Investment Trust Dividends

Doceo Results Round-Up

The Results Round-Up: The week’s investment trust results

JPMorgan Global Emerging Market Inc (JEMI) matches the index; Intl Biotechnology (IBT) posts a 15.9% return; BlackRock Greater Europe (BRGE) +16.4%; Henderson Far East Income (HFEL) can’t match that but manages 11.9%; Fidelity Special Values (FSV), the standout up +24.1%; while Scottish Mortgage’s (SMT) half-year numbers can’t add to its long-term record of outperformance.

By Frank Buhagiar

JPMorgan Global Emerging Markets Income’s (JEMI) second half turnaround

JEMI’s net asset value (NAV) total return of +6.3% for the full year almost exactly in line with the MSCI Emerging Markets Index’s +6.4%. That means the second half of the year saw quite a turnaround in performance as the fund was nursing a 5% loss at the half-year stage. Over the five years to end of July 2024, the fund however has the upper hand and by some margin: the +25.3% NAV total return almost double the benchmark’s +12.7%. Meanwhile, the cumulative return on net assets over 10 years was +87.5% compared to +70.3% for the benchmark.

The strong track record serves as a thumbs up for the fund’s stock selection process. As the investment managers explain “Our principal focus is the same as it has been since the inception of the Company: we seek out companies able to produce attractive returns on equity, generate healthy free cash flow and pay shareholders reliable dividends. By identifying stocks with these characteristics, and buying them at attractive valuation levels, we can construct a portfolio with both value and quality attributes.” Well, if it aint broke. Market seems to agree – shares tacked on 2.5p to close at 136p.

Winterflood: “Bottom-up stock-picking methodology resulted in overweight positions in South Korea, Indonesia and Mexico, as well as underweight allocation to India. JEMI is overweight Information Technology, Consumer Staples and Financials, while underweight Materials, Industrials and Healthcare.”

International Biotechnology (IBT) sees green shoots

IBT had a strong year: NAV rose +15.9% compared to the NASDAQ Biotechnology Reference Index’s +15.3%. Good start then for new managers Schroders and a welcome return to form for the sector as a whole after a tough few years. As Chair, Kate Cornish-Bowden, notes “It is rewarding to report on the green shoots of a recovery in the biotechnology sector following an unprecedented period of share price declines in the sector.”

Cornish-Bowden lists several reasons for having a positive outlook including strong fundamentals, ageing populations and innovation in disease areas such as oncology, obesity and neurological conditions. Throw in increasing M&A activity “as large, cash-rich pharmaceutical companies seek solutions to impending drug patent expiries”, compelling valuations “and the potential rewards for investors in innovative companies developing future treatments look more attractive than ever.” Market took a little while to appreciate the results – shares only added 1p on the day to close at 685p. But by 7 November the shares were exchanging hands at 710p each.

Numis “The track record remains strong, with the fund outperforming the index over one, five and ten years, due to its flexible, valuation-driven strategy, adapting to evolving market conditions via selective risk-taking, with a focus on limiting volatility via its approach to binary event risk and a basket approach to key themes. We believe that this approach means that the fund is well-placed to continue this outperformance over the long term.”

BlackRock Greater Europe (BRGE) thinks optimists will be rewarded

BRGE outperformed over the full year – NAV per share returned +16.4% compared to the FTSE World Europe ex UK Index’s +15.8% (sterling terms and dividends reinvested). The investment managers see structural and cyclical tailwinds at work in Europe. Structural, “the European market is home to an ecosystem of companies which possess the enabling technologies required not just AI adoption, but also the energy transition and global efforts to reorganise supply chains.” Cyclical, “we detect a cyclical upturn in a variety of industries like construction, life-sciences and chemicals which have suffered from pronounced volume declines for the best part of two years.” Put the two together and “We see 2025 as a recovery year for earnings and beyond that we envisage a multi-year period of healthy profit growth, alongside the potential for this historic valuation gap to the US to narrow. Those prepared to take the optimistic view should be rewarded over time.” Just not yet – shares shed 4p to 551p on the day of the results.

Winterflood: “Board used discretion to not implement semi-annual tender offer in November, due to market conditions. Key contributors included Novo Nordisk, ASML, RELX and Ferrari.”

Henderson Far East Income’s (HFEL) repositioning pays off

HFEL posted an +11.9% NAV total return for the year. While a tad lower than the FTSE All-World Asia Pacific ex Japan Index’s +13.0% and the MSCI AC Asia Pacific ex Japan High Dividend Yield Index’s +17.4%, the share price total return of +16.6% fared better. According to the fund manager “In many respects the period under review shared several similarities with the year preceding it; India and Taiwan were the strongest markets and technology was a standout sector performer whilst China remained weak and sentiment arguably worsened over the period.” Excellent timing as “Our repositioning of the portfolio at the beginning of the period was positive for performance given that we had predominantly increased exposure to two of the strongest performing markets – India and Taiwan.” Market liked what it heard – shares added 2.5p to end the day at 228.5p.

Winterflood: “Asian dividend growth ahead of the managers’ expectations, aided by South Korea corporate governance reforms and some promising developments in China (several stocks +50% DPS growth). Underperformance vs. Dividend Yield index due to the latter’s concentration and the portfolio underweight to Chinese state-owned enterprises, particularly banks.”

Fidelity Special Values (FSV) looking for the volume to go up

FSV’s NAV total return came in at +24.1% for the year, easily beating the FTSE All-Share Index’s +17.0%. Chairman, Dean Buckley, puts the strong returns down to “a quiet renaissance in the still-unloved UK equity market” as well as the fund’s focus on identifying “quality companies with valuations lower than peers within the UK market.”

It’s an approach that has worked well over the long term too: £1,000 invested in the fund 12 years ago when Alex Wright became lead Portfolio Manager would now be worth £3,055 with dividends reinvested. And there could be more to come thanks to “an improving corporate earnings environment, the prospect of some political stability and a gradual economic recovery” all of which “may help to bring greater attention to the many good companies listed on the London Stock Exchange, which would undoubtedly give further impetus to the market” and, potentially, “be the catalyst to turn a quiet renaissance into something with greater volume.” Market got the message loud and clear – shares added 2p to close at 311.5p.

Numis: “We rate the managers highly and admire the investment approach which has a strong contrarian flavour, looking for unloved stocks where the downside is limited and there is a catalyst for change. We believe that the c.10% discount is an attractive entry point.”

Investec: “since IPO in 1994, the NAV total return is a non-too-shabby 2,817% or 11.8% annualised, 5.2% greater than the FTSE All Share total return CAGR. We regard Fidelity Special Values as a core strategic holding for UK exposure, and the fundamental attractions are enhanced by the current discount.”

Scottish Mortgage (SMT): Man versus machine

SMT reported a +1.9% NAV per share total return for the six months to 30 September. That’s a little short of the FTSE All-World Index’s +3.6%. Different story over longer time frames though. Over five years, NAV is up +88.9%, easily beating the index’s +66.9%, while over 10 years NAV boasts a +347.8% gain compared to the index’s +211.3%.

The growth investor’s interim management statement opens with an admission “Writing the interim report this year was notably different. I didn’t start by sitting down with a blank page. Instead, AI systems competed to provide me with summaries of the most significant events over the past six months. They tried to explain stock price movements and even suggested topics that might resonate with readers.” The statement then goes on to provide a rather matter-of fact run-through of the fund’s various positions in AI, tech, space, China and private companies. None of the usual anecdotes, observations and dare I say colour of previous statements from the company – have a read of the Half-year Report 12 months ago to compare. Same author at the bottom true, but different style. Perhaps the machine did write the whole report after all. Shares were off 7p at 903p at the time of (non-AI) writing.

Jefferies: “The results highlight a meaningful reduction in the proportion of the overall portfolio held in private companies.”

Numis: “The shares are currently trading at c.10% discount, and ultimately a period of strong performance is likely needed to narrow the discount. Scottish Mortgage has a market cap of c.£11bn and therefore flexibility to return capital whilst remaining a large, liquid Investment Company.”

1 Comment

  1. SactFlast

    priligy dapoxetine amazon Prednisolone Temaril P should be used during pregnancy only if the potential benefit justifies the potential risk to the fetus

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

© 2025 Passive Income

Theme by Anders NorenUp ↑