Growth Strategies Conference
Growth Strategies Conference - Wednesday 14th October
As with the wider real estate investment trust (REIT) sector, Standard Life Investments Property Income Trust’s (SLI) share price has been hit hard during the COVID-19 pandemic. Rent collection rates have been impacted with many tenants struggling during the crisis and property values have fallen.
In June, faced with the task of replacing its longstanding portfolio manager, Alistair Mundy, Temple Bar Investment Trust’s (TMPL’s) board reiterated its commitment to a value style of investing. The board has now opted to hand the management contract to Nick Purves and Ian Lance of RWC Partners, two managers with considerable experience of managing income portfolios using a value-style approach. Value investing, where managers buy stocks that are valued more cheaply than market averages – based on measures such as price/earnings, price/book and yield – is deeply out of favour. The RWC team says that value stocks have never looked more unloved in the 30- odd years that they have been managing money. In their view, this makes it imperative that TMPL investors keep faith with the strategy and it also means this is an attractive entry point for new investors. One important change, however, is a cut to TMPL’s dividend to a level that the RWC team believes will be more sustainable.
Since our most recent note, the managers of Aberdeen Emerging Markets Investment Company (AEMC) have significantly increased the fund’s exposure to China. With 38.9% of the fund now allocated to China and 72.5% to wider Asia-Pacific, extensive exposure is provided to the region that has been the quickest to return to near-normal economic activity. Asian exposure is supplemented by pockets of strength elsewhere, such as in Romanian equities and frontier market bonds. AEMC continues to trade at what seems an excessively wide discount to its peer group, particularly when also factoring in its dividend yield and low ongoing charges.
A collation of recent insights on markets and economies taken from the comments made by chairmen and investment managers of investment companies – have a read and make your own minds up. Please remember that nothing in this note is designed to encourage you to buy or sell any of the companies mentioned.
Over three years, JPMorgan Japanese Investment Trust (JFJ) is the best-performing trust in its peer group of competing funds by some margin (see page 15). The trust’s remarkable performance record has been achieved by following a conviction-driven stock-picking approach that focuses on quality and growth, two aspects that have been in demand in a world tackling COVID-19.
Following on from an exceptional year of performance for the ordinary shareholders of Premier Global Infrastructure Trust (PGIT) in 2019, the trust had a good start in 2020. Whilst it suffered heavily in the pandemic-related market crash, it has bounced back strongly (in both cases the moves were amplified by the gearing effect of PGIT’s split capital structure). By the end of July, it had recovered the lost ground, and has seen further gains in August. This is important as 2020 is a seminal year for PGIT.
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