Investment Trust- Thoughts (October 2024)

30th Sep '24 by Charles Mitchell

151 comments 6139 reads

Investment Trust- Thoughts (October 2024)

Links to older monthly thoughts-reader request.

September Thoughts. 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.

September 2024 Investment Trust monthly performance.

Top 10 (Equity only)

Jpmorgan China Growth & Income (LON:JCGI) +19.6%

Fidelity China Special Situations (LON:FCSS) +18.8%

Baillie Gifford China Growth Trust (LON:BGCG) +17.1%

Chrysalis Investments (LON:CHRY) +14%

Cordiant Digital Infrastructure (LON:CORD) +9.5%

Pantheon Infrastructure (LON:PINT) +9%

Invesco Asia Trust (LON:IAT) +7.5%

Asia Dragon Trust (LON:DGN) +6.5%

Middlefield Canadian Income PCC (LON:MCT) +6.5%

GR Emerging Markets ? +6.4%

Bottom 10

Schiehallion Fund (LON:MNTN) -16.4%

Sure Ventures (LON:SURE) -10.3%

Athelney Trust (LON:ATY) -6.9%

North Atlantic Smaller Companies Investment Trust (LON:NAS) -6.9%

Blackrock Latin American Investment Trust (LON:BRLA) -6.3%

Augmentum Fintech (LON:AUGM) -6%

CT UK High Income Trust (LON:CHIB) -5.9%

Bellevue Healthcare Trust (LON:BBH) -5.8%

Strategic Equity Capital (LON:SEC) -5.7%

CC Japan Income and Growth Trust (LON:CCJI) -5.2%

Top 5 (All funds)

Jpmorgan China Growth & Income (LON:JCGI) +19.6%

Fidelity China Special Situations (LON:FCSS) +18.8%

Baillie Gifford China Growth Trust…

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sevenccc

24th Oct '24

Charles, had a chance to catch up with someone who spent the last month in China visiting friends and parents. They were shocked at the levels of unemployment and don't believe any of the government stats on growth. Friends who had scrimped and saved to get child through a top uni now find him working for Uber alongside his Dad. Most grads are out of work.

Other couples with good education and decent jobs both made redundant earlier this year. Big concerns that Xi doesn't know how to sort this.

Suggested he is not the cleverest man in the country and they think he is out of his depth.....

Peter T

25th Oct '24

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) ?

KevinS1

Just had a quick look on JustETF - a great website for comparing all ETF's. Good long-term performance since 2008 (+550%), but nothing spectacular recently. I think the US small-cap area is notoriously hard to do well in, but a well diversified ETF might work out fine. I am sure many others will suggest just going with a S&P500 ETF.

I haven't compared it to any other similar ETF's or Inv Trusts so might be worth a look.

Thanks KevinS1. I already have exposure to the S&P 500 but was thinking that the it could be the S&P 600's time to shine and being at a perhaps more reasonable value and a bit unloved maybe.

For what it's worth, I also hold Global X NASDAQ 100 Covered Call UCITS ETF USD Acc (LON:QYLP) (managing to get in when it blipped down)

Also, while I'm here, Thanks to Charles for the monthly Investment Trust posts and all contributors to them. Great stuff, very educational for me and a great asset to the Stocko platform.

Charles Mitchell

26th Oct '24

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.

Alphaflight

I see that Vietnam as of this week just became a BRICs partner (i.e. will join BRICs at some point soon):

ken mitchell

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.

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.

ShoeShineBoy

27th Oct '24

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.

Your thoughts were certainly of interest to this subscriber ShoeShineBoy and they always are. Hope there are far more than the few who recommend very good posts here who also find them invaluable.

As you hinted in your post I was particularly interested in that Edmund Shing podcast about buying during crises etc. That podcast is only 5 minutes long and is well worth listening to.

A key point was that since the Second World War, including that war, it has paid off buying the market dip 21 times out of 25 crises since 1940. No wonder it works so well for me. The odds are strongly in my favour. There are also examples in THE VIRTUAL INVESTMENT TRUST PORTFOLIO which number33 is now posting here once a month.

e.g BlackRock World Mining Trust (LON:BRWM) boight as the Mining sector began to bounce after a severe bear market is up 226%. CQS Natural Resources Growth and Income (LON:CYN) bought during the covid falls is up 150%.Aew UK Reit (LON:AEWU) bought near the nadir of the 2020 Commercial Property falls is up 118%. And Allianz Technology Trust (LON:ATT) bought in what turned out to be a short US tech dip in 2023 is up 77%. Also China’s Market has fallen heavily, but Fidelity China Special Situations (LON:FCSS) bought in 2016 during a China dip is up 97% DESPITE the recent falls.

And the PORTFOLIO holdings in VinaCapital Vietnam Opportunity Fund (LON:VOF) and VietNam Holding (LON:VNH) were from memory both topped up in November 2022 when I posted that buy opportunity, when there was evidence a short Vietnam bear market that saw VinaCapital Vietnam Opportunity Fund (LON:VOF) fall from £5 that August to £4 was over. It was. PppVinaCapital Vietnam Opportunity Fund (LON:VOF) has disappointed since and is only up 10% to 456p. But much better performer VietNam Holding (LON:VNH) which fell from £3.30 in August 2022 to £2.30 is now up about 70% to £3.90.

The unfortunate problem now is that Markets have been doing well so there are very few such buy the big dips opportunities. One that might be worth checking out (I haven’t yet) is Blackrock Latin American Investment Trust (LON:BRLA) which is at a 3 year low and at £3.15 well down on £4.50 this January. And the dividend if it’s held is over 7% And it’s on a 15% discount. . Next nearest potential target buy is one of the China Trusts if there’s another chance to buy near the recent lows.

NOTE. There will always be well argued posts explaining why it would be wrong to buy China or wherever . There always are at the times of maximum gloom that are so often THE time to buy.

Finally ShoeShineBoy mentioned M&G (LON:MNG) and Record (LON:REC). There ARE still shares at bargain prices and like M&G (LON:MNG) paying 10% dividends while we wait for capital gains. Might post on those on a Bargain thread (IF I can find it) another time.

dartagnan2019

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

Ken- as I have posted I hold BRLA. Down substantially, bought to soon obviously. But i remain convinced about the prospects for Latin America. And the yield is now high. My concern is more about the managers than the region- they never respond to emails which grates with me. But no other option other than an ETF- and as said yield on the Trust is good now. I will continue to hold and hope that the managers perform better.

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 Charles. That’s helpful. Another irritant is that Blackrock Latin American Investment Trust (LON:BRLA) are one of the very few Trusts who don’t subscribe to AIC.

I’ve only had a Quick Look so far. Am I right in seeing the dividend as 6% of NAV? If that’s the regular target then buying now could lock in a very good yield if Blackrock Latin American Investment Trust (LON:BRLA) performance improves. Don’t know yet how much of the poor performance is the Managers or the markets they invest in. Perhaps a bit of both?

dartagnan.

It’s worth you and other perhaps occasional readers of the Investment Trust threads scrolling through the posts to see if any Trusts of interest to you have seen useful posts. There are some very good posts here from a number of posters which include information on some very tempting Investment Trusts.

I posted on VinaCapital Vietnam Opportunity Fund (LON:VOF) yesterday (26th October) and also on the 19th where I included a link for a very upbeat article on Vietnam.

I’m a happy enough holder of VinaCapital Vietnam Opportunity Fund (LON:VOF) but for now VietNam Holding (LON:VNH) is doing much better.

Charles Mitchell (e.g 24th and 13th) and ShoeShineBoy have also posted on Vietnam, and ShoeShineBoy gives very good reasons why he isn’t keen on VinaCapital Vietnam Opportunity Fund (LON:VOF) . Where I disagree is that his valid points look priced in with VinaCapital Vietnam Opportunity Fund (LON:VOF) on a 20%+ discount.

29th Oct '24

@ 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

bsharman

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:

31st Oct '24

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.

2nd Nov '24

Hi dartagnan2019,

apologies for the delay in responding. As soon as Sunday evening comes, I'm in work mode :-(

I posted on the VietNam Holding (LON:VNH) versus VinaCapital Vietnam Opportunity Fund (LON:VOF) on Oct 5th (under the Investment Trust October thread). My argument is that I don't see the discount on VinaCapital Vietnam Opportunity Fund (LON:VOF) closing significantly because it relates to the private holdings. Whereas VietNam Holding (LON:VNH) only owns listed companies and it is therefore more easily valued, more transparent and more liquid. Look, I could be wrong but I prefer VietNam Holding (LON:VNH) for that simple point. I notice the September update for VinaCapital Vietnam Opportunity Fund (LON:VOF) read well.

https://tinyurl.com/ytwfenxn

On VietNam Holding (LON:VNH), I will be interested to see how the SP and underlying NAV react when the requested redemptions take place. Will the discount widen out again ? If so, I will top up my holding.

https://tinyurl.com/ey4kmdk6

SSB

Agree on Christopher Mills' long-term record bsharman. And the current discount to NAV is almost the widest it has been. It's one of those trusts that PIs have to buy when the SP dips and the discount is at it's widest. I recall asking CM about it at Mello last year and his response was along the lines of.... what is important is growing the NAV, not closing the discount. It's almost run like a family office. No reason why PIs shouldn't benefit along the way but as you intimate in your post, it needs to be a long-term holding. Good luck if you buy again.

Investment Trust- Thoughts (October 2024)

Investment Trust- Thoughts (October 2024)

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Charles Mitchell

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