Investment trust recommendations featured in a number of papers over the Christmas holiday.
At the Sunday Times, City editor Jill Treanor plumped for HarbourVest Global Private Equity (HVPE ). ‘All the signs are that private equity will continue to do well as the pandemic enters its third year,’ said Treanor in a Boxing Day special citing Refinitiv data showing £30bn of London companies were bought out last year.
HVPE, which invests in and alongside funds run by US private equity giant HarbourVest, owns stakes in Chinese fast-fashion business Shein and American crypto exchange Coinbase in its diversified £2.7bn portfolio.
The shares soared 47% last year but remain 15% below their net asset value (NAV), although that discount narrowed from 28% since last January.
Treanor’s tip may be worth noting. Last year colleague Oliver Shah tipped rival Chrysalis Investments (CHRYS ), which rose 29%.
Meanwhile Sunday Times’ columnist Ian Cowie was in optimistic mood this weekend outlining ‘five reasons to be cheerful’ this New Year.
Predicting healthcare funds and shares will do well in the 2020s in the way that tech rivals did in the 2010s, Cowie said he was maintaining his exposure via International Biotechnology Trust (IBT ) and Worldwide Healthcare Trust (WWH ), the ninth most valuable holding in his ‘freedom fund’. Both can be bought on small discounts of 4% and 1% respectively.
And with household fuel bills set to soar when price caps are lifted in April, Cowie, a former columnist at this website, said he wanted to own shares in businesses that sell energy.
‘Ecofin Global Utilities & Infrastructure (EGL ), the investment trust that owns solar and conventional electricity assets, has pumped up its share price from £1.52, which I paid in September 2019, to £2 now and continues to yield 4.1%.’
EGL shares currently stand 6.5% below NAV, slightly wider than the 2% average discount of last year.
Ben Yearsley of Shore Financial Planning told the Mail on Sunday he was focusing on Europe, Asia and renewable energy this year.
In Europe, he was looking for a comeback by European Opportunities (EOT ), which still languishes on a 10% discount after former star fund manager Alexander Darwall’s problems with the collapse of German payments processor Wirecard in 2020.
By contrast, Yearsley was prepared to pay a small 3% premium to access the impressive growth track record of George Cooke at Montanaro European Smaller Companies (MTE ), which extended its long-term run with a 33% total return last year.
‘Europe has been unloved as an investment area for a long time. Yet company profits are rising, although omicron might put a spanner in the works,’ said Yearsley.
Edward Brown, a retired private investor, told the paper he would continue to back Nick Train’s Finsbury Growth & Income (FGT ). Despite a comparatively disappointing year for the UK equity income trust, Brown was impressed with its quality growth holdings in the likes of Diageo, Remy Cointreau, Burberry and Unilever.
‘Hopefully, when the world economy throws off the straitjacket of coronavirus, these consumer-focused businesses will flourish. Train is an outstanding manager and you get the benefit of his expertise via the trust at a bargain 0.6% a year,’ Brown said.
Personal finance editor Jeff Prestridge likes global investment trusts that spread risk and opportunity and generate a growing income to boot. Bankers (BNKRS ), a £1.5bn ‘dividend hero’ run by Alex Crooke at Janus Henderson that has increased payouts for 55 years, was his choice this year.
Although Prestridge admitted its performance would not necessarily blow investors away, ‘the portfolio has a bit of everything – tech stocks such as Microsoft, beauty products business Estee Lauder and escalator manufacturer Otis Worldwide.’
Big, perhaps a bit boring, he suggested, but very solid, and currently on a 1% discount.
Prestridge was also impressed with Scottish American (SAIN ), the £950m Baillie Gifford global equity income trust about to declare its 48th consecutive annual dividend increase. Fund manager James Dow told the personal finance editor the trust was less volatile than the group’s FTSE flagship Scottish Mortgage Trust (SMT ).
‘We’re steadier and we provide a solid income stream,’ Dow told Prestridge. The shares stand on a small 3% premium to NAV.
Elsewhere in the paper, James Carthew, head of investment companies research at QuotedData and a columnist on this website, tipped Polar Capital Technology (PCT ) as ‘a good long-term buy’.
The £3.7bn closed-end fund stands on a 5% discount, narrower than the 8% average of the past year, having grown over 18% in 2021 to lift its three-year total return to 150%, although that lags the Dow Jones World Technology index.
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