The management of high-yielding Tufton Oceanic Assets (SHIP ) have been applauded by analysts for their ability to shift the portfolio rapidly in the face of changing markets but it has not swayed investors as shares continue to be depressed. 

The £240m portfolio of shipping vessels has seen its net asset value (NAV) total return, which includes a 0.02125 dollar cents quarterly dividend, rise 2.8% in the three months to the end of September. The performance kept it just ahead of the Clarkson Newbuild Price Index, a cost of building new vessels measure, which was up 2.6% over the same period.

Manager of the 8.6%-yielding, Guernsey-listed fund Andrew Hampson said the fund had delivered ‘strong operating profit’ and benefited from a strong product tanker market.

He added that this was outweighed by a ‘fall in the charter-free value of bulkers’, which are merchant ships specially designed to transport bulk cargo such as grain or coal.

Hampson has been bullish on the bulker market and not dissuaded by recent movements, as he employed four bulkers on index-linked charters to benefit from improving rates. 

Numis analyst Ash Nandi said the outlook for shipping was positive over the next few years thanks to favourable supply-demand dynamics. He said Tufton Oceanic benefits from ‘a nimble management team who are able to navigate changing market conditions and position the portfolio towards the segments where they see the best opportunities’.

Nandi noted the fund exited containerships between 2021 and early 2023 as prices declined from Covid-induced all-time high rates and asset values.

The company, which has been actively buying back shares, is on a 28% discount having derated this year over concerns of a global economic slowdown. 

Jeffries analyst Matthew Hose said ‘futher, possibly structural measures, will need to be undertaken by the board to move in the discount since they have already tried buybacks, manager share purchases and proactive capital allocation.

For his part Sifel analyst Sachin Saggar said a re-rating is dependent on a recovery in the dry bulk segment.