Investment Trust- Thoughts (September 2024)

31st Aug '24 by Charles Mitchell

203 comments 7180 reads

Investment Trust- Thoughts (September 2024)

Links to older monthly thoughts-reader request.

August Thoughts. July Thoughts. June Thoughts

May Thoughts. April Thoughts. March Thoughts

February Thoughts. November 2023 Thoughts

Investment trusts realising assets spreadsheet

For more information on Investment trusts visit:

Association of Investment Companies.

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

Jonathan Davies's website https://money-makers.co/.

You can also sign up(Paid membership) for insights on Investment Trusts from him and others. Weekly email and podcast .

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

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

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

Plenty of performance data on that site.

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

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

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

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

August 2024 Investment Trust monthly performance.

Top 10 (Equity only)

Crystal Amber Fund (LON:CRS) +18.9%

Molten Ventures (LON:GROW) +11.1%

Jpmorgan Japan Small Cap Growth & Income (LON:JPSS) +8.6%

Bellevue Healthcare Trust (LON:BBH) +7.9%

Jupiter Green Investment Trust (LON:JGC) +5.3%

Sure Ventures (LON:SURE) +4.3%

Polar Capital Global Healthcare Trust (LON:PCGH) +4.2%

Hansa Investment (LON:HAN) +4.1%

Lindsell Train Investment Trust (LON:LTI) +4%

Rights and Issues Investment Trust (LON:RIII) +3.8%

Bottom 10

Downing Strategic Micro-Cap Investment Trust (LON:DSM) -29.4%

Schiehallion Fund (LON:MNTN) -14.2%

RTW Biotech Opportunities (LON:RTW) -11.3%

Edinburgh Worldwide Investment Trust (LON:EWI) -8.6%

Henderson Smaller Companies Investment Trust (LON:HSL) -8.1%

JPmorgan US Smaller Companies Investment Trust (LON:JUSC) -7.3%

Mercantile Investment Trust (LON:MRC) -5.7%

Blackrock Smaller Companies Trust (LON:BRSC) -5.2%

Aurora Investment Trust (LON:ARR) -5.1%

Weiss Korea Opportunity Fund (LON:WKOF) -5.1%

Top 5 (All funds)

PRS Reit (LON:PRSR) +19.9%

Crystal Amber Fund (LON:CRS) +18.9%

Molten Ventures (LON:GROW) +11.1%

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Tim Boucher

26th Sep '24

Thanks for the recording Donald. I hadn't realised the full extent of the horrorshow with Digital 9 Infrastructure (LON:DGI9), it is shocking.

Albertos

BlackRock World Mining Trust (LON:BRWM)

Hi Ken

I think, but may well be wrong, that a bottom has been reached. China now does seem to be committed to taking steps to reinvigorate its economy, although I'm not sure what they are doing will stimulate the consumer which is what is seriously needed . I always choose this IT as a China play rather than direct China investments.

The NAV was reported here today at 568p for yesterday - given the very large rises today I have an estimated NAV as of tonight at 587p for a discount of over 8%.

If you believe in a reinvigorated China it looks like you could do worse to me.

BWDIK

OldSchool05

27th Sep '24

Chrysalis Investments (LON:CHRY) looks like it is coming together finally.

June NAV of 145p, has just been enhanced by sale of Featurespace. Could be £89m in total, with £79m up-front.

Company announced it had taken on £70m gearing earlier in the week, and viewed this as the capital buffer required above which it would start buying back shares. Initially I was a little concerned by this news, as I don't generally like to see debt being taken on (in a relatively high rate environment) for buying back shares. However, i feel this is allayed as the sale to Visa covers this and allows the buyback to start immediately. Buyback now commenced at £40m.

So Chrysalis Investments (LON:CHRY) is currently at a 38% discount to NAV (91/145), and that 91p is 38% covered in cash, with loan to pay back in future. Looks good to me and I have topped up.

Lincs

Hmmm - I don't know what to make of it atm. It claims to have spare cash and is returning some of it to shareholders - great, however it has just entered into a full drawdown of a £70m loan from Barclays. So it's actually borrowing money to return some money to shareholders, daft. I'd rather it kept the money being returned to shareholders; enabling it to fulfill it's objectives and borrow less.

Hi Lincs,

The borrowings of £70m are more than covered by lots of cash on hand and cash to come from sale of Featurespace. Remember the Company will have a signficant net cash position, with some gearing offsetting this.

One hopes that we will also see liquidity events relating to holdings in Klarna and Starling in the near future through IPOs.

The risk could come down the road if there are no further liquidity events on sale of above, and the remaining portfolio needs cash injections to support operations or reach maturity.

ken mitchell

Hi Albertos

As you posted it’s looking increasingly likely that China bottom has been reached. The gains this week for Fidelity China Special Situations (LON:FCSS) and Jpmorgan China Growth & Income (LON:JCGI) were 20%! Apparently these are the biggest China gains for 16 years.

Your 587p NAV forecast for latest NAV for BlackRock World Mining Trust (LON:BRWM) was spot on. NAV was up 18p to 585p, and it should be higher still with next figure on Monday. And it’s at a bigger 8% discount today.

And BlackRock World Mining Trust (LON:BRWM) as you’ve pointed out, is a good way to play China, as Mining sector performance is so linked to economic news from China. BlackRock World Mining Trust (LON:BRWM) was up 11% this week. The big mining shares I hold were up between 12% and 15%.

number33 is going to post the VIRTUAL PORTFOLIO here once a month so his latest weekly performance update is only on the Reddit site he also posts on. I’ve just had a look and the Portfolio is up £1,373 this week and almost £1000 of that is thanks to the gains for BlackRock World Mining Trust (LON:BRWM) Jpmorgan China Growth & Income (LON:JCGI) and Fidelity China Special Situations (LON:FCSS) .

These fast gains are another reason I’m always looking to buy when prices are depressed and sentiment and commentary bad. It’s those first gains that so often are the big and rapid ones. Miss those and it means buying at much higher prices after them instead of before, and downside risk is also higher.

I like this weekly Citywire update:-

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

Key feature this week is the dramatic China gains.

Though liking these updates I don’t take the lists like “cheap” and “expensive” Trusts seriously. Ditto those z scores. But this weekly update is great for spotting things like the biggest weekly winners and losers, along with comments on why for some of them.

Also note the small piece on Phoenix Spree Deutschland (LON:PSDL) which I bought and posted why here at 147p a while ago. They updated this week with more info on those condominium sales. It remains on the risky side but the share price has already risen to 176p and with that still large 45% discount the gains could continue.

29th Sep '24

Hi Oldschool it

Indeed, all as you say and don't dispute. However, I still don't get the need to fully drawdown the £70m - when there is no obvious need to do so. As you've stated there is cash to cover it, more cash to come from Featurespace sale and maybe even more to come if any successful IPO's. £40m of that debt is going straight out to the shareholders - as you've stated that cost would be covered without the need for debt. Why not draw the debt when it is needed for an investment or project? Perhaps it was sourced at a fantastic rate - but surely with interest rates likely to drop the chances are they may have sourced debt cheaper still at sometime in the future - at such a time when they actually needed it. Unless I'm getting a better return on my cash than the cost of borrowing more why do I laden myself with debt? Perhaps they are getting a better return on their pile of cash than the interest rate on the debt?Fair play if that's the case. But the interest they may have received on £40m of that cash is just about to disappear.

Charles Mitchell

30th Sep '24

Digital 9 Infrastructure (LON:DGI9) The situation seems to be even worse than shareholders maybe aware. They have just disclosed that they are in breach of a RCF loan and working with the lender. This despite the proceeds from Verne. Triple Point remain in place, further fees paid to advisors re sale of Verne. They are also only announcing an aggregate NAV- whatever that means- to protect company's position as they sell investments to protect positions. I have never read such nonsense. Sounds like the valuations, even as just written down, may still be to high and given the companies RCF breach I should think the vultures are gathering. I bought in relatively cheaply but still showing a significant % loss and have half a mind to sell. But a part of me wants to stay involved and keep emailing the board to sort this out. Donald Pond's Mello post was rather kind about the new board. I am afraid, having served on a couple of PLC's boards many years ago they have a huge responsibility and I am very concerned this could go badly wrong. Triple Point- if they had an ounce of decency would stop firstly charging fees and secondly refund all the fees based on the "fictitious" NAV that has probably been announced for at least 12 months.

number33

Virtual Investment Trust Portfolio - September Update

Notes:

To make the image more readable right click on it and select "Open in a new tab" or the equivalent in your browser.

It goes without saying, so I forgot to say it, but the portfolio is valued at bid prices.

The current value of the FTSE100 and its change over the month is given near the bottom of the sheet.

The figure shown as Annualised Growth is the compound annual growth rate of the value of the portfolio since its beginning.

In the case of a loss making holding with dividends such as SERE both the red bar (loss) and the black bar (dividends ) are sitting on top of the yellow bar (current value). The red bar is shown in front of the black bar so that you can see it. If the loss was greater than the dividends then the black bar would come to the front.

Charles

There’s a fair chance that few if any other followers of the Investment Trust threads are still holding Digital 9 Infrastructure (LON:DGI9) . IF that’s the case it would explain if there is no further follow up to your post today.

If I had been holding Digital 9 Infrastructure (LON:DGI9) (and for a while but for failing to answer a stupid irrelevant Hargreaves Lansdown “exam” question correctly, I would have held) I would definitely have sold after their update a few weeks ago on my always sell on bad news rule and after reading this bit in that update:-“

“The recently appointed Board is undertaking a review to assess the fair value of the Group's portfolio under International Financial Reporting Standards. Whilst the valuation process is still ongoing, the Board, in conjunction with its advisers and having obtained an independent valuation on certain portfolio companies, has determined that the aggregate portfolio valuation as at 30 June 2024 is likely to be materially below the latest published portfolio valuation as at 31 December 2023.”

And they added this further warning later in that update.

“The valuation process is yet to be completed which may result in further changes. The Board expects to release the Company's interim results for the six-month period ended 30 June 2024, no later than 30 September 2024.”

That double warning was more than enough to warn investors to get out imo. Selling at once on bad news like that works most times. The risk is of further bad news like the so called “profits warnings come in 3s,” causing even worse share price falls ahead, while the chance of the share or Trust price doing well is small.

Hope Digital 9 Infrastructure (LON:DGI9) doesn’t now go badly wrong as you fear it might. You deserve a better reward for all you’ve done to get the Investment Trust threads going here than a big kick in the teeth from your Digital 9 Infrastructure (LON:DGI9) holding!

Ken, We will see what happens. I think there is value there- just whether the Board can get it realised. A risk I am prepared to take as anything near 35-40p would be a good return for me. Hopefully the latest is the "kitchen sink" announcement.

Graham Wells

Digital 9 Infrastructure (LON:DGI9)

Where have the regulators been hiding all this time??

Situations like this are what put potential investors off investing in Trusts.

Charles, you and anyone else investing in Digital 9 Infrastructure (LON:DGI9) deserve better and the fees should definitely be returned and no new fees paid. The money should then go back to the share holders. I nearly invested in them at one time!

Hope there's a good outcome!

Regards, Graham.

Schroder Real Estate Investment Trust (LON:SREI)

Some big sales over the last couple of days;

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

And a buy by a director's PCA; https://www.stockopedia.com/sh...

3rd Oct '24

RNS today from Atrato Onsite Energy (LON:ROOF) - entire portfolio being sold, at what looks like 82.7p (although I haven't digested the RNS fully yet).

https://newsfile.refinitiv.com...

Hi Tim, 80p I think. No great surprise, performed badly since launch. I invested then as liked the idea, sold out after 1 year as obviously was not working plus they had not raised as much as they hoped. Tried to buy on a limit order at 69p this morning but price opened above that !

Ah yes, you are correct - 80p (the 82.7p price reflects the divis paid since the NAV was agreed for the deal).

I was feeling cheekier than you so tried a 66p limit, but yes the price soared to ~76 immediately! Clearly everyone read their RNS feed for breakfast.

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.

AlexB1966

11th Oct '24

Any thoughts on the announcement regarding Digital 9 Infrastructure (LON:DGI9)?

donald pond

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.

Investment Trust- Thoughts (September 2024)

Investment Trust- Thoughts (September 2024)

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Charles Mitchell

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