I’ve took a further £300 ‘profit’ with SOHO.

Cash to re-invest £1,229.00 but let’s see what the budget brings.

I’ve sold the portfolio shares in Foresight Solar for a profit of £103.00 and a total profit of £468.00, bringing the Snowball back to 2 solar Trusts.

I’ve bought for the portfolio 10k of shares in M&G Credit ahead of their dividend xd date this week.

Quote 11
If you, the reader, expect to get rich over the years by following some system or leadership in market forecasting, you must be expecting to try to do what countless others are aiming at, and to be able to do it better than your numerous competitors in the market. There is no basis either in logic or in experience for assuming that any typical or average investor can anticipate market movements more successfully than the general public, of which he is himself a part.
Ultimately, Graham didn’t counsel trying to outmanoeuvre the market. He believed in understanding its nature:

Quote 12
The investor with a portfolio of sound stocks should expect their prices to fluctuate, and should neither be concerned by sizable declines nor become excited by sizable advances. He should always remember that market quotations are there for his convenience, either to be taken advantage of or to be ignored. He should never buy a stock because it has gone up or sell one because it has gone down. He would not be far wrong if this motto read more simply: “Never buy a stock immediately after a substantial rise or sell one immediately after a substantial drop.”
Graham was almost wiped out by the Wall Street Crash but rebuilt his fortune amid the calamity of the Great Depression. He knew a thing or two about holding your nerve:

REGIONAL REIT Limited

(“Regional REIT”, the “Group” or the “Company”)

Solar Panel JV with Sunbird Solar

Regional REIT Limited (LSE: RGL), the regional property specialist, is delighted to announce that it has entered into a joint venture with leading Pan-European solar PV developer, Sunbird Solar International Limited (“Sunbird“), to install solar panels on a number of the most suitable properties within the Company’s portfolio, making the properties more attractive to potential tenants.

Phase one of the installation programme will encompass 19 properties with an aggregate portfolio generation capacity of 4,173 kW and is expected to be completed within a year. Regional REIT will invest alongside Sunbird in the joint venture company called Sugarbird SolarCo (UK) Limited.

The joint venture will enhance the EPC credentials of the respective buildings, supplement and provide on-site green electricity to common parts and continue the ongoing momentum of reducing CO2 emissions by some 713 tonnes across the portfolio.

The annual solar electricity output of this first phase is equivalent to reducing the electricity usage of 1,270 average UK households, further demonstrating our commitment to long term sustainability that will deliver real impact at scale.

Sunbird is a leading Pan-European solar PV developer led by an experienced team of Commercial and Industrial solar specialists with decades of experience in developing, financing, designing, constructing, and maintaining solar and battery energy storage assets.

Stephen Inglis, Head of ESR Europe LSPIM, Asset Manager commented:

“We are delighted to be working with Sunbird on this important programme that reflects the Company’s significant ambition to deliver meaningful environmental enhancements. This important programme will reduce our portfolio’s carbon footprint and enable the properties to benefit from both lower maintenance and energy costs.”

Dave Colley, Director at Sunbird, commented:

“We’re really pleased to be working with Regional REIT on this exciting joint venture of improving the energy efficiency of the portfolio to the benefit of the properties, to the other stakeholders and the benefit of the environment.

Sunbird is able to bring its global experience in developing, engineering, installing and managing rooftop solar plants that are built to the highest standards to deliver green electricity for decades to come.”

Canada Life figures show the 65-year-old with a £100,000 pension pot could buy an annuity linked to the retail price index (RPI) that would generate a starting annual income of £3,896. That’s up from £2,195 in the New Year following a 77% spike in rates this year.
Oct 22.

When u enter your de-accumulation phase, the above might be the option u face. My friend the choice is yours.

How our fund picks can beat the MSCI World by the end of 2024

It has been a forgettable year so far for Trustnet’s fund picks. In January the editorial team selected portfolios we believed had a chance of outperforming markets in 2024, but so far we are not doing well.

As this is my last column of the year – I am soon to be off spending time with my new baby and family – I thought I would take a look at where we stand with two months to go and who I think has the best odds of coming out on top. To do this I am using the probability that any of our funds can catch up to, or overtake, the MSCI World index.

In truth, it looks like a tall task. Our top performers so far this year have made just half the return of the global market index, meaning we should have picked a tracker.. All our funds appear to have little chance of beating the index, but below I will outline the glass-half-full reasons as to how they can turn the tables with two months to go.

Theoretically, the best chance we have to beat the index is senior reporter Matteo Anelli’s  Royal London Sustainable World Trust. has made 8.9% so far this year, still a long way behind the MSCI World’s 16.5%.

With the likes of Microsoft, Alphabet and Amazon among its top 10 holdings, the fund will be geared towards the ‘Magnificent Seven’, which implies it is broadly in the same themes as the wider market.

However, it does not own Nvidia. This has been a hindrance this year, but should the semiconductor stock falter, the fund could soon catch up over the next two months.

News editor Emma Wallis’ RTW Biotech Opportunities is next, up 8.7%year to date. Healthcare has been a good place to invest in 2024, but would need a significant boost in the coming two months. Lower rates should help these growth stocks to outperform, while a sell-off in the tech sector would help arrest its relative performance to the index.

The third most likely to outperform, in my view, is Fidelity China Special Situations, the pick of former reporter Jean-Baptiste Andrieux. JB has left Trustnet to become an investment trust analyst, suggesting he is the most qualified of us to deliver these picks. This gives it credibility immediately.

However, the reason I think this is the third most likely to beat the MSCI World by year-end is because of how volatile the market has been in 2024.

Last week, James Klempster, deputy head of Liontrust Asset Management’s multi-asset team, said Chinese equities are still cheap, JP Morgan Asset Management emerging market macro strategist Nandini Ramakrishan added that China’s stimulus measures signify “a new chapter” for emerging market equities.

Last month the People’s Bank of China freed up about ¥1tn in long-term liquidity by reducing the reserve requirement ratio for banks by 0.5 percentage points, allowing them to lend more and support the economy.

The big overhang is the US election, with both presidential candidates likely to impose tariffs on Chinese goods, although Donald Trump is expected to be more punitive. If Kamala Harris wins, this could improve the outlook for Chinese exports, giving the market a boost.

Revealed: the investment trusts yielding 4.5% or more

 Thursday, October 24

AJ Bell

A central bank interest rate cutting cycle is well underway, the Federal Reserve having slashed US rates by 50 basis points and further cuts expected from the Bank of England following August’s 25 basis point reduction. Falling rates mean lower rates on cash and bonds, so investors searching for long-term income and capital growth may feel compelled to research the market for alternative opportunities.

Helpfully, The Association of Investment Companies (AIC) has published a comprehensive list of the 26 investment trusts that invest in equities and offer a yield of at least 4.5%. Nearly all of these trusts, 23 out of 26 to be precise, currently trade at a discount to NAV (net asset value), while over half (15) sell on a double-digit discount to their underlying assets.

High income from HFEL

A total of 18 trusts yields 5% or more, while a further eight offer yields of between 4.5% and 5%. Of the aforementioned 26 trusts, the highest yielding is Henderson Far East Income (HFEL) at 10.3%. Managed by Janus Henderson Investors’ Sat Duhra, the trust aims to provide a growing annual dividend and capital appreciation from a diversified book of Asia-Pacific-based firms, with top 10 holdings including from world’s biggest memory chips and smartphone maker Samsung Electronics and the globe’s largest contract chip manufacturer, TSMC.

Henderson Far East Income is one of the AIC’s ‘next generation’ dividend heroes – trusts that have increased the dividend for 10 or more years in a row but fewer than the 20 required for ‘dividend hero’ status – having hiked the shareholder reward for 16 consecutive years. The board has an increased willingness to dip into the trust’s revenue reserves to support future payments. Duhra has reduced the trust’s exposure to China, which drove underperformance in full year 2023, and increased positions in India and Indonesia.

Also trading at a premium, and offering a 7.4% yield, is Chelverton UK Dividend Trust, which has outperformed Henderson Far East Income on a 10-year share price total return basis, having generated 85.4% versus the latter’s 50.5% haul.

Steered by David Horner and Oliver Knott, Chelverton UK Dividend aims to deliver a high and growing income by investing in mid and small caps outside the FTSE 100 and returned to a position where the dividend is being paid entirely from the current year revenue surplus after costs. In the future, the board plans to increase dividends by a level in excess of prevailing inflation and use any surplus to replenish the trust’s revenue reserves.

Company	AIC Sector	Yield (%)	Discount/premium (%)	10-year share price total return (%)
British & American	Global Equity Income	8.5	−34.8	-36.6
Marwyn Value Investors	UK Smaller Companies	9.9	−51.3	-30
Premier Miton Global Renewables	Infrastructure Securities	6.9	−16.0	14.8
Blackrock Latin American	Latin America	7.1	−14.2	16.3
UIL	Flexible Investment	8.1	−34.9	38
abrdn Equity Income	UK Equity Income	7.2	−4.6	38.7
Henderson Far East Income	Asia Pacific Equity Income	10.3	2.4	50.5
CT Global Managed Portfolio Income	Flexible Investment	6.4	0.6	56.3
CT UK High Income	UK Equity Income	6.4	−11.2	62.3
Henderson High Income	UK Equity & Bond Income	6.3	−8.2	72.5
Shires Income	UK Equity Income	5.8	−8.2	76.4
European Assets Trust	European Smaller Companies	6.8	−13.0	79.5
Chelverton UK Dividend Trust	UK Equity Income	7.4	2.8	85.4
Blackrock World Mining	Commodities & Natural Resources	6.1	−6.0	128
Lindsell Train	Global	6.7	−20.7	179.5

Table: Shares magazine. Source: AIC/Morningstar (to 27 September 2024)

Help from the heroes

Almost a quarter of the highest yielding investment trusts are fully fledged AIC dividend heroes with at least 20 years of unbroken dividend growth under their belts. They include City of London, the UK Equity Income sector stalwart offering a gateway to large international companies. City of London has achieved 58 years of consecutive dividend hikes, the longest streak amongst the dividend heroes, and upped its year-to-June 2024 payout by 2.5% to 20.6p, ahead of UK CPI (consumer price index) inflation, while revenue reserves increased by 5.8% to 9.4p.

With more than half a century of dividend increases to its name is JPMorgan Claverhouse, on 51 years of undisturbed payout growth, while the Simon Gergel-managed Merchants has notched up over four decades of unbroken dividend growth. Sue Noffke-steered Schroder Income Growth Fund and the Manny Pohl-managed Athelney Trust sit on 29 years and 21 years respectively.

The highest yielding dividend hero is abrdn Equity Income Trust, which offers a 7.2% yield and a dividend which it has increased for 23 years on the spin. While manager Thomas Moore has been finding a number of opportunities across the UK stock market of late, NAV performance has lagged the FTSE All-Share index over the past five years, with factors such as a greater allocation to mid-caps than peers at play.

Going global for income

While 11 of the 26 trusts yielding at least 4.5% emanate from the AIC’s UK Equity Income sector, there are two trusts from each of the following sectors – UK Smaller Companies (Marwyn Value Investors, Athelney), Flexible Investment (UIL and CT Global Managed Portfolio Income) and Asia Pacific Equity Income (Henderson Far East Income and abrdn Asian Income Fund).

Income seekers can also gain exposure to high-yielding trusts targeting other key regions of the globe. BlackRock Latin American offers a 7.1% yield, but this reflects a poor 10-year share price total return of 16.3% delivered in what remains a volatile region, while European Assets is focused on the earnings and dividend growth potential of continental small caps.

Elsewhere, trading on a 5.3% yield is abrdn Asian Income Fund, which offers a diversified entrée into Asia. Canadian Income is an AIC North America sector constituent trading on a double-digit NAV discount with a 4.5% yield.

Disclaimer: These articles are for information purposes only and are not a personal recommendation or advice. The value of your investments can go down as well as up and you may get back less than you originally invested.

££££££££££££££

If u want to own any of the above Trusts that yield less than 7% but knowing that a yield of 7% doubles your hard earned in ten years, u may have to pair trade your choice with a higher yielder by splitting your investment.

These REITs could deliver thousands in passive income over the next 10 years

Story by Edward Sheldon, CFA

These REITs could deliver thousands in passive income over the next 10 years© Provided by The Motley Fool

Real estate investment trusts (REITs) can be a brilliant source of passive income. Here in the UK, these companies are required to distribute at least 90% of their taxable income to shareholders in the form of dividends.

Here, I’m going to highlight two REITs that I think are worth considering for a diversified portfolio today. Both have attractive dividend yields and rising payouts, and look capable of delivering a ton of income for investors over the next decade.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Constant demand

First up, we have FTSE 250 company Safestore Holdings (LSE: SAFE). It’s a self-storage company that has facilities both in the UK and Europe.

If I was looking to build an income portfolio today, this is exactly the kind of stock I’d go for. Storage is a relatively defensive industry as demand tends to stay pretty stable throughout the economic cycle (people always need storage space for one reason or another).Related video: The Importance of Diversification in Your Investment Portfolio (Money Talks News)

At the same time, there’s growth potential as storage companies have the ability to increase their prices (most customers are likely to accept the higher prices instead of going through the hassle of moving all their gear).

As for the dividend, it’s decent. For FY2023 (the year ended 31 October 2023), Safestore paid out total dividends of 30.1p per share, 20% higher than the figure two years earlier.

For FY2024, analysts expect a payout of 30.4p, which puts the yield at about 3.7%. That translates to annual income of around £185 on a £5k investment (dividends are never guaranteed).

Of course, as a property company, Safestore is vulnerable to high interest rates. In recent years, the share price has come down as rates have risen.

With interest rates across the UK and Europe now (appearing to be) on a downward trajectory however, I like the setup here even if the price-to-earnings (P/E ratio) is a little elevated at around 19. I think this REIT has the potential to provide solid returns in the years ahead.

Another REIT I like the look of today is Primary Health Properties (LSE: PHP). It invests in healthcare facilities across the UK and Ireland and currently has over 500 properties in its portfolio.

Like Safestore, this company offers a nice mix of defence and growth potential. On the defensive side, this company receives a lot of its rent from the UK government. So rental income’s unlikely to suddenly fall off a cliff.

Meanwhile, on the growth side, the company looks well positioned to benefit from the UK’s ageing population in the years ahead. As people across Britain get older, demand for healthcare services should rise.

Now, the dividend yield here’s very attractive. Currently, analysts expect a payout of 6.9p for 2024, which puts the yield at about 6.9%. That translates to annual income of around £345 on a £5k investment.

It’s worth noting that the company could raise money from investors in the future to capitalise on opportunities in the healthcare property market. If it was to do this, the share price could experience some short-term weakness.

Taking a long-term view however, I reckon this REIT’s capable of providing impressive returns. The P/E ratio is 14, which seems very reasonable to me.

The post These REITs could deliver thousands in passive income over the next 10 years appeared first on The Motley Fool UK.

££££££££££££££££££

Safestore, the yield is too low to be of interest for this blog.

PHP of interest, maybe one to watch if they raise cash the price may fall and the yield will rise.

Investment company discounts and the October Effect

The October Effect suggests stock declines in October, but in London’s investment companies, there has been a spike in year-high discounts in week 40 of both 2023 and 2024. This may be tied to regional factors, such as anticipation of the UK Budget, or global market issues. While more data is needed, it still raises questions about a potential October Effect impacting UK investment companies.

By Frank Buhagiar

“The October Effect is a theory that stock prices decline in October. One basis for this belief is that nine of history’s 20 largest single-day percentage declines in the Dow Jones Industrial Average (DJIA) happened in the Halloween month.” (Forbes).Thankfully, so far at least, October 2024 hasn’t added to the tally of largest single-day market declines, but could there nevertheless be an October Effect of sorts at work in London’s investment company space today?

Below are two graphs showing the number of investment companies trading at year-high discounts to net assets – the first covers the first 42 weeks of 2023; the second the first 42 weeks of 2024. As can be seen, both graphs show a notable spike in the number of year-high discounts roundabout week 40 of the year. Week 40 coincides with the month of October.

2023

2024

Discounts widen one of two ways – when the value of net assets rises and share prices fail to keep up, or when share prices fall and the value of net assets stays constant or falls less. One swallow does not a summer make but could something be at work here? We’ve asked this question before. Back in May, we noted how the number of 52-wk high discounters topped out in weeks 11-13 (pretty much the month of March) in both 2023 and 2024. As the graphs above show, in both years, a significant drop in year-high discounts was then observed from week 13 onward – roundabout the end of March.

There is a theory here based on the thirteenth week of the year falling at around the change in the UK tax year – the time when investors scramble to utilise Individual Savings Accounts (ISA) subscriptions for the financial year about to end and when early-bird investors look to invest their new year ISA subs at the first opportunity.

As for what investors buy in their stocks and shares ISAs, according to MoneyWeek’s March 2024 article

  How to invest like an ISA millionaire?

Investment companies feature highly, particularly for the most successful ISA investors, the ISA Millionaires. MoneyWeek notes investment trusts account for 41.9% of those ISA Millionaire portfolios that use the interactive investor (ii) platform and 24.1% for all ISA accounts.

Not all investors leave it to the last minute to utilise annual ISA allowances but perhaps enough do to generate a sufficient pickup in demand, resulting in higher share prices and narrowing discounts. And perhaps enough use up their allowances in the first few weeks of the new tax year to keep the number of year-high discounters low. Clearly, more than two years’ worth of data required but, as our May piece concluded, “One to keep an eye on.”

In the meantime, we have another observation to consider. The spike seen in year-high discounts in Weeks 40(ish) of both 2023 and 2024. Coincidence or the October Effect?

The narrative has changed over the past year. Back in October 2023, concerns over higher-for-longer interest rates dominated sentiment. Unsurprisingly, those investment company sectors deemed most sensitive to interest rates contributed the most names to the October 2023 lists. Week ended Friday 27 October 2023, eight renewable energy infrastructure funds, four infrastructure names, eight property companies/REITs, two debt funds, one forestry and nine smaller companies trusts were all trading at year-high discounts. A total of 32 funds.

One year on and interest rates are on their way down in the UK, Europe, the US and other developed countries. The narrative is more how far and how fast rates fall. And this is reflected in the makeup of the 31 funds trading on 52-week high discounts week ended Friday 18 October 2024.Only two renewables are on the list. No infrastructure funds to be seen. Just one property company, Cuba-focused Ceiba Investments – country-specific reasons explain that year-high discount. One private equity company, JPEL Private Equity which is in run-off mode. And three smaller companies funds. Seven interest-rate sensitive sectors compared to 32 twelve months earlier.

That means the bulk of the 31 names in the discount doldrums in Week 42 of 2024 are conventional equity funds. Seven invest in Asia Pacific equities. Another eight in UK stocks. Three from Europe. And two from global sectors. 20 out of 31. As for why this is the case, that may be down to region-specific reasons. Asia Pacific funds, for example, are exposed to the rollercoaster ride that is the Chinese stock market at present. September saw Chinese stocks fly on the back of what broker Winterflood describes as a “stimulus wave” unleashed by the authorities to kickstart the economy and stock market – China’s CSI 300 blue-chip index rallied more than 25% over nine consecutive days. A subsequent pause in the rollout of new stimuli then led to a severe bout of profit-taking – 9 October the CSI 300 dropped 7%. Asia Pacific funds therefore have good reason for featuring heavily in the Discount Watch. No need to call on the October Effect to explain that one.

The appearance of the three European funds on the list can also be explained by region-specific reasons. Last week, the European Central Bank cut interest rates for the third successive time to take the deposit rate down to 3.25%. Compared to the US and UK, where in both cases rates have been cut just once to date, Europe appears to be in a hurry to bring rates down. And for good reason too. Inflation may well have fallen back, but the economic outlook has deteriorated. Hence the muted reaction of European bond and equity markets to the latest cut. Markets too focused on the gloomy low-growth outlook for the region, especially for the larger economies of Germany, France and Italy. Against such a backdrop, no surprise to see European funds on the Discount Watch. As with Asia Pacific, hard to make a case for an October Effect when genuine economic concerns are weighing on sentiment.

That leaves the UK – the two global funds include Lindsell Train which is 77% invested in the UK and Scottish American which, aside from a 35% US weighting, is invested in the UK, Europe and Asia Pacific. Including Lindsell Train, the UK contingent stands at nine, the highest regional representation on the latest Discount Watch. This could be down to a key financial event – the UK Budget. The next Budget is due to be held on 30 October and as that date has been getting closer, the number of UK-focused funds sitting on year-high discounts has been increasing – from zero funds week ended Friday 04 October to two week ended Friday 11 October to nine (including  Lindsell Train) week ended Friday 18 October. Have investors been positioning themselves just in case the Chancellor unveils an unwelcome surprise or two?

What’s more, the last time there was a UK Budget (6 March 2024), a similar spike in UK names on year-high discounts was observed. Week ended 08 March 2024, eight UK funds hit discount-highs compared to just two a week earlier. Goes without saying more than just two years’ worth of data required, but as we said back in May, another to keep an eye on. But if the UK Budget theory does prove to have legs then it might explain an October Effect for the UK, at least for those years when the Budget is held in October/November. And that is more often than not. The 6 March 2024 Budget was something of an outlier. The Chancellor typically stands up at the despatch box in the autumn. A possible theory for an UK October Effect then.

Finally, back to the Forbes article.This goes on to dismiss the October Effect as “an oversimplification of financial market behavior”, citing Yardeni Research’s analysis of the monthly performance of the S&P 500 between 1928 and 2024 that shows the US index actually gained value during the month of October on 56 occasions, losing value 40 times. The October Effect in need of a rebrand as a more-often-than-not positive month perhaps. That may well be true for the US market. The jury is still out, however, for London’s investment companies and the Budget Effect.

The Results Round-Up – The Week’s Investment Trust Results

Six investment companies in this week’s results round-up – Schroder Oriental Income, VinaCapital Vietnam Opportunity, CQS Natural Resources Growth & Income, abrdn Asia Focus, HarbourVest Global Private Equity and BlackRock Smaller Cos – all posting positive returns, but which fund clocked up an +18.2% NAV per share total return for the full year?

By Frank Buhagiar

Schroder Oriental Income’s (SOI) 500%+ return

SOI’s +18.2% NAV per share total return for the full year, more than double the MSCI AC Pacific ex Japan Index’s +8.6% (sterling). SOI’s significant underweight allocation to China differentiates it from the benchmark. The outperformance is no one-off. According to Chairman, Paul Meader, £1 invested in the fund at the time of launch in 2005 would today be worth £6.38 assuming all dividends reinvested. The equivalent figure for the benchmark is £4.14. As for the FTSE 100, the figure stands at just £3.27.

That is of course the past. Can the fund keep up the strong performance? Meader sees “no reason why not. Asia remains a vibrant and growing region, largely unfettered by the headwinds, such as huge government debts and weak productivity growth, faced by Europe and North America. And issues that have troubled Asia in the past, like large current account deficits or poor corporate governance, are generally diminishing.” The numbers good for a penny and a half increase in the share price to 271.5p.

Numis: “The focus on income means the portfolio has significant sector overweights, in Financials (+10.4% at 30 September, excluding cash), while the fund is overweight Technology (+4.3%). It also has geographical biases (overweight in Singapore, whilst Hong Kong is favoured over China). We believe that the fund benefits from an experienced fund manager, Richard Sennitt, who has run open-ended Asian Income mandates at Schroders for over 20 years”.

VinaCapital Vietnam Opportunity (VOF) outperforms

VOF outperformed over the full year: NAV total return of +7.8% (USD terms) compared to the VN-Index’s +4.9%. Share price topped the lot, rising +17.6%. The strong performance though overshadowed by the passing of lead portfolio manager, Andy Ho, in June. VinaCapital CEO, Brook Taylor, has taken on the role of interim lead of the fund, while Andy Ho’s long-serving deputies, Khanh Vu and Dieu Phuong Nguyen, continue as co-lead managers. The two lead managers expressed their “sincere thanks to our diligent and dedicated investment team who have worked tirelessly through this recent period of volatility and personnel challenges”. Shares closed down 4p at 456p on the day of the results.

Numis: “We remain positive on the outlook for Vietnam, which has benefited from diversification away from China. The outlook is supported by a strong and balanced economy, a young, educated population of c.100m and competitive labour costs, with a growing middle class which is driving growth in domestic demand for goods and services. We believe that the shares look attractive on a c.21% discount, supportive by substantial buybacks.”

CQS Natural Resources Growth & Income’s (CYN) capital performance

CYN’s +7.2% NAV per share total return for the year pretty much in line with the MSCI World Metals and Mining Index’s (sterling adjusted) +7.3%, although some way off the +17.4% return of the MSCI World Energy Index (sterling adjusted). Tables reversed over the longer term: over five years, NAV per share has returned +118.7% compared to +73% for the MSCI World Metals and Mining Index and 64% for the MSCI World Energy Index. The investment managers used capital letters to highlight the year’s main drivers “A FOCUS ON ENERGY, GOLD, SHIPPING AND URANIUM HAS DELIVERED IMPROVED TOTAL RETURN”. Encouragingly, as Chair, Helen Green, notes, the new year has got off to a good start “Against a backdrop of global tensions, the Company has continued to perform well since the Company’s year end and remains strongly positioned to benefit from demand in resources, energy, and shipping.” Shares closed down 3p at 190.75p, investors adopting the wait-and-see approach.

Winterfloo:d “Exploration & production, crude shipping and coal represent c.30% of NAV; industrial metals 9%; precious metals >30%; energy transition c.17% (primarily uranium).”

abrdn Asia Focus’ (AAS) sees potential in Asian smaller companies

AAS’ full year NAV and share price rose +7.9% and +8.8% respectively. That compares to the MSCI AC Asia ex Japan Small Cap Index’s +14.1% (sterling) total return and the MSCI AC Asia ex Japan Index’s +7.6%. Chair, Krishna Shanmuganathan, notes the “absolute returns have been reasonable relative to a broader peer group of Asian funds, and your Manager maintains a preference for more diversified exposure to the region versus the small cap index which has become increasingly concentrated across fewer markets.”

It’s an approach that has served the fund well in the past. As the Chair points out over the long term, the NAV has averaged annual growth of +11.9% since inception, “an outstanding level of sustained performance, and reflective of your Manager’s ability to invest in hand-picked smaller companies in Asia that are difficult to access for UK investors.” What’s more, the portfolio managers sound confident for the future “we see much potential in Asian smaller companies, and our portfolio of well-researched Asian small caps offers a unique investing opportunity.” Investors liked what they heard, shares added 3p to close at 283p on the day.

Winterflood: “Asian smaller companies are forecast to generate earnings growth of c.41% in 2024, while trading at a c.24% discount to US small caps.”

HarbourVest Global Private Equity’s (HVPE) share price disconnect

HVPE’s +3% NAV per share growth for the half year, some way behind the FTSE All-World Total Return (FTSE AW TR) Index’s +12.6%. Not enough to dent the fund’s clear outperformance over ten years: NAV per share is up +239% while the FTSE AW TR has only managed +144% (USD). All good stuff then, at least in terms of NAV.

The share price rose +12.7% over the half year to £26.10 after the discount to NAV narrowed from 42% to 34%. But since period end, the share price has fallen back to £23.20. Chair, Ed Warner, thinks the share price has got it wrong “HVPE’s portfolio investments have proven remarkably resilient over the past few challenging years, which speaks to their quality. We view the future for HVPE with confidence and believe that the share price in no way reflects the performance by the Company over many years and the opportunities that we believe lie ahead.” Market is a believer too, marking the shares +1.5% higher by close of play.

Jefferies: “The fund’s prospects remain intrinsically linked to exit activity, not least because of how the ultimate size of the 2024/2025 distribution pool balance is contingent on near-term realisations.”

Numis: “HVPE’s shares trade on a c.44% discount, which we believe is too wide for a high quality manager”.

Winterflood: “In our view, HVPE’s current discount of 41% implies a level of valuation scepticism that does not align with uplifts of +29% across 86% of transaction value during the period.”

BlackRock Smaller Companies’ (BRSC) ahead of the wider market

BRSC’s Half-year Report showed just how well UK small caps fared in the six months to 31 August: NAV up +13.9%, share price up +17.0%, Deutsche Numis Smaller Companies plus AIM (excluding Investment Companies) Index up +13.2%. All comfortably ahead of the wider market: the FTSE 100 Index was up +12.5% while the FTSE 250 Index rose by +12.6%. The opening paragraph of the Investment Manager’s Report, however, suggests it was not all plain sailing “The first six months of this financial year have offered so much that it is even more challenging than normal to find a pithy introduction.” Easy to see why given the macroeconomic/geopolitical challenges faced.

The investment managers don’t appear to be fans of the new Labour Government either “Sadly, their early statements have generated increased uncertainty as the market tries to understand how the government will shape policy to fill the ‘£22 billion black hole’.” Better news elsewhere though “On a global basis the more recent economic data suggests a soft landing is still the likely outcome.” And then there is always valuations to fall back on “the valuation of UK small and mid-cap companies is attractive on an historic basis. As we move through this near-term noise, the opportunity presented by the UK small and mid-cap market should be revealed”. Shares tacked on +1.8% on the day – market not too concerned by what the Labour Government has in store, it seems.

Winterflood: “During HY, the managers added to Leisure names in anticipation of increased spending as a result of rising consumer confidence, as well as companies in the housebuilding and related sectors in light of lower interest rate expectations and the new government’s housing policies.”