Doceo Trusts for DYOR

Another bumper month for the Doceo investment trust portfolios
The last four weeks have seen more gains for the three portfolios of listed funds. The biggest gains were seen, not unsurprisingly, in the growth portfolio.

By
David Stevenson
12 Mar, 2024

Later on last year (and January this year) I mapped out three investment trust portfolios for Doceo readers: an income portfolio targeting a yield of above 4%, a growth portfolio and a balanced, cautious portfolio (released mid-January). Last month I reported that two of the three portfolios had recorded solid gains but that the balanced portfolio was lagging– at that point (in mid-February) it had notched up a small loss of -1.9%. One month on that portfolio has recovered its mojo and is now up 0.9%. Given the strong state of US and global markets, you won’t be surprised to learn that the Growth portfolio has surged ahead – through to mid-February it was up 9% in price return terms, whereas it’s now up 13.37%. Last but by no means least the income portfolio is now up just a tad under 6% in price return terms since launch in mid-November – against a return of 5.14% at the mid-February mark.

Asset Class Fund % Initial Price Current Price Change

Equities 50%
MYI Murray International 20% 2.44 2.475 1.4
AGT AVI Global 20% 2.18 2.295 5.3
EGL Ecofin Global Utilities 5% 1.67 1.5575 -6.7
CCJI CC Japan Income Growth 5% 1.78 2.045 14.9

Alternatives and Bonds 50%
RICA Ruffer Investment Company 30% 2.65 2.63 -0.8
BIPS Invesco Bond Income 10% 1.71 1.72 0.6
BBGI BBGI Global Infrastructure 5% 134 127 -5.2
TRIG The Renewables Infrastructure Group 5% 112.6 103.5 -8.1

Some funds within these three portfolios have had an especially strong few weeks. Over in the growth portfolio for instance private equity fund HgCapital has surged by just under 10% in the last month. As I write this note, HgCapital Trust has just released its annual results and a note by analysts at Numis sums up the progress this trust has made nicely: “The NAV of 500.5p at December 2023, (0.4% above the company’s initial estimate) represents a 11.1% NAV total return which demonstrates a consistency of returns that we expect to continue, driven by the portfolio of companies with high levels of recurring revenues and attractive margins (30%). The last twelve months’ revenue and earnings growth were 25% and 30%, respectively. Over the long-term, earnings growth is the key driver of value creation.”

Exposure Ticker Fund % of model portfolio Initial Price Current Price Change %

Global equities ATST Alliance Trust 50% 10.76 11.99 11.43
Private equity: mid and late stage HGT Hg Capital 7.5% 4.07 4.59 12.78
PIN Pantheon International 7.5% 2.96 3.18 7.43
Private equity: early stage GRW Molten Ventures 7.5% 2.43 2.44 0.41
CHRY Chrysalis Investments 7.5% 0.7 0.875 25.00
Sector themes: healthcare BIOG Biotech Growth Trust 10% 8.25 9.8 18.79
Sector themes: technology ATT Allianz Technology Trust 10% 2.89 3.57 23.53
Alliance Trust has also surged ahead in the last month with its share price up just over 9%. A note from analysts at Investec sums up this global equity trust’s strong performance to date: “2023 was a vintage year for Alliance, with impressive absolute returns materially ahead of benchmark and open and closed-end global peer group averages. We highlight that Alliance is now ranked in the top quartile in this extended peer group over one, three and five years. We believe that growing recognition of this performance record, combined with effective discount management has resulted in Alliance continuing to trade within a narrow discount range, an experience that contrasts starkly with the wider closed-end industry which has endured a significant de-rating and elevated and damaging discount volatility. Looking forward, the manager notes that when free money ends, the strength of companies matter, while macro risks remain high and equity markets are not cheap; while this environment will inevitably bring challenges, we believe Alliance Trust is well-positioned to continue to outperform.” I’d also highlight tentative signs of a bounce back in the share price of listed venture capital fund Molten Ventures. The shares advanced a little over 8% in the last four weeks, not off any particular news or developments. Sentiment to this large listed VC has been dreadful in the last year, with few obvious buyers and lots of annoyed sellers. But the valuation discount looks a tad extreme and maybe this is a sign that sentiment is at long last improving. Over in the income portfolio, I’d highlight JPMorgan Global Growth and Income’s latest six- month numbers which showed NAV up 9.2% on a total return basis in Sterling, outperforming the 7.0% return from the MSCI AC World Index. Numis analysts noted that the “outperformance was particularly impressive in 2023 given market performance was driven by a small number of US tech stocks, and the approach (of the JPMorgan fund) seeks to combine ideas in both “growth” and “value” styles”.

Fund Ticker Allocation Initial Price Current Price Gain

JPMorgan Global Growth and Income JGGI 20% 4.88 5.49 12.50
Murray International MYI 20% 2.37 2.475 4.43
North America Income NAIT 10% 2.64 2.845 7.77
ECOFIN EGL 10% 1.52 1.55 1.97
Invesco Bond Income Plus BIPS 10% 1.62 1.72 6.17
BioPharma Credit BPCR 10% 0.828 0.889 7.37
HICL HICL 10% 1.3 1.27 -2.31
TwentyFour Income TFIF 10% 1.01 1.06 4.95

I’ll finish by highlighting the only real disappointment of the last four weeks, in the income portfolio – BioPharma Credit which has slipped by 4.4% over the last four weeks in share price terms. The discount had narrowed down to close to 5% but is now back out at 7.6%. To be fair, the shares have advanced by 7% since we launched the income portfolio in mid- November, so this is probably – I would guess – more driven by profit-taking amongst some institutional shareholders who’d bought the shares when they were on a much bigger discount. There’s been no particular news flow about the lending fund although I would suggest that many investors are now focused on what the fund will do with its huge mountain of cash following some recent repayments. News on deployment – new loans – will be especially important for the share price moving forward.