Investment Trust Dividends
Assura plc (“Assura” or “the Company”), UK’s leading diversified healthcare REIT, today announces that the next quarterly interim dividend of 0.84 pence per share will be paid on 15 January 2025 to shareholders on the register on 13 December 2024 (the “Record Date”). The Ex-dividend Date will be 12 December 2024.
This interim dividend will be a normal dividend (non-PID).
Key dates:
Ex-dividend date: 12 December 2024
Record date: 13 December 2024
Dividend payment date: 15 January 2025
In October, Stifel Chief Equity Strategist Barry Bannister said in an interview with BNN Bloomberg that the S&P 500 will plunge 26% next year. Bannister called the current stock market “effervescent” — a fancy way of saying it’s a bit bubbly. His concerns include valuation and the overall macroeconomic picture.
Stifel isn’t the only Wall Street firm with a negative outlook. Earlier this month, Morgan Stanley Chief Global Economist Seth Carpenter told CNBC’s Sri Jegarajah that President-elect Trump’s proposed across-the-board S&P 500 cause a “big negative shock” to the U.S. economy. He argued that the tariffs will drive inflation higher, which will, in turn, weigh on economic growth for the U.S. and its trading partners.
Granted, Carpenter didn’t expressly predict a significant downturn for the S&P 500 as Bannister did. However, as the U.S. economy goes, typically so goes the S&P 500 — although the index tends to move up or down in advance of the economic numbers.
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In the grand design of things you’ll secure an A+ with regard to effort and hard work. Exactly where you lost everybody was on all the particulars. As as the maxim goes, the devil is in the details… And it couldn’t be more correct in this article. Having said that, let me inform you what did work. The authoring is definitely rather convincing and this is most likely the reason why I am taking an effort to opine. I do not really make it a regular habit of doing that. Second, although I can see a leaps in reasoning you make, I am not really certain of exactly how you seem to connect your details which in turn produce the actual conclusion. For right now I shall subscribe to your point however hope in the future you actually connect the facts much better.
££££££££££££
The snowball has a portfolio of shares bought for a specific outcome,
to re-invest earned dividends at a yield of 7% plus
Whilst you can copy trade any of the portfolio Trusts, it makes no difference to me as it is in fact a negative for the Snowball, as because the price goes up the yield falls and the Snowball is only about re-investing earned dividends over a long period.
As each person’s risk profile is different to the next person’s so this should be reflected in your portfolio. For example you might want to gamble and have 75% in dividend Investment Trusts and the remaining 25% in a TR portfolio, rebalancing as your move along.
Everyone must invest their hard earned to the best of their ability.
The current Trusts I’m interested in are in the Watch List updated at the weekend but as always it’s best to DYOR.
Miton UK MicroCap (MINI) proposes a voluntary wind-up with a potential rollover into a Premier Miton open-ended fund, offering shareholders a choice between continued micro-cap exposure or a cash exit. Meanwhile, Edinburgh Worldwide (EWI) unveils plans for a £130m capital return and strategic changes to boost performance, amid speculation over SpaceX’s impact on its discount.
Miton UK MicroCap (MINI) announced that the Board thinks “it is in the best interests of shareholders to put forward proposals for a voluntary winding up of the Company.” This follows a high level of redemption requests received for the 2024 Redemption Point after which the Board promised it would discuss the fund’s future with shareholders.
The Board has started discussions with Premier Miton about putting forward a scheme of reconstruction under section 110 of the Insolvency Act 1986 and voluntary winding-up of the Company through a rollover into one of Premier Miton’s open-ended funds. Should the Scheme be put forward, it is expected that a cash exit alternative will also be offered.
Numis: “A rollover may be attractive for people who wish to maintain exposure to the asset class, given the micro-cap portfolio may take some time to sell assets, with price risk.”
Winterflood: “In our view, giving shareholders the option of a cash exit and close to NAV or a rollover into a more liquid vehicle with a similar strategy represents best practice. Nevertheless, we would highlight that the micro-cap strategy was ideally suited to the closed-ended fund structure and would therefore expect an equivalent open-ended fund to invest further up the market cap spectrum in order to manage the associated liquidity issues.”
Edinburgh Worldwide (EWI) became the latest Baillie Gifford-run fund to announce plans to return capital to shareholders. Hot on the heels of last week’s announcement from Baillie Gifford China Growth (BGCG) detailing a conditional tender offer for up to 100% of the issued share capital of the company, EWI provided a company update setting out a number of steps designed to turnaround the fund’s performance. As well as changes to team composition and structure “to increase challenge and enhance performance” and changes to process and approach “to improve decision-making and portfolio discipline”, there’s a commitment to return up to £130m to shareholders in 2025.
The changes are subject to shareholder approval. One notable shareholder, Saba Capital. The US activist investor last disclosed it had a c.18% stake in the fund. Presumably, Saba will be voting for the plans.
Winterflood: “EWI’s discount has tightened considerably in recent months and weeks, and now stands at c.4%, significantly tighter than its Global Smaller Companies peers and Baillie Gifford global stablemates. We attribute this to the buying activity of activist US hedge fund Saba Capital, which now has an 18.1% stake. We suspect the presence of this investor on the share register was a key driver of the Board’s decision to introduce the commitment to return up to £130m of capital to shareholders next year”
Numis has another theory for the sharp discount narrowing: “This may reflect enthusiasm around SpaceX, which press reports have indicated may be undertaking a tender offer to allow existing shareholders to sell at a valuation rumoured to be above the previous valuation in mid-2024. SpaceX was 12.4% of Edinburgh Worldwide’s total assets at 31 October.” SpaceX to the rescue?
Shires Income (SHRS) shares were offering an eye-catching yield of 5.9% as at the end of the latest half-year period. That’s based on the 14.4p current annual dividend rate and the share price as at half-year end. What’s more, that’s after the share price total return for the six-months to end of September came in at a benchmark-beating +14.5%.
The pre-Xmas results dash is on! No shortage of trusts posting double-digit returns: Odyssean OIT, abrdn Equity Income AEI, Schroder UK Mid Cap SCP, Baillie Gifford UK Growth BGUK and European Growth BGEU, Asia Dragon DGN. abrdn New India ANII, the stand out with a +22.8% NAV total return. Other funds reporting include Caledonia CLDN, Biotech Growth BIOG, Utilico Emerging Mkts UEM and Hansa HAN.
By Frank Buhagiar
DGN’s latest Annual Report may be its last as a standalone entity. That’s if the proposed combination with Invesco Asia (IAT) gets the green light from shareholders. In terms of the full-year performance, net asset value (NAV) and shareholder total return came in at +9.3% and +16.7% respectively. The MSCI AC Asia ex Japan Index, somewhere in between, up +12.0% (sterling).
Winterflood: “Biggest detractor was exposure to China, albeit this was ‘significantly reduced’ over the period.”
UEM found the going hard over the latest half-year period due to what Chairman, John Rennocks, describes as “elevated volatility in most markets as uncertainty has dominated”: -1.4% NAV total return compared to the MSCI Emerging Markets’ +7.5%. Tables turned over the longer term though, +9.1% annual compound NAV total return since inception to 30 September 2024 compared to the index’s +7.6%.” Investment manager, Charles Jillings, points out this has been achieved “with a rising dividend payout; lower volatility; and with a portfolio which is significantly differentiated from the MSCI EM Index. For investors who want exposure to emerging markets, excellent performance and comparatively low levels of volatility, UEM should be a compelling investment.”
Winterflood: “-13.4% Real depreciation vs Sterling impacted as 26% of portfolio invested in Brazil”
HAN’s NAV per share increase to 388.5p from 378.8p for the half year eclipsed by the post-period end news that portfolio holding Ocean Wilsons is selling its 56.47% stake in subsidiary Wilson Sons, the largest integrated provider of port and maritime logistics in Brazil. Oceans Wilsons accounts for 29.4% of HAN’s total assets and according to the Report the sale is expected to “realise net cash proceeds of at least US$593m.” Sounds like a windfall could be coming the fund’s way.
Winterflood: “The Ocean Wilson Holdings Board have indicated their intention to return a meaningful percentage of proceeds to shareholders, and HAN awaits further clarification as events unfold.”
BGEU’s +12.1% NAV per share total return for the year couldn’t match the benchmark’s +15.3%. Share price total return was lower at +9.3% which explains the Board’s commitment to a performance-triggered tender offer of 100% of the issued share capital if NAV total return per share underperforms the FTSE European ex UK Index’s sterling return over the next four years. The investment managers sound up for the challenge “The Board has set us a four-year performance-based challenge, and as Managers, we acknowledge and accept this. We strongly believe that the starting point for future investment returns hasn’t been this favourable for many years. We are confident that we will return to delivering the performance our shareholders have every right to expect.”
JPMorgan: “in addition to having a highly active approach and the commitment to a potential exit, BGEU also offers a low fee due to the management fee being linked to the lower of market cap and NAV. We think our Neutral recommendation vs peers in the AIC Europe sector remains fair.”
BGUK’s new Chairman, Neil Rogan, chose a good time to take over the reins. “As Chairman, I am in the fortunate position of writing my first statement for the Company at a time when performance has improved.” Over the half year, NAV per share total return was +8.1% compared to +1.8% for the FTSE All-Share. Share price total return was +11.7%. No resting on laurels. As Rogan admits “There is still much work to be done by the Managers and by the Board to turn around this Company”- over three and five years, the fund has underperformed. And there’s every incentive for the managers because if performance doesn’t continue to improve then a 100% performance conditional tender will be triggered – shareholders will be given the chance to tender their holdings at a 2% discount to NAV if performance fails to beat the comparative index over the five-year period to 30 April 2029.
Winterflood: “Strong share price returns driven by good operational performance at Autotrader, Experian, Games Workshop, Volution, Just Group and AJ Bell.”
CLDN’s NAV Total Return (NAVTR) came in at +0.5% for the first half. Don’t be fooled by the performance. Below the headline number, NAVTR was negatively impacted by foreign exchange headwinds (-3.6%), private capital (-2.8%) and funds (-2.4%). All were offset by the public companies’ segment (+7%). As CEO, Mat Masters, explains, “This period has shown the value of our diversified, global and long-term portfolio.”
Numis: “We believe its record and unique approach, as well as its conservative approach to balance sheet management, leave it well-placed to deliver an attractive return profile to investors.”
BIOG outperformed the benchmark over the half year: +2.7% NAV per share total return compared to the NASDAQ Biotechnology Index’s +1.4% (sterling). As the numbers suggest, it’s been a tough time for the sector. Chair, Roger Yates, notes “For the past few years, biotech companies have had to show remarkable resilience in the face of significant macro-economic challenges, focusing on innovation while also adapting to a shifting economic landscape.” Light at the end of the tunnel though “There are signs that the long-awaited recovery in market conditions has begun.” But Yates is not being complacent, “our Portfolio Manager will need to remain vigilant as we navigate ongoing uncertainties.”
Winterflood: “Both Board and manager expect interest rate reductions to be beneficial to the portfolio and wider Biotech market, with a more stable macro environment expected to reward fundamental stock selection.”
SCP’s NAV per share total return of +17.3% for the year, a little short of the FTSE Mid 250 ex-Investment Trusts’ +21.4% but over five and ten-year time frames, the fund has outperformed. As the report points out “There has been no change in the investment process which has delivered this successful investment performance.” Chairman, Robert Talbut, thinks investors are starting “to recognise the value on offer both relative to other regional equity markets but also compared to historical valuations. Within the wider UK market, the mid-cap sector is looking particularly attractive given earnings growth expectations and healthy dividend prospects.”
Winterflood: “Underperformance attributed to market rotation towards interest rate-sensitive businesses with weaker balance sheets, as well as Real Estate underweight.”
AEI’s full-year NAV total return of +13.3% fell short of the FTSE All-Share by the narrowest of margins -0.1%. Call that an inline performance. Investment Manager, Thomas Moore, has “listened to shareholders who tell me how important the high level of income is for them at a time of an elevated cost of living. I have also listened to shareholders who tell me that they want to see a growing NAV. This year we delivered both, helped by careful portfolio construction and improving market conditions. This shows that income and capital growth can be delivered hand in hand.”
Winterflood: “Stock selection within defensive mega-cap companies helped performance”
OIT’s NAV per share was up +9.8% over the half year. The benchmark only managed +7.6%. Total net assets rose by an impressive +17.8% thanks not only to performance but also to new share issuance. OIT, one of a minority of funds to issue shares during the period, a vote of confidence in the fund’s “concentrated, high-conviction strategy” and investment process which, as Chair, Linda Wilding, explains, “applies a rigorous valuation methodology to ensure it acquires stock at a large discount to private market transactions, and avoids companies which are unlikely to be coveted by alternative owners to public market investors.”
Numis: “we believe that the stockpicking record speaks for itself and that Odyssean represents an attractive and differentiated addition to a portfolio.”
ANII reported a +22.8% NAV total return for the half year (sterling), significantly more than the MSCI India Index’s +11.6%. According to Chairman, Michael Hughes, the outperformance was driven not only by the stocks held, particularly “in the energy, financials, and real estate sectors”, but also by what the fund didn’t hold, specifically “Benchmark bellwether Reliance Industries.” The investment managers note “India faces near-term external risks” but believe “The Company’s downside is well-protected given our quality focus”.
Winterflood: “Managers note ‘ample signs of a resilient domestic economy’ and believe that 12% medium-term earnings growth is achievable.”
If the portfolio makes it’s target for 2025 of 10k, after ten years if the dividends are re-invested at a blended yield of 7% the income target will be 20k.
If you stay invested for another 5 years, the income would rise by another 7k but only with a dividend re-investment plan.
“A journey of a thousand miles begins with a single step” is a Chinese proverb that originates from the Tao te Ching. The meaning of this saying is that even the most difficult and longest ventures have a specific starting point. Similarly, it implies that daunting tasks can typically be begun by doing something very simple.
In a previous post I stated if u bought gilts you are guaranteed not lose any of your hard earned.
Above you would have lost money if u bought at the wrong time.
On the 7th June 2028 the gilt would be redeemed at £100.00 hence the GRY of 4.12% versus the Income yield of 4.45%.
For new readers, don’t panic there are only 3.
One.
Buy Investment Trusts* that pay a ‘secure’ dividend and use those dividends to buy more Investment Trusts that pay a ‘secure’ dividend.
Two.
Any IT that drastically changes their dividend policy must be sold, even at a loss.
Three.
Remember the rules.
* The Snowball will only buy Investment Trusts as most Trusts have reserves to pay their dividends as during the covid crisis. U may find other shares to buy but not for me. KISS
Some yields haven’t caught up with events so please check the yield
price divided by the fcast dividend
before investing the hard earned.
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