reports
- Andrew Courtney
- James Carthew
Bluefield Solar Income Fund – Fundamentals shine despite discount
The manger comments that, in common with the other trusts in the renewable energy sector, the last six months have continued what has been a challenging period for the Bluefield Solar Income Fund (BSIF). It adds that the trust’s ongoing fundamental performance has failed to reverse a steady slide in its share price which began back in May 2023. Despite this, it says the company has continued to deliver solid NAV growth and market-leading shareholder distributions thanks to a range of contractual...
- Andrew Courtney
- James Carthew
HydrogenOne Capital Growth – Momentum building despite discount
The advisor notes that while shares of HydrogenOne Capital Growth (HGEN) have continued to fall, it believes that investors should be buoyed by the ongoing growth of the portfolio and the accelerating development of the green hydrogen sector. The advisor points out that despite challenging macro-economic conditions, HGEN’s NAV grew 5.8% over 2023, while the portfolio generated aggregate revenue growth of 125%. It says that this momentum reflects the rapidly accelerating demand for green hydroge...
- David Johnson
- James Carthew
abrdn Private Equity Opportunities – On the way to greener pastures?
Despite navigating through what its managers considered to be challenging conditions in 2023, abrdn Private Equity Opportunities (APEO) was able to report both positive NAV growth and double-digit share price returns in its recently published annual results. APEO’s discount has narrowed by more than 10% in recent months, so that it is trading on a 28.9% discount currently, narrowing from about 45% last October. These figures were generated over a period that saw a slowdown in activity in Europea...
- James Carthew
- Matthew Read
Oakley Capital Investments – Getting down to business
In spite of what seems like an uncertain macroeconomic environment, Oakley Capital Investments’ (OCI) underlying portfolio continued to generate earnings growth in 2023 (average 14% EBITDA growth), which in turn helped drive 4% NAV growth. In addition, OCI achieved an 18% total shareholder return (TSR) during the period, extending the long run of performance delivered by the company (five-year TSR CAGR of 24%). The same macro uncertainty may also be creating opportunities. OCI’s investment mana...
- Andrew Courtney
- James Carthew
Temple Bar – Foundations for success
We are now more than three years into the tenure of Ian Lance and Nick Purves as managers of the Temple Bar Investment Trust. In that time, the Redwheel team has aimed to establish a well-diversified portfolio of value-orientated holdings, which it says is positioned for a long-overdue reversion to more normal market conditions, after a decade of what the managers believe was exceptional economic policy and quantitative easing. They say that slowing growth and stubborn inflation in the UK have w...
- David Johnson
- Matthew Read
BlackRock Throgmorton – AGM update
In yesterday’s BlackRock Throgmorton (THRG) annual general meeting, manager Dan Whitestone outlined what he sees as the significant potential for a surge in UK small and mid-cap valuations to outstrip those in the large cap sector when the macroeconomic backdrop in the UK improves. Dan says that UK companies’ share prices have become increasingly detached from their earnings potential, through a combination of political uncertainty, sticky interest rates, strength in overseas markets (in partic...
- Andrew Courtney
- James Carthew
Aquila European Renewables – Powering through
A number of factors appear to have combined to have a small negative effect on Aquila European Renewables’s (AERI’s) NAV and discount in recent weeks, including nerves about when interest rates will be cut, lower power prices, and the imposition of new taxes on renewables in Norway and Spain. These may be adding to the broader economic pressures that seem to have weighed on the shares over the past year, but the adviser observes that these are now mostly de-risked. The entire renewable energy i...
- James Carthew
- Matthew Read
NextEnergy Solar Fund – High- and growing-income opportunity?
NextEnergy Solar Fund (NESF) is almost 10 years old. Since launch, it has built a £1.2bn, 933MW portfolio of 100 operating solar assets, powering the equivalent of over 330,000 homes, declared dividends totalling £333m, and avoided the emission of about 2.2 Mt CO2e. NESF is on track to pay 8.35p in dividends, with forecast dividend cover of about 1.3x. Share price weakness that has afflicted the whole sector means that dividend translates to a yield of 11.1%, one of the highest in its sector, a...
- James Carthew
Polar Capital Global Healthcare – Healthy returns and a rosy outlook
Polar Capital Global Healthcare (PCGH) is, as we show on page 16, the leading performer within its peer group over the long term. Its managers’ feel that their high-conviction approach and stock-picking skills have helped the trust navigate a period of relative underperformance by the healthcare sector. The managers believe that the sector is overdue a re-rating. PCGH’s managers point to the long-term secular trends that are driving growing demand for healthcare. They say that higher utilisatio...
- David Johnson
- James Carthew
AVI Japan Opportunity – The sun has risen
2023 been a noteworthy year for Japan, defined by strong share price returns (at least in yen terms) and progress in its path to improving corporate governance. The Tokyo Stock Exchange has implemented a series of new efforts to name and shame the worst governance offenders (such as pressuring companies to keep their P/B ratio over one). These efforts appear to have already borne fruit, with Japanese equities outperforming even the US in local currency terms. AVI Japan Opportunities Trust (AJOT...
- Richard Williams
Tritax EuroBox – Calmer waters
After a period of interest rate volatility, real estate seems to have entered calmer waters, with some evidence of asset values stabilising, while occupier markets could support rental growth. Tritax EuroBox’s (EBOX’s) manager says that it is sailing in these waters too, as demonstrated by a portfolio valuation that has changed little and a 30% uplift in earnings that now fully covers its 8.6%-yielding dividend. The company is on the way to achieving its aim of reducing its already low-cost deb...
- Matthew Read
Edinburgh Worldwide – “The opportunity is as exciting as ever”
As the rate of inflation continues its descent (barring a small bounce in the UK in December 2023) interest rates look likely to fall. Growth stocks have been recovering and Edinburgh Worldwide (EWI), the most growth-focused of the global smaller companies trusts (see pages 22 and 23) has seen a pickup in its relative performance. Its managers comment that, within the portfolio, valuations are relatively low, and history suggests that we could be at the beginning of what may turn out to be a si...
- James Carthew
Chrysalis Investments – Turned a corner
On some measures, Chrysalis Investments (CHRY) seems to have turned a corner. The manager points towards the 6.5% jump in the NAV over the final quarter of 2023, encouraging news from many portfolio companies, a NAV enhancing (but unnamed) disposal in the works, and the prospects of a more supportive interest rate environment which it believes all help underscore the trust’s attractions. It also expects that shareholders will be happy to support the continuation vote scheduled for the AGM in Mar...
- Andrew Courtney
- James Carthew
GCP Infrastructure – Don’t look back in anger
2023 was a challenging year for GCP Infrastructure Investments Limited (GCP) as rising interest rates and several other factors appeared to weigh on returns. Despite this, the company was still able to generate positive NAV returns which the advisers note was thanks mostly to inflation linkages and contracted earnings that helped offset the impact of rising discount rates. Unfortunately, negative sentiment continued to weigh on the company’s shares, with the discount widening to a record low, de...
- David Johnson
- Matthew Read
Gulf Investment Fund – In good hands
In terms of both its alpha generation and NAV returns, Gulf Investment Fund (GIF) has been one of the best-performing strategies focusing on the Gulf region. The management team has recently increased exposure to the healthcare sector, which it believes benefits from both government initiatives and the growing wealth of the GCC consumer. The management team also note the success of local financial institutions, which it says reflects the increasing mass affluence of the region. Jubin Jose stepp...
- Andrew Courtney
- James Carthew
Ecofin Global Utilities and Infrastructure Trust – Strong outlook as m...
Over the past 12 months, Ecofin Global Utilities and Infrastructure (EGL), along with the broader utilities and infrastructure sector, appears to have been at the mercy of broader macro-economic conditions. However, the managers note that its recent performance in no way diminishes the secular opportunity that exists for the fund, which, they believe should become more apparent as interest rates retreat from their highs. The company has exposure to a suite of investments that the managers believ...
- Andrew Courtney
- James Carthew
JPMorgan Japanese Investment Trust – Are we there yet?
Optimism driven by rapidly developing corporate governance reforms, a divergent economy cycle, and still-negative interest rates likely contributed to a dramatic rally in benchmark Japanese indices over 2023, with the TOPIX index climbing to its highest level in more than 30 years. The managers note that with the rally driven by more value-focused sectors of the market, returns for the JP Morgan Japanese Investment Trust (JFJ) failed to keep pace for much of the year due to a portfolio more tar...
- James Carthew
- Richard Williams
Urban Logistics REIT – A re-rating candidate
If an inflexion point in the rates cycle has been reached, as seems to be the case, Urban Logistics REIT (SHED) appears to be an attractive proposition. Valuations look to have stabilised – as evidenced by a 0.2% uplift in the value of its portfolio in the six months to September 2023 – while the company says that it has rental reversion baked into its portfolio. SHED’s manager has a track record of creating value through asset management initiatives, and says that it will continue to be a focu...
- Matthew Read
- Richard Williams
Polar Capital Technology – The AI’s have it
Polar Capital Technology’s (PCT’s) manager Ben Rogoff’s conviction levels on the potential of artificial intelligence (AI) have risen, reflecting the all-encompassing possibilities of the technology. His bullishness is displayed in the make-up of PCT’s portfolio, which is weighted almost 80% towards stocks that he believes are AI beneficiaries or enablers. The potential for huge productivity gains – which could boost global GDP by 7%, according to Goldman Sachs – and seemingly few barriers to ma...
- Andrew Courtney
- James Carthew
Rights and Issues Investment Trust
We are now more than 12 months into Jupiter Asset Management’s tenure managing the Rights and Issues Investment Trust (RIII), following the retirement of Simon Knott, who was at the helm for 39 years. New managers Dan Nickols and Matt Cable have said they remain committed to the fund’s heritage, retaining the core principles of one of the UK’s oldest and most successful investment trusts over the long-term, while adding the benefits of Jupiter’s UK Small and Midcap investment team. Whilst the m...
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