year and 148% since June 2006. 

VinaCapital Vietnam Opportunity Fund (LON:VOF) is only up 5% year to date and 10% over 1year but 300% since June 2006 and 700% since it listed. 

It’s the big 23% discount to NAV for VinaCapital Vietnam Opportunity Fund (LON:VOF) that’s largely behind the poorer share price performance as VietNam Holding (LON:VNH) is currently more popular with investors and only on a 4% discount. 

Latest NAV for VinaCapital Vietnam Opportunity Fund (LON:VOF) (they report NAV every day) is £6.12, yet the share can be bought for 476p. 

Here are the top 10 VOF holdings.Note that like VietNam Holding (LON:VNH) they have a concentrated TOP10 including 10.8%  in high flyer FPT. 

https://www.theaic.co.uk/compa...

And here are the VietNam Holding (LON:VNH) top 10 with even more (13%) in FPT:-

https://www.theaic.co.uk/compa...

And don’t forget to read that Vietnam article! Here’s the link for it again:-

https://vir.com.vn/foreign-inv...

Contrary views very welcome as always. 

Hi just an observation but if anyone has investments on more than  1 platform then differing fee structures can be interesting.

EG  -  HL annual charge 0.45%. on funds ...but 0 on shares Including UK and overseas shares, investment trusts, exchange-traded funds, VCTs, gilts and bonds   !     On bigger values that can make a difference. 

Conclusion - HL originally in the old days grew on fund investing but is not a great place for funds these days.   

India Capital Growth Fund (LON:IGC) has had a disappointing performance over the last 4 months. I was thinking of switching, but given it still tops the 5 and 10 year AIC returns table for the Indian sector, I will hold-though at 1.57% fees are the highest in the sector by a way. JPMorgan Indian Investment Trust (LON:JII) still lags , but with a discount of 21.37% and the prospect of buybacks if performance is still this poor it might be worth a punt. abrdn New India Investment Trust (LON:ANII) is on a discount of 20% despite being the top performer over 1 year.   India will be volatile but from what I read the economic prospects still look very promising. Maybe the answer is to hold all 4 trusts- I hold Ashoka India Equity Investment Trust (LON:AIE) already.

Seraphim Space Investment Trust (LON:SSIT) ( I hold)

Rethaer that summarize I have pasted key points (in my opinion). This is I think a really interesting company. Maybe not one I would be overweight in, but certainly worth a modest investment if you think what is being done in the space sector is both exciting and potentially very useful. 

Full Year Highlights

· Portfolio valuation up £14.1m to £201.5m at 30 June 2024, driven by additional investments, increased fair value net gains and minimal FX gain.

· The private companies in the top 10 holdings (81.8% of the overall portfolio fair value and 72.2% of NAV) collectively saw their revenues increase year-on-year by an average of 71% (in Sterling) and 224% (on a fair value weighted basis).

· 77% of the portfolio by fair value has a robust cash runway, with 60% fully funded and 17% funded for 12 months or more from 30 June 2024, based on management projections and including raises completed post period end.

· Approximately $540m raised by the private portfolio during the year.

· £11.0m deployed in four new portfolio companies (including the in specie £3.8m investment into Seraphim Space Ventures II LP) and six existing portfolio companies.

· SSIT sold its interest in nine early-stage companies to Seraphim Space's new early stage venture fund.

· Cash balance of £27.0m at year end.

Major milestones

· SatVu (4.9% of NAV): Successfully launched and commissioned its first infrared imaging satellite.

· Tomorrow.io (1.7% of NAV): Demonstrated unprecedented accuracy of weather data from its pathfinder satellites.

· Voyager (1.0% of NAV): Agreed to partner with Airbus, Northrup Grumman and Mitsubishi on its Starlab space station.

· AST SpaceMobile: Signed commercial agreements with both AT&T and Verizon to provide the company's first space-based broadband network directly to cell phones of their subscribers.

· Spire Global (NYSE: SPIR, 1.1% of NAV): Announced collaboration with Nvidia to further advance the company's AI-driven weather prediction capabilities.

IPOs, M&A, exits

· Astroscale (TYO: 186A, 1.7% of NAV): Completed oversubscribed JPY23.8bn / $153m IPO on the growth market of the Tokyo Stock Exchange.

· HawkEye 360 (9.4% of NAV): Completed the acquisition from Maxar Intelligence of RF Solutions, a provider of secure, precise, geospatial intelligence.

· Seraphim Space Ventures II (1.7% of NAV): SSIT sold its interest in nine early stage companies to Seraphim Space's new early stage venture fund.

Setbacks

· SatVu (4.9% of NAV): Experienced an issue on its first satellite after six months of operations which led to a failure of the satellite; two additional replacement satellites have since been ordered.

Will Whitehorn, Chair of Seraphim Space Investment Trust plc, commented:

"The year to 30 June 2024 was one of significant milestones for both SSIT's portfolio and the space sector as a whole. The heightened role of SpaceTech in the context of geopolitics continues to grow apace. In the last year, this has seen countries pushing for sovereign space capabilities not just in orbit, but increasingly on the moon too. With the commercial sector playing an ever-greater role in delivering these capabilities to nation states, many of SSIT's portfolio companies are well aligned with servicing the growing demand from government customers. This has enabled 17 existing portfolio companies (12 of which are private and five of which are publicly traded) to raise c.$900m in additional funding (including further closes on previous rounds) between them during the year, ensuring that the portfolio is well capitalised to continue its positive trajectory.

The Company has both boosted its available liquidity and reduced the number of holdings that could require additional capital through the combination of the disposal of nine early stage holdings and the IPO of portfolio company Astroscale. With six portfolio companies, representing 60% of the portfolio by fair value, now indicating they are fully funded, the Company's reserves are expected to be sufficient to continue to meet the needs of the portfolio during the year ahead whilst enabling the Investment Manager to continue to seek exceptional new potential additions to the portfolio."

Mark Boggett, Chief Executive Officer, Seraphim Space Manager LLP, said:

"Once again, the portfolio has defied the difficulties of the wider macroeconomic climate by collectively managing to raise c.$900m from both the private and public capital markets over the course of the year. This is a testimony to the portfolio's enduring attractiveness to both other existing investors and new investors that such substantial levels of capital raising were achieved.

Besides these high levels of fundraising activity, the underlying performance of the portfolio was also encouraging. Buoyed by increasing demand from government customers, the private companies within the top 10 holdings (which together constitute 81.8% of the portfolio fair value and 72.2% of NAV) collectively saw their revenues increase year-on-year by an average of 71% (in Sterling) and 224% (on a fair value weighted basis).

On the back of such growing revenues and recent fundraising activity, we are pleased to see that the portfolio is largely well capitalised, with some of the Company's largest, more developed holdings now projecting that they have sufficient cash to reach profitability. Taken together with the increased potential liquidity represented by the listed portfolio, this strengthens our view that SSIT will continue to have adequate resources to support the needs of the portfolio as required over the year ahead."

Digital 9 Infrastructure (LON:DGI9) NOnly a small amout relative to fees but something from the new managers.

Purchase of Shares by members of InfraRed Capital Partners Limited

Further to the Company's announcement on 11 October 2024, the Board of D9 is pleased to announce that James O'Halloran and Richard Crawford (together with his spouse) have each purchased 600,000 Ordinary Shares in the Company. James and Richard are, respectively, a partner and senior adviser of InfraRed Capital Partners Limited ("InfraRed").

These purchases further align the interests between InfraRed and D9 shareholders.

The appointment of InfraRed as investment manager and AIFM is subject to regulatory approvals and third-party consents and the Board anticipates the appointment will become effective in Q4 2024.

Vietnam. I hold VietNam Holding (LON:VNH) and VinaCapital Vietnam Opportunity Fund (LON:VOF) .

Read this article today- link is to the SCMP full article. I remain confident about the future for Vietnam who seem to be able to work with a fellow -large-communist country and maintain excellent relations with the US/West

"Li’s visit to Vietnam is his first trip to the country since taking office in March last year. It is also the first by a Chinese premier in 11 years.

Vietnam and China signed 10 agreements ranging from agriculture cooperation to cross-border QR code payments on Sunday and signed a document on updating progress on cross-border railway links, Reuters reported.

“China is willing to continue to make bigger the pie of economic and trade cooperation with Vietnam,” Li told Lam during their meeting on Saturday, according to Xinhua.

He said he hoped that the two sides would simultaneously promote the “hard connectivity” of rail, expressway and port infrastructure.

Li also pledged that China would further open its market to Vietnamese agricultural products and support the establishment of Vietnamese trade promotion offices in China, according to VNA."

https://sc.mp/curym?utm_source...

Harbourvest Global Private Equity (LON:HVPE) - I hold, but am frustrated...

5/9/24. Investor Meet Company: HVPE – FTSE 250, now 17 years on LSE with $4.3bn NAV, largest diversified fund of funds on the market. Large range of investments, more than 1,000 across range.

Essentially a tracker fund for global private equity, good performance over long term cycle, stagnant recently, making limited efforts to narrow the discount, see best opportunities in Europe. Distribution pool concept introduced for the long term, forecasting 2024/25 $150-250m buyback allocation and considering other options for distribution.

I have been a patient holder here, and not well rewarded over recent years. Discount has been sitting at between 35% and 40%, currently closer to 40%. Recovery always seems to be just around the corner and the Manager continues to profit handsomely from being remunerated on NAV basis. Perhaps I would be better selling and increasing my position in Oakley Capital Investments (LON:OCI) and HgCapital Trust (LON:HGT) with much more focused portfolios?

Meeting notes:

13.2% annual NAV growth rate over last 10 years, but company recognizes this has not passed through to share price recently.

Structure: Fund of funds only investor. 50% of the portfolio is in primary Harbourvest funds, 30% Harbourvest secondary funds (i.e. launched 5 + years ago). Total of 14,000 investments, of which 1,000 are of material size.

What have they been doing?

• Ø Increasing use of credit facility as negative cashflow YTD (i.e. realisations less than new investment)
• Ø YTD end July 3% NAV growth
• Ø Scaling back new commitment
• Ø Dedicating more resource to promote company
• Ø Have new capital allocation approach, buying back great pool of shares
• Ø Capital allocation includes new distribution pool mechanism, published monthly. 15% of cash coming in from realisations going into the distribution pool for buybacks
• Ø Expecting higher level of exits going forward

Performance

• Ø 10 years was very strong up until 2022
• Ø Since 2022 lack of growth, venture capital has lagged since 2022, but seen strength in infrastructure and private credit. Factors working against each other.
• Ø Discount to NAV has widened over the full period, committed to driving down discount – apparently!

Portfolio composition

60% Buyout at present - aiming to 55%

31% Growth equity

9% mezzanine and infrastructure – aiming to get this to 15% as feel risk reward is good

Geographically aiming to increase Asia Pacific allocation.

Vintage profile

Reduction in realization means there is a backlog in exits, even though they generally invest in all vintages to avoid being too heavily weighted to any particular year or period.

Uplifts

Average of 52% uplift on exit since analysis began in 2012. However, these premiums have come down to 25-30% in last few years.

Private Market Observations in Europe

• Ø Exits have been flat, so trying to become more creative in generating liquidity to allow original investors to get out. Continuation funds
• Ø Fundraising still slow, but capital favoring larger and known partners. Elongated process in comparison with 2020/21
• Ø Growing willingness to trade at sensible valuations, best assets still trade at premium
• Ø Large amounts of dry powder, expect 2025 to be better with improved deal making conditions
• Ø Slower activity levels in healthcare and consumer, vs business services or technology
• Ø European market has a lot of opportunities due to fragmentation (vs USA), greater mid-market, digitalization is behind USA

Everyone.

Does everyone realise that good though the stock pages are for shares they ARE USELESS AND CAN. BE DOWNRIGHT MISLEADING FOR INVESTMENT TRUSTS.

Apologies for shouting like that but I’ve made this point several times yet it’s clear from a few posts here that some subscribers don’t realise this.

I’ve never backed this up by giving examples so I will in this post.

1. Most of the figures on the stock page are irrelevant for Investment Trusts and some lack any reality. Yet must know info like NAV and discounts to NAV are not there.

2. It’s easy to check to see this for ourselves after these few examples:-

STOCK RANKS.

Rockwood Strategic (LON:RKW) a very successful and high quality Trust (though arguably not a buy at the current price) has a stock rank of 41.
Yet Amedeo Air Four Plus (LON:AA4) which is much lower quality and with the risk of significant capital loss (though that risk is reducing) scores 85. That’s plain bonkers.

COMPARISON WITH SIMILAR.

Scroll down to that section to see that the stock page suggests that Blencowe Resources (LON:BRES) and GS Chain (LON:GSC) are shown as similar to Rockwood Strategic (LON:RKW) . I’ve never heard of either of them! They are NOT Invrstment Trusts and nor are the others supposedly similar. What’s more BLENCOWE has a stock rank of 1 and GS CHAIN scores 5. How can shares like that including “sucker shares” be considered to the exceptional ly high quality Rockwood Investment Trust?

For Comparisons we need to check other Investment Trusts in the small company UK sector and not rubbish single shares. e.g for Rockwood on links/sites like aic. This link brings up proper quality information on all the UK smaller Company Trusts.

https://www.theaic.co.uk/aic/f...

If anyone still isn’t convinced then check further. e.g high flying Vietnam Investment Trust VietNam Holding (LON:VNH) is apparently similar to Seraphim Space Investment Trust (LON:SSIT) and the first one listed as similar is CQS Natural Resources Growth and Income (LON:CYN) which I hold and which is a Mining sector Trust. How on earth is that similar to a non resources Vietnam Investment Trust? I

AND even more remarkable and farcical is Amedeo Air Four Plus(LON:AA4) an aircraft leasing Trust supposedly being similar to a series of banks.

Stockopedia used to exclude Investment Trusts from their stock pages, and that was the correct decision. Unfortunately Stockopedia responded to requests from subscribers to include Investment Trusts. Don’t know how much that cost Stockopedia but it was a waste of money and they ended up with very bad and very unreliable information. . There are other sites like aic and Trustnet that are excellent for Investment Trusts. Those are the sites to use.

0

For those interested in Investment Trusts... I attended the Aurora Investment Trust (LON:ARR) Investor Evening last week, and found it really interesting and illuminating.

I wrote up my notes here if anyone was unable to attend and wanted to find out what was presented: https://boonfund.substack.com/...

I focused more on what I could learn as a private investor, rather than the Trust itself; so for example, didn't take notes about the impending Artemis M&A.

Another email to the Board of Digital 9 Infrastructure (LON:DGI9) . For clarification I am fortunate that I only bought in at 22p and had just before then bought and sold at a small profit-again in the low 20p's. So not one of the big losers in this badly managed company.

Dear Board
I am disappointed to see that you have spent further shareholder funds with Panmure Liberum to conclude we need a new manager.
Quite why when the company is winding down is surprising. Surely the board could self-manage this wind down ? If not, with respect, I can only conclude the board composition for a specialist trust like this is wrong.
So your have committed the company to 3 years of fees at £3.75m per annum, then £1.75m until last asset sold. How long is this process going to take, had Triple Point advised the purchase of such poor assets that they are not saleable ? Did no-one on the previous board question the investments?
Given that InfraRed know Arqiva could you not just have sold it to them/asked them to find a buyer ? Although I cannot see it in the HIFL portfolio, so not entirely sure how they have such detailed knowledge of that company ? There is no mention of this on the Infrared site announcement of their appointment as managers of DGI9, which also mentions a competitive tender process. What other managers were considered?
This is a very sorry situation where shareholder value has been destroyed. Triplepoint deny they valued the assets and say the Board did with the help of an independent valuer. Can you name the independent valuers the company has used please-both recently and in the past.
Quite why your are still having to negotiate with Triple Point to end the contract with them is beyond most of us small shareholders. They have managed the affairs of the company appallingly.
The Board have obviously decided to plough ahead with this new manager without even considering asking shareholders what they felt was the best course of action by way of an EGM.
I am , and I am sure many other shareholders are, extremely disappointed and frustrated by this action
Regards

On Digital 9 Infrastructure (LON:DGI9) :

Current market cap around £160m. It owns 2 main assets - the earn out of Verne and a big chunk of Arqiva - and a few smaller assets that are being sold. We cannot add any value to the earnest so really, it is one asset.

The new manager gets £3.75m a year for 3 years. Plus £100k a month after all the assets have been sold! So a minimum of £12m for putting a person on the board of Arqiva.

DGI9 itself has 4 directors, so I would prefer the company to be self managed, with a board of 3 directors, one of whom knows enough about infrastructure to look after Arqiva. I'm sure you could find someone to do this for £300k.

So I think it is just another chapter in a shameful story of the city squeezing every drop out of investors.

Hi Charles and all,

I hold Syncona (LON:SYNC) on the hope of a recovery and the number of late stage clinical assets they have being historically high (close to capital event).  I think they are presenting today and you may hold?  If you get a chance to watch would you mind sharing any thoughts?  
unfortunately I’m stuck at work !

Anyone going to the AIC Trusts  convention in Shoreditch London today??

Graham. 

Digital 9 Infrastructure (LON:DGI9)
The Board of D9 is pleased to announce that it has entered into an agreement to appoint InfraRed Capital Partners Limited ("InfraRed") as the Company's investment manager and AIFM in charge of implementing D9's previously announced managed wind-down.

Read the RNS, fee to infra red of £3.75m p.a for 3 years, then reduced by half. Plus a fee on realising assets. I need to look into this a bit further as Infra Red manage Renewables Infrastructure (LON:TRIG) and HICL Infrastructure (LON:HICL) .

Hopefully with their experience we might see some movement to realise assets and pay debt off before returning funds to shareholders. Doubt we will see it but would be interesting what Infra reds review of historic valuations/purchases history by Triple point says. Although as reported Triple point deny coming up with the NAV, and having 2 directors on the board did not influence.

Not heard back from the Board re insurance against negligence yet.

Charles mentioned that 3i (LON:III) looked way overvalued. Surely he’s right with 3i now on a 49% premium. Why would anyone want to pay far far more than the share is worth? 

The same applied not long ago with Lindsell Train Investment Trust (LON:LTI) when at an even bigger premium. Key  Manager Nick Train warned several times that his Trust was way overvalued…….and sure enough that was ahead of very big share price fall as it went from that big premium to a discount, Hogh chance the same will happen with 3i (LON:III)

If looking for value and relative safety then imo the REIT sector fits that bill. I hold several and there’s a case for going for those paying big dividends while we wait for share price gains. 

Supermarket Income REIT (LON:SUPR)  8.2% dividend and 18% discount to NAV. 

Alternative Income REIT (LON:AIRE) 8.4% dividend and 13% discount

Aew UK Reit (LON:AEWU)  8.4% and 10% discount….which has widened a bit. 

I hold all 3 and Schroder European Real Estate Investment Trust (LON:SERE) still paying about 8%. 

Tritax EuroBox (LON:EBOX) still in play with improved offer of 69p by Brookfield.  I still had a small holding as was happy to hold SEGRO (LON:SGRO) .

Be interesting to see what happens next here!

I have been referred to this discussion group ( and having read through some of the contributions find it really interesting and informative largely because the views expressed re: Investing are very closely aligned with my own having started my investing career by saving £50 a month into both TEMIT and F&C when my first child was born in 1993 - and being very happy with the investment results - I still hold both IT's today) by Ken Mitchell following a post I made on the SCVR yesterday re: Amedeo Air Four Plus (LON:AA4.

Ken asked me to repost on here which I am happy to do and look forward to reading others' views on both AA4 and other IT's.   Here is the post ( it was in response to an earlier post from Ken):

Ken,

re: Amedeo Air Four Plus (LON:AA4) - you are correct the 16p of divi's are locked in although the company has stated it is undergoing a full strategic review with its asset manager and other advisors the results of which it will announce before the calendar y/e quite possibly when it announces its half year results in December. They are certainly locked in based on their expected cashflows for the next two years although the strategic review could result in a decision to sell one or more of the assets ( with associated leases attached) and then the divi position may change.

I got involved in this sub 40p last year and viewed it as an investment with a relatively low risk on the downside ( 24p of divis out of secure cashflow) before the first of their lease mature. I saw and still see the upside potential - much more difficult to quantify due to the lack of visibility of residual value assumptions made by AA4 at the end of the leases.

They have 12 aircraft - 6 leased to Thai Airways ( 4 x A350's and 2 x B777's) and 6 x A380's leased to Emirates.

Thai Airways have been in administration ( Thai equivalent) since Covid times but have survived and are now in a very good financial place and look like they will come out of administration in the next 6 months. Either way they have extended their leases as part of the restructuring that took place and AA4 will at some stage realise the value of these assets by selling the assets with leases attached. Both types of aircraft ( Particularly the A350's) are sought after and the resale value is only going up due to in particular the production problems at Boeing with the B787.

The A380's are very interesting - when Airbus announced they were discontinuing production - the assumption was that Emirates would hand back the assets at the end of their lease and walk away - a real problem for AA4 as there are essentially no other operators and they would have been sold for scrap. Now Emirates are clearly stating that they want to continue to use the A380's post 2026-28 when the AA4 leases mature. They have invested heavily in maintenance facilities for the A380's and have the full support of Tim Clark the driving force behind Emirates becoming one of if not the best Airline in the world over the past 20 years. They are also retrofitting 110 out of 123 of their A380's in a multi-billion dollar program.

So it seems pretty clear that they will want to purchase or lease but most likely purchase the 6 A380's owned by AA4 when their leases mature. Coincidentally Doric Nimrod Air Two (LON:DNA2) a similar aircraft leasing company have just sold ( Aug 24) 5 A380's to Emirates at the end of their lease period for USD50m each.

In conclusion,

based on

1) Greater clarity from Emirates on A380 fleet staying in service

2) Thai airways coming out of Administration

3) the background industry position including aircraft production problems/delays and the number of people travelling surpassing pre-covid levels

I think there is a reasonable chance that the gap between the NAV at AA4 and its SP will continue to decrease.

VietNam Holding (LON:VNH) (I hold) https://citywire.com/investmen...

Tech holding FTP soars.

Lincs, All,

there is a presentation on Middlefield Canadian Income PCC (LON:MCT) tomorrow at the link below:

https://www.cityam.com/nhs-pen...

Graham.

I don't go in for generalist Trusts (I have a share portfolio too, mostly why I'm on Stocko in the first place!).  But specialist high-yielders I love.  So here is another bond proxy I have owned before and am reconsidering.  Biopharma Credit (LON:BPCP) .  While not as exciting as Volta Finance (LON:VTA) or Chenavari Toro Income Fund (LON:TORO) , it is trying to do something useful in supporting biotech innovation through debt funding of medium-scale, already-listed (nearly all US) companies.  Its portfolio is quite concentrated at any one time, currently 11 loans.  But its track record is very solid.  And it went through a problematic few months, with one of its largest debtors running into trouble.  However, nearly all recovered through Rocke, I think, taking on the IP.  These are all roll-outs of therapies already patented, so while there are risks, these are not blue-sky punts.  Anyway, more at https://bpcruk.com/2024/06/17/... if you're interested.  It does a minimum 7c div over a year, plus specials, and I believe this year will yield not less than 9c.  That's about 10%.  Currently on 11% discount to NAV, having been at par till a couple of years ago.  So, won't shoot the lights out, but it's sizeable (market cap c£800m), has a good track record now, should recover par at some stage, gives US/$ exposure, is definitely uncorrelated with the general economy/stock market considerations.  Also, no debt now they are buying back shares to limit the discount.

For those of us closer to the end than the beginning, I think we will look back, when interest rates eventually touch the 3s, and wonder why we didn't take a chunk on vehicles like this.  But watch out, this is not for trading.  Big spread: this is where having an XO telephone broker helps to work purchases.  It may be one for the SIPP.  Before I go in again, any thoughts?

SSB,

when looking for international trusts. There was a good trust mentioned here a while back, although I don't remember the name of it but it was a Canadian trust with Canadian companies. Charles or Ken may remember the name of it. I think it was something like Wynstay or something like that. I mention this because Canada is supposed to be growing very well at the moment and not at risk of boiling over like USA, especially the magnificent seven and the fall out that will be experienced by other  shares if one of them fails in a big way.

hope that helps,

Graham.

And the worst- which DGI9 features- though I did buy it in low 20p's ! Same as before 10 yr at top. The one I am following is Macau Property Opportunities Fund (LON:MPO) . I held for several years, sold after covid smashed the price and looks like it may now have some value. Large shareholders keep extending the life. But for the brave. I made money in it, but I did trade the stock pre Covid. Maybe with the new China economic measures it could see the Macau environment improve. I will do a post on MPO another time, but it is a special situation.

Investment trust performance over 10 years, 5 and 1 year. Top is 10 Years. For me 3I's currently is not something I would touch. I have made a decent return a couple of years ago when at a small discount, sold when it went to 10% above NAV as I recall,  and I cannot see why it trades at such a premium and why Action is so special. Like in the UK Aldi and Lidl made great progress, but it seems now market share is declining. Maybe Action has something, but given the valuation seems to be based on 3i's view, but no explanation why it trades at a PE above other chains, I would avoid. Basically a punt on Action.

Great posts so far this month all.

I have been thinking and come to conclusion that the climb down on fees might not be the magic formula to get the big wealth managers to love investment trusts again. There was an article (wish Id kept it) where a respected advisory group mentioned US pension managers would rather invest in a tracker as there is much less chance of getting sued as a result. I do not think we are so far behind. Add in the fun fact that an angry investor can complain to the FCA and an IFA then has to justify him/her self.... along with the extremely high cost of Professional Indemnity cover for the IFA market. Add to this the volatility widening  discounts/premiums add to IT prices and the scene is set for an advisor wanting a quiet life to opt for trackers rather than managed funds. So any funds likely to be recommended by the fund manager community are likely to be the bigger, more liquid variety.

However on balance I don't think this changes much. The discounts are already there. It may make it easier for wealth managers to go back into IT's but this is likely to be a slow  gradual process I reckon. Still that is better than the opposite!

Edit found the article!    GMO Quarterly Nesletter- about the impacts that rising levels of passive investing may have had on the stock market:     https://www.gmo.com/europe/res...

Interesting article about China and its economy. https://theconversation.com/ca...

Investor meet company next week. ASHOKA WHITEOAK EMERGING MARKETS TRUST PLC
Investor Presentation
8th Oct 2024 at 10:00am BST

I will catch this up when recording available as out Tuesday morning. Interested to hear what they have to say as emerging markets are of interest to me.

The response from the board of Digital 9 Infrastructure (LON:DGI9) is on Triple Point headed letter. Which sort of makes all their comments pointless. I have asked for a letter from the Board on DGI9 letterhead. In short they claim all valuations were through an independent valuer. Approved by the board, and although Triple Point have directors on the board they do not control it !!!!

I have asked if the Directors (current and previous)have insurance, since Triple Point say they signed off the valuations.

They did say they had numerous emails, so please keep the pressure on this company

General post on trusts as I am catching up on some old RNS and articles....

Ken, thanks for coming back on my Supermarket Income REIT (LON:SUPR) post a few weeks back. I tend to agree with your sentiments re: it is reliant on Tesco (LON:TSCO) and J Sainsbury (LON:SBRY). Plus I am trying to diversify out of the UK a bit more. I keep hearing this Labour government are business friendly but I'm not sure I completely believe it yet. And with investment trusts, we have the whole world and different asset classes to invest in. May as well try to take that opportunity. For yield, I will look at Schroder European Real Estate Investment Trust (LON:SERE) and also BBGI Global Infrastructure SA (LON:BBGI) which is invested in the UK but not 100%.

BBGI Global Infrastructure SA (LON:BBGI) reported interims relatively recently.... 

# 1bn of assets trading at a -10% discount.

# Page 3 shows the split of the 56 assets: 35% Canada, 33% UK, 32% RoW (SSB: nice to see a wide geographical spread). 100% operational (SSB: take note Digital 9 Infrastructure (LON:DGI9)!)

# Inflation linked cash flows.

# The report says £20m net cash. This seems odd. I am always used to thinking about REITs and infrastructure trusts having some borrowings but that is not the case here.

# 6% dividend covered 1.5 times.

# Detailed notes in the interims on valuations so to a certain extent I have to take that on trust.

Note the SP performance has been poor over the last 3 years with the increase in interest rates but the discount seems to have bottomed out at approx -10%ish. I quite like it as an alternative source of dividend income, especially as the assets are global. The dividends have already been declared for 2024 so that is that until Feb-25.

https://tinyurl.com/2f762nwz

I liked the following article by Laura Foll of Law Debenture (LON:LWDB). There is always a reason not to invest, it just changes on a regular basis, that is all.

https://tinyurl.com/2pj462hk

I am keeping an eye on HgCapital Trust (LON:HGT) as this private equity trust is below NAV again. I bought late in 2023 but (in hindsight!) not a big enough holding. Along with Oakley Capital Investments (LON:OCI), I think HgCapital Trust (LON:HGT) is a quality operation and the stats in the recent interim results back this up:

# Invested in mainly back office tech companies with predictable cash flows (look at the table at the bottom of the following link, 'sector' typically says "legal and regulatory compliance" or "tax and accounting", these are not services that operating businesses can go without, even in lean years.

# 10 year share price total return of +20% per annum.

# Realisations at a +16% uplift to carrying value.

# +30% margins in the existing businesses. 

The manager's report towards the bottom of this link is well worth reading in my view.

https://tinyurl.com/mr2zjh3v

This month's AIC online magazine has some good articles.

https://theaic.turtl.co/story/compass-october/page/1

I took a quick look at the top 10 in North American Income Trust (LON:NAIT) as maybe a long term, low risk dividend payer. I did this via Google as I don't have access to US stocks in Stockopedia so maybe not 100% accurate....

Marks Electrical (LON:MRK): PE of 61

Medtronic (NYQ:MDT): 17

Metlife (NYQ:MET): 22

Gaming and Leisure Properties (NSQ:GLPI): 18

Citigroup (NYQ:C): 17

Air Products and Chemicals (NYQ:APD): 25

Philip Morris International (NYQ:PM): 14

L3harris Technologies (NYQ:LHX): 32

Baker Hughes Co (NSQ:BKR): 22

American International (NYQ:AIG): 11

Not bargain basement but the list includes some decent companies. AIC web site says the dividend cover is 1.46. It stands on a -13% discount to NAV.

Ian Cowie holds Greencoat UK Wind (LON:UKW). Another UK centric trust and maybe one to hold off buying into until after the budget ? AIC web site says it currently yields 7% on a discount to NAV of -11%. I remember posting about Greencoat UK Wind (LON:UKW) a while back and concluding I didn't like it because of the reporting (there was nothing which made year on year comparison easy) but I can't find that post now. I got to say it's not easy to find old posts in Stockopedia unfortunately.

The half year results for North Atlantic Smaller Companies Investment Trust (LON:NAS) reads reasonably well but I am not tempted to buy back in (I sold at a loss in mid 2022). I still don't think Harwood Capital are serious about closing the discount and this trust is run like a family office. I already have Caledonia Investments (LON:CLDN)  which is global and I am happy to stick with for the moment.

https://tinyurl.com/4bszt7hh

The August fact sheet for VinaCapital Vietnam Opportunity Fund (LON:VOF) is positive (as you would expect!) and I thought the following was interesting....

Market valuations remain attractively priced at a 2024F price-to-earnings ratio of 12.2x, which remains at a 20% discount to regional peers. Given the market’s attractive P/E valuation and strong earnings growth outlook, it trades at a price-to-earnings growth (PEG) ratio of less than 1x, indicating that it remains attractive in value and is delivering superior growth, which are traits that should appeal to investors.

https://tinyurl.com/2rwdbu3u

But I will be buying more of VietNam Holding (LON:VNH) when the discount (hopefully) widens as there it has no unlisted. Again, I could be wrong but just prefer lower risk trusts (plus I have enough unlisted in HgCapital Trust (LON:HGT) and Caledonia Investments (LON:CLDN).

Smithson Investment Trust (LON:SSON) reported interim numbers back in July and I meant to look at them sooner but a mixture of time and my relatively recent buy of Aberforth Smaller Companies Trust (LON:ASL) meant that I only just got round to it....

# NAV and SP both down -2% over the 6 months reported. Ok, a short time frame, I agree. And the trust NAV and SP are up +56% and +37% respectively since the trust listed in late 2018.

# There was a 20% turnover over stocks in the period. Again, you could say this is high or you could say mgt took decisive action. But the geographical exposure has remained constant with the US and Europe dominating.

# There is fair amount of the portfolio in tech and health which will probably do fairly well in the longer run as long as the trust manager has stuck to Tery Smith's infamous "buy good companies, don't overpay and do nothing" mantra.

# Good results were reported for a number of other holdings including Halma (LON:HLMA) but this trades on 27 times earnings.

# I was surprised by the stat that the median year of foundation of the companies in the trust was 1965. I'm not sure this actually means anything as a company can morph over time from unsuccessful to successful and vice versa. And is also doesn't mean the companies have been listed since 1965, just they have been in existence. I was just surprised, that is all.

# I do quite like the final paragraph from the trust manager (who must be under pressure from a certain person who lives in Mauritius!): In closing, we recognise that you have many options when allocating your capital, many of which have performed better than Smithson in the first half of this year. We greatly appreciate your continued support, and hope that we are able to convince you to keep this faith until the small cap sector returns to vogue. While we may have to remain patient a little longer while the paint dries, we remain very optimistic that the picture will be worth it. 

I'm a little lukewarm on this trust but after a period of underperformance, maybe it is a buy 

https://tinyurl.com/3kk7k9m5

I've also been meaning to look at Herald Investment Trust (LON:HRI) for ages. Partly because Katie Potts has been the manager of this trust since it floated back in 1994 and the performance has been very good (+2169% since launch on 31st Jan 1994). But also because she was so doom and gloom when she presented at Mello for 2 consecutive years. But I now realise that whilst her Mello presentation was based on the London market, her daytime job is global!

From the July fact sheet:

I will take a look at the next report when it is issued, have a good read through.

VietNam Holding (LON:VNH) annual report was published this last week.

https://tinyurl.com/yeen9r8a

I was thinking of increasing my holding but the mkt cap and the current discount put me off.

Some of the commentary is interesting though (my selections only below, no the whole report!)....

Chairman's Statement

We are confident the country has a bright future ahead. Despite global headwinds and local incidents, it has performed very well. These challenges include weaknesses in the real-estate sector caused primarily by disruptions in the bond market and project permitting delays, rather than weak end-demand (which remains strong) and concerns about the balance sheet strength of one or two large local corporations (not portfolio companies) exposed to the real-estate sector.

Vietnam remains a dynamic country. In a year marked by global uncertainties and economic headwinds, its economy has shown resilience, attracting record amounts of foreign direct investment ("FDI") and generating record trade surpluses, as the country solidifies its position as a leading manufacturing hub. SSB: we knew this already but good to see it repeated.

Vietnam's capital markets, particularly equities, are driven by local investors who account for more than 90% of the daily trading volumes and own more than 80% of the stocks listed on the Ho Chi Minh Stock Exchange ("HOSE"). Vietnam is still part of the frontier investing world and makes up 30% of the MSCI frontier index. This year foreign investors have been net-sellers of Vietnamese equities, but domestic investor interest remains high, accounting for the market's 10% rise in value. 

The 'upgrade' of the market to Emerging, or Secondary Emerging, is still some way off, despite several positive steps being made. An upgrade decision by one of the agencies could happen in 2025, but 2026 is more likely. When this eventually happens, we anticipate the upgrade to be a catalyst for renewed foreign investor interest, thereby increasing market liquidity and potentially re-rating some leading companies.

Over the past twelve months there has been a notable increase in interest in the Fund, as well as a considerable increase in daily liquidity in the Company's shares. The Investment Manager, along with our Broker and distribution partners, has conducted an extensive marketing campaign, hosting several in-person investor meetings across the British Isles, as well as several online webinars and roundtables. We are thrilled that the Company became a member of the FTSE All Share and FTSE Small Company indices on 25 June 2024. This should help sustain attractive levels of liquidity in the Company's shares. We also have a balanced shareholder register and are pleased to welcome new investors many of whom purchased the shares through leading UK wealth management platforms. SSB: if this is the case, why is the mkt cap not increasing ? And why keep offering shareholders exists at higher than the current SP ?

Investment Manager's Report

Vietnam's key themes of industrialisation, urbanisation and domestic consumption are all intact and rising, with GDP growth for the full year expected to be 6%, its impressive multi-decade average.

Performance

As stated in the interim report as of 31 December 2023, the NAV per share increased by 8% during the first half of the financial year, while the Vietnam All Share Index ("VNAS") increased by 3.2%. The second half had a 14.4% rise in NAV per share versus an 8.1% increase in the VNAS. At 30 June 2024, the NAV per share rose by 23.6% for the full-financial year versus a 9.5% increase in the VNAS. The Company continues to outperform its peers and has outperformed the VNAS on a one, three, five, ten, and 15-year basis. The two other London-listed Vietnam peers, VOF and VEIL, were up by 11.5% and 6.1% respectively during the corresponding period. The Company's share price rose by 43% during the financial year due to a combination of a strong NAV increase and significant narrowing in the discount between the share price and the NAV. Since the adoption of the Share Redemption feature, the Company's discount has, on average, remained below 5%. This compares to the high-teens level of discounts for peers.

Portfolio

The portfolio remains concentrated, with the top ten holdings accounting for 63.2% of the portfolio's Net Asset Value (see table on page 10). This is the direct result of our active portfolio construction. Initial position sizing is based on our conviction-led approach to investment decision making. We often start a new position at a modest conviction level of roughly 2% of NAV, increasing to a mid-level of 4-6% and then high conviction level of 8% when we become more comfortable with the company and more assured about the sustainability of its strategy. The portfolio is comprised of 24 companies, all of which have been thoroughly researched. At any one time there are another 12-20 companies that we monitor closely and review on a regular basis, looking for catalysts for new growth. We also research promising newer companies, albeit our investment bar is extremely high, as we seek companies with acceptable valuations, strong growth prospects and a desire to engage with us on a journey of improving governance, investor relations and sustainability reporting. The portfolio valuation is approximately 12.9x PE for 2025, which is reasonable given the expected Earnings Per Share ("EPS") growth of 20% for 2025.

Urbanisation

Vietnam's urbanisation level was approximately 37% in 2022 and has risen to about 40% in 2024. These were the levels reached by China in 2000, before doubling over the next twenty years. The government forecasts that Vietnam's urban population is expected to exceed 50% by 2030.

While the potential for urban growth remains intact, as Vietnam will need to build millions of new houses over the next two decades, the real estate sector has been in the doldrums for much of this year. We had a 15% exposure to the real-estate sector at the third quarter of 2022 but were quick to reduce this in the face of weakening near-term prospects and, indeed, managed to escape the worst of the turmoil that hit some companies in the sector. At the end of 2023, our exposure to real estate was 9.4%, and was reduced to 7.8% at 30 June 2024, with the majority of this going to the industrial park sector rather than the residential market. For example, we have 5.3% of NAV in IDICO, a leading industrial park developer. We are confident that some of the key names in the residential sector will survive and thrive.

Liquidity

The Vietnam stock market has grown dramatically over its 24-year history. From only a handful of listed companies two decades ago, there are now over 1600 public companies, and fifty companies with more than USD 1bn in market capitalisation. Portfolio liquidity is robust, and we estimate that over 95% of the portfolio could be liquidated in under 30 days. During the past six months, average daily liquidity has touched close to the equivalent of USD 1bn, which is five times the pre-pandemic level. Vietnam's domestic retail investor base is the dominant driving force in the country's stock market: there are now eight million domestic share trading accounts, almost four times the level in 2018. Foreign investors hold only approximately 15% of the stock market, and over the past six months, foreigners have been net-selling Vietnam listed equities to an amount of USD 2bn.

Outlook

The Prime Minister and the Ministry of Finance want to see continued development of the stock and bond markets, with an ambition to increase the size of the stock market and bond market close to an equivalent size of 100 % and 50% of GDP respectively by 2025. The State Securities Commission is inviting feedback from market participants on a recently published final draft circular proposing to remove the pre-funding requirement on stock trading accounts. They hope to have this ready by September, ahead of the FTSE Russell review on Vietnam's stock market status. Vietnam is on the FTSE Russell Secondary Emerging Market watchlist, and an upgrade would be very welcome. In the Interim Report this year we included a more detailed article on the benefits of a market upgrade, but in simple terms Vietnam would go from being part of a USD 90bn Frontier Market universe, to part of a USD 7-8 trillion-dollar emerging market universe. The World Bank estimates this could add a further USD 20-30bn of net indirect capital flow within three years.

SSB: it seems the trust is active in turning over the top 10 holdings....

All the holdings in the trust are reported as level 1 under IFRS 13. Compare this against VinaCapital Vietnam Opportunity Fund (LON:VOF). I think this explains why VinaCapital Vietnam Opportunity Fund (LON:VOF) constantly trades at a discount. I may be wrong but that is just my thinking ie: the VietNam Holding (LON:VNH) NAV is more easily understood and trusted.

I don't hold an China as I simply don't trust the government and there is enough elsewhere to invest in but fwiw....

The last 10 minutes of this week's IC podcast is relevant. The IC favours Fidelity China Special Situations (LON:FCSS) because of the 19% gearing. +35% over 1 month is nice!

https://www.investorschronicle.co.uk/content/18823f8c-649c-5ff9-999d-958b71767911

The following GS podcast is short and relevant.

https://www.goldmansachs.com/insights/the-markets/does-the-china-rally-have-legs

A response from Digital 9 Infrastructure (LON:DGI9) . I have also had a lengthy letter which I need to summarise over the weekend and post. Basically says Triple Point do not value the Assets !

"

Thank you for your email regarding D9. Please see the below clarification regarding RCF repayments and the covenant breach.

• Before the Verne transaction, the RCF was fully drawn at £373.8m (fully drawn due to £1.2m letter of credit).
• £273.5m was repaid in March upon completion of the Verne transaction. https://www.londonstockexchange.com/news-article/DGI9/verne-global-sale-completion/16378923
• A further £47.0m was repaid in May. https://www.londonstockexchange.com/news-article/DGI9/additional-rcf-repayment-and-partial-cancellation/16444009
• The balance was £53.3m as of 30 June 2024. https://www.londonstockexchange.com/news-article/DGI9/results-for-the-half-year-ended-30-june-2024/16691500
• As stated in the interim results, D9 inadvertently breached of one its RCF covenants following the revaluation of the portfolio as of 30 June 2024. RCF lenders have indicated that, at present, they intend to work collaboratively with D9, where possible, over the coming weeks to explore the option of providing a waiver, or alternative action if more appropriate at the time, of the breach. No further details are provided regarding the breach.

I have responded

"Thank you for the reply.
I do feel you should tell shareholders the details of the breach. This could be material to the value of the company if you cannot get a waiver.
We have had enough uncertainty recently without this."

Thanks Ken, 

You've confirmed my thoughts on Jpmorgan China Growth & Income (LON:JCGI) , I  almost bought it a little while back but didn't and so missed this little rally. I will wait and see if there's another opportunity a little later I also agree with Charles' comments on the China rally fizzling out. It worries me when a big stimulus like the recent 'Bazooka' has such a steep and rapid affect. It's not like there was only one problem that can be fixed this one one initiative. There are several deep routed problems that will require a bit of time for steady confidence to come back.   

Graham.  

Posted this on last months earlier- confused myself !

China-

"Having experienced a rare, week-long stock rally after Beijing fired its policy bazooka to boost the economy, a more sober assessment is required as the possibility of a stock crash looms large, an economist has warned.

“Given the current market momentum and our tracking of sentiment on China’s social media, the risk of repeating the epic boom and bust in 2015 could rise rapidly in coming weeks,” said Lu Ting, chief China economist at Japanese investment bank Nomura, on Thursday.

“While investors might still be OK to indulge in the boom for now … we wish Beijing could be more sober.”

https://sc.mp/1wdm0?utm_source...

Apologies again if a Paywall- I have a monthly subscription @ £2.50 pm.

Biotech Growth Trust (LON:BIOG) https://www.stockopedia.com/co...

Geoff Hsu, General Partner at OrbiMed Capital, will present The Biotech Growth Trust (BIOG) and will discuss its current performance and future strategies on the ShareSoc webinar taking place on the 17th October 2024 at 4 p.m on Zoom. The presentation will be followed by a Q&A session, where you can ask Geoff direct questions.

Register Here

Could be interesting, I have registered. An area I have not done well with using trusts in the past, but feel it is an area one should have exposure too. I could not stock select myself in this field.

VietNam Holding (LON:VNH) : showing good price momentum basking in the afterglow of the China stimulus. 
Anyone able to uncover an Indonesia specific fund? Along with the US , Indonesian economy is topping the GDP global growth charts. 

Capital Gearing Trust (LON:CGT) Might be a good time to buy CGT given some of the wide discount trusts they are holding in the equity portfolio. Article in Trustnet https://www.trustnet.com/news/...

Bluefield Solar Income Fund (LON:BSIF) I have sold this today. I am not entirely sure what the Board/Managers are doing- "This has enabled the declaration of a fourth interim dividend
of 2.20pps, bringing the total dividend for the Year to 8.80pps
(Prior Year: 8.60pps); the yield on our shares - based on a share
price of 106.40pps on 26 September 2024 - is 8.3%. The Board
has set a target dividend for the year ended 30 June 2025 of
not less than 8.90pps. This extends our record of progressive
increases, and reflects our intention to repay borrowings and
continue a programme of share buybacks, while also investing
in the development of our pipeline to generate and store electric
energy"

So the forecast dividend increase is tiny. Quite why they think buying back shares rather than increasing dividend is the correct thing to do baffles me. As far as I can see these buy back shares are held in Treasury- not cancelled, so could be re-issued if the fund trades at NAV or above. 

A word of caution on China!

I heard on a podcast today, that the the Chinese government have printed 70 billion and given it to the banks to buy Chinese trusts and companies and encouraged them to carry out buy backs as well to stimulate growth in share prices and encourage others to invest in the country. They are also struggling to try to fund infrastructure, which is what got them into the trouble they’re in now! The commentators said that the average loss for every house holder in China is worth 60,000 per person from the fall out caused by the construction troubles of the very recent past.
it’s made me think twice about investing in China right now. I was going to invest in Jpmorgan China Growth & Income (LON:JCGI) which has done very well of late but what happens when/if the Quantative Easing fails? It will all come tumbling down like the house of cards. 

https://podcasts.apple.com/gb/...

Above is the link to the podcast. The China commentary is right at the end in the last ten minutes. The podcast series from Chit Chat Stocks are very good. The Peter Lynch and the Pat Dorsey ‘buy wide moat stocks’ podcasts were also very good. OK they are mostly American based but the investing commentary is very good. 

Good luck,   Graham. 

Digital 9 Infrastructure (LON:DGI9) They are obviously trying to confuse shareholders. Yesterday in breach of a RCF. Today announce this "Co reports reduction in revolving credit facility debt to 53 mln pounds ($70.59 mln) from 375 mln pounds after market close on Monday, helped by sale of unit Verne Global" But no explanation as to if this resolves the default ! Emailing them again.

Latest update form Seraphim Space Investment Trust (LON:SSIT) (I hold) https://newsfile.refinitiv.com...

China dominated the risers last month. I still only hold an ETF for China exposure and will wait longer before buying a trust. They still trade on decent discounts though. Several of my holdingd are in the worse performers- and I would have a look at these as some like Gresham House Energy Storage Fund (LON:GRID) Augmentum Fintech (LON:AUGM) and Hydrogenone Capital Growth (LON:HGEN) look harsh. For the trader maybe Schiehallion Fund (LON:MNTN) - Baillie Gifford will have to do something about this in my opinion.