Trusts, ETFs & Funds

Trusts, ETFs & Funds equity research

Explore the latest equity research for companies within the Trusts, ETFs & Funds sector. Funds in this sector provide investment opportunities via equity and non-equity investment trusts, as well as exchange-traded funds.

Trusts, ETFs & Funds equity research

06 Nov 18

THE MONTHLY November 2018

In addition to Hardman’s monthly analysis of client stocks, the thorny issue of market disruption – a popular theme currently - is also addressed. In a wide-ranging article, Hardman’s utilities analyst, Nigel Hawkins, assesses the impact that market disruption has already made. In some sectors, notably telecoms and aviation, market disruption has been apparent for many years, as the rise of Vodafone, Ryanair and easyJet demonstrates. However, in some sectors, such as oil and housebuilding, structural changes have been modest – the dominance of the big players endures. For investors, there is real interest in those sectors where changes are underway. The UK groceries market, which may shortly become a duopoly, is a case in point. And, intriguingly, who knows if there is a company currently languishing in AIM, which will attain a £50bn market valuation within the next decade?

Companies: OPM AVO AGY APH ARBB AVCT DISH BNO BUR CMH CLIG CSH DNL DPP GTLY GDR HAYD KOOV MCL MUR NSF OXB PHP RE/ REDX SCE SIXH TON VAL VTA W7L

16 Oct 18

Target price increased – buying opportunity

Equity investors are usually looking for companies that have opportunities to deploy incremental capital at high returns. Burford Capital is, in our view, a prime example of this as it continues to apply its legal and financial skills to the business of law. It’s recent, well-timed, 5% placing at 1850p to raise c.$250m looks to us simply a logical response to the ever-expanding opportunities, on which we comment herein. This has coincided with market volatility, hitting the best performing shares on AIM the hardest. We have updated our estimates (3-4% reduction FY’18 and ’19, 5% increase FY’20) and increase our 12m TP 6% offering a 29% TSR. The exaggerated fall in the shares offers a compelling buying opportunity, in our view.

Companies: Burford Capital

01 Nov 18

Share & share alike

Global equity markets in October reverted to a pattern that seen in the past – sharp falls and increased volatility. The usual reasons of Brexit uncertainty, the impact of global trade tariffs and heightened geo-political worries and a raft of disappointing Q3 results in the US & UK punctured some of the market optimism. Both countries’ markets have now surrendered their progress year to date. The UK Budget helped things to stabilise here but continuing volatility seems likely. In Share News & View we comment upon Bloomsbury, Braemar*, Location Sciences*, Nektan*, PCF*, Tricorn* and Warpaint*.

Companies: AOR APC BONH BMS CTG CRPR DMTR ESC EUSP FDM FA/ LSAI NKTN PCF SNX TCN W7L

12 Sep 18

Share & share alike

Here we go again – the company reporting season is gathering pace. The MPC is likely to leave rates unchanged although expectations still remain for an increase next year. The UK economy expanded at a faster pace in July helped by the weather and better retail sales. General sentiment continues to be impacted by tariff concerns, combined with Brexit uncertainty. As Table 1 shows, all major indices have fallen over the last month. In Share News & Views, we comment on AorTech*, Bonhill*, DeepMatter*, EU Supply* James Fisher, Haynes, Hunting , Location Sciences*, Marshall Motor and Synectics*.

Companies: AOR APC BMS CRPR DMTR ESC EUSP FDM FA/ GETB LSAI PCF SNX TCN W7L

19 Oct 18

Strong NAV performance, and total returns

Urban Logistics (SHED LN) was launched in April 2016, and has since raised further equity (market cap now in excess of £100m) on the back of strong NAV growth from 94p at IPO to 129.21p as at 30th September 2018, equivalent to an annualised growth rate of 13.8%. In addition, the Company has paid in excess of 6p dividends per annum since IPO. Including the gearing facility of £64.4m which is provided by Barclays and Santander it has invested gross assets of approx. £174m. Its investment focus is on smaller, single let logistics centres across the UK that are well located for ‘last mile’ and regional delivery. The experienced management team have built up a portfolio of 34 assets all acquired off-market at an attractive average net initial yield of 7.0% since IPO. In respect of the year ending 31st March 2018 the Company has paid dividends totalling 6.3p putting the shares on a 5.2% yield. The Company has today released a trading update for the interim period ended 30th September showing strong NAV growth over past six months up 5.5%. Interim results are expected on 15th November.

Companies: Urban Logistics REIT

14 Dec 16

N+1 Singer - Burford Capital - A gorilla is born

Burford has announced the acquisition of its largest competitor, Gerchen Keller Capital (GK), for $160m, plus $15m contingent, in a significantly value accretive deal. GK brings high quality asset management fee income together with access to the substantial pool of private institutional capital. We have initially upgraded our EPS estimates for 2017 and 2018 by 9.7% and 15.4% respectively and our 12 month price target is increased to 568p reflecting both the increased quality and quantity of earnings. This combination of the world’s #1 and #2 players in litigation finance puts them way ahead of the competition in terms of capability to handle large and complex cases. We will be writing in further detail on this combination in due course.

Companies: Burford Capital

28 Mar 18

Conservative and boring

In the words of its manager, Ian Francis, CQS New City High Yield Fund (NCYF) is really conservative and boring! However, we think Ian’s description undersells the fund. NCYF offers a compelling yield and has beaten the consumer price index, Libor and the MSCI UK Index by significant margins over the last 10 years; all the while providing low volatility returns. Furthermore, its premiumrating(anaverage of 5.5% during the last year) and its ongoing share issuance (5.3% during the last year) suggest that it is delivering what investors want.

Companies: CQS New City High Yield Fund

02 Jul 18

H1 Review

Best Ideas - 2018 H1 Review

Companies: SAA VP/ GLE AMO IOM HSP CVSG EKF PGIT VRP RLM AVG SOG DNLM SFR YU/ CBP

07 Aug 18

A good time to buy into CLOs

Blackstone/GSO Loan Financing (‘BGLF’) is the only listed investment company on the London Stock Exchange that invests in European and US CLOs, the former complying with European CLO risk retention rules. The company is run by an experienced manager, GSO Capital Partners, part of The Blackstone Group (‘Blackstone’), in a low cost management structure with ongoing charges of just 0.5%. On top of that, the interests of company’s managers are well aligned with investors, since Blackstone holds a substantial proportion of the company’s shares.

Companies: Blackstone / Gso Loan Financing

24 Sep 18

LIBERUM: GLI Finance* - Strong growth of the core lending business, somewhat undermined by further write down of FinTech Ventures

Sancus BMS has had a good first half with revenue growth of 42%, in-line with our expectations. Opex control has been impressive, with costs down 8%.

Companies: GLI Finance

04 Oct 18

‘Winter is coming’

The managers of Henderson Diversified Income (HDIV) are increasingly cautious on markets. Co-manager, John Pattullo, went as far as to quote ‘Game of Thrones’ in his latest blogpost. Not only are HDIV’s managers convinced that the upward phase of this economic cycle is drawing to a close but also that inflation, which has been on a rising trend in recent times, is nearing its peak. They say that we remain in an environment of low to no growth, low inflation/deflation and low interest rates by historical standards. This stance is reflected in the positioning of HDIV’s portfolio and the fund’s recent performance.

Companies: Henderson Diversified Income Trust

04 Oct 18

THE MONTHLY October 2018

We are in the midst of the Conference season for political parties and trade unions in Britain. We all have a lot on our minds, with generational constitutional issues to the fore, but these have come to the fore after many years of concerns building up about citizens’ ‘place in the world’.

Companies: OPM AGY ARBB AVCT DISH BNO BUR CMH CLIG DNL DPP GTLY GDR HAYD KOOV MCL MUR NSF OXB PHP RE/ REDX SCE SIXH TRX TON VAL VTA W7L

04 Oct 18

‘Winter is coming’

The managers of Henderson Diversified Income (HDIV) are increasingly cautious on markets. Co-manager, John Pattullo, went as far as to quote the famous “Winter is coming” line from ‘Game of Thrones’ in his latest blogpost. Not only are HDIV’s managers convinced that the upward phase of this economic cycle is drawing to a close but also that inflation, which has been on a rising trend in recent times, is nearing its peak. They say that we remain in an environment of low to no growth, low inflation/deflation and low interest rates by historical standards. This stance is reflected in the positioning of HDIV’s portfolio and has fed through into the fund’s recent performance.

Companies: Henderson Diversified Income Trust

26 Oct 18

Seneca Global Income & Growth Trust - Ongoing moves to a more defensive portfolio

Seneca Global Income & Growth Trust (SIGT) aims to generate an average total return of at least CPI +6% pa, with low volatility, over the course of a typical business cycle. It also aims to grow its annual dividend at or above the rate of UK inflation. SIGT’s manager seeks undervalued investments across a range of asset classes. It also uses tactical asset allocation (TAA) in the context of a longer-term strategic asset allocation (SAA). SIGT’s investment team continues to find interesting opportunities, researching niche assets that other managers may be unable to consider.

Companies: Seneca Global Income & Growth Trust

30 Oct 18

HarbourVest Global Private Equity - Diverse and selective

HarbourVest Global Private Equity’s (HVPE) first-half results showed good progress in NAV (+6.8% in US$ terms), ahead of its listed equity benchmark and a private equity index, both of which were negative over the period. Looking ahead, HVPE notes the high valuations prevailing in the private market and the risks of further listed market volatility. In this environment, the portfolio’s diversification and HarbourVest’s experience in manager selection are likely to be particularly valuable attributes.

Companies: Harbourvest Global Private Equity

09 Oct 18

Supermarket Income REIT Investor Overview

01 Oct 18

Bitesize briefing - Fidelity Japan Trust

11 May 18

Harbourvest - 10 years of success and the future of Private Equity

01 Mar 18

Executive interview - Seneca Global Income & Growth Trust

14 Sep 18

Downing Strategic Micro-Cap Investment Trust plc

19 Feb 18

Gresham House Strategic plc - An Introduction

15 Jun 16

Executive Interview - Richard Ramsay, Chairman of Seneca Global Income and Growth Investment Trust

14 Feb 18

Executive interview - Canadian General Investments

25 Oct 18

Supermarket Income REIT (SUPR) at ShareSoc October 2018

12 Feb 18

121 Mining, Cape Town - Beowulf Mining

27 Jan 14

Analyst Interview – Witan Investment Trust

12 Feb 18

121 Mining, Cape Town - Kodal Minerals

28 Sep 17

HarbourVest - Company Overview

12 Feb 18

121 Mining, Cape Town - Avesoro Resources

25 Oct 18

Executive interview - Seneca Global Income & Growth Trust

Latest Content

BSIF FSFL LXI

Fidante Daily Digest

Bluefield Solar Income – Q3 2018 NAV, credit facility and acquisition | Foresight Solar – Q3 2018 NAV | LXi – Acquisitions and new loan facility

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13 Nov 18
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CQS New City High Yield Fund

Escalators do not go to the sky!

Ian “Franco” Francis, the manager of CQS New City High Yield (NCYF), says that although markets seem buoyant, investors should be warier. He sums up his feelings with a quote from his former boss who cautioned him by saying “Escalators do not go to the sky”. This is not to say that the market is devoid of opportunities (for example, he sees these in financials and discount consumer retail), but investors must be selective and position themselves appropriately.

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13 Nov 18
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CQS New City High Yield Fund

Escalators do not go to the sky!

Ian “Franco” Francis, the manager of CQS New City High Yield (NCYF), says that although markets seem buoyant, investors should be warier than they are. He sums this up with a quote from his former boss, who cautioned him by saying “Escalators do not go to the sky”. This is not to say that there aren’t any opportunities in the market (for example, currently he sees these in the financials and discount consumer retail sectors), but investors must be selective and position themselves appropriately.

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13 Nov 18
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TMMG NQMI AFHP JAN NTBR TRT MXCT EML ALM

Small Cap Feast

Titon holdings—international manufacturer and supplier of ventilation systems and window and door hardware. No capital raise. Due 10 Dec. Mkt cap c.£22m. Greenfields Petroleum (TSX-V:GNF) production focused company with operated assets in Azerbaijan seeking AIM dual listing including $60m private placement. Mkt cap $12.6m CAD Finncap—proposed acquisition of M&A adviser Cavendish Corporate Finance and AIM admission. Offer TBA Crossword Cybersecurity PLC* (NEX:CCS)—the technology commercialisation company focusing exclusively on the cyber security sector is investigating the possibility of AIM admission. The Company is proposing to raise up to £2.25 million before the end of December, conditional on Admission. The Panoply parent company of a digitally native technology services group founded in 2016 with the aim of identifying and acquiring best-of-breed specialist information technology and innovation consulting businesses across Europe, is looking to join AIM. Offer TBC, expected late November 2018.

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12 Nov 18
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Gore Street Energy Storage Fund

Opportunities in an evolving market

Gore Street Energy Storage Fund (GSF) announced its interim results last week. The fund is now c.50% committed or invested. It is in exclusive or at an advanced stage of negotiations for another 66MW of storage capacity (approx. value of £60m). It is negotiating on an additional pipeline of c.152MW. The National Grid (NG) is introducing wide ranging changes to the market for balancing services. While pricing for FFR contracts has declined, the IRRs for the projects in its pipeline remains c.10%. GSF believes that rising energy arbitrage revenues will underpin these project IRRs. The Board has declared an initial interim dividend of 2p per share for the period to 30 September 2018, which is fully covered by the cash to be distributed from the operating SPVs. We continue to see the storage market expanding rapidly and recommend investors buy GSF for uncorrelated returns with a strong income component.

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12 Nov 18
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TRIG WHR NRI

Fidante Daily Digest

TRIG - Renewables Infrastructure Group – Proposed fundraising | WHR – Warehouse – Interims to 30 September 2018 | NRI – Northern Investors – Interims to 30 September 2018 and liquidation

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12 Nov 18
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BNOCMHRE/SCEELCOARBBSIXHTONAPHMURITVAGYEMECLIGZOOGDRDPPOPMAVOCSHDNLOXBKOOVHAYDGMDNSFREDXVALGTLYW7LRREPHPPURPAVCTMCLVTABURDISH

Martin Currie Asia Unconstrand Trust

Martin Currie Asia Unconstrained Trust - Deep discount and attractive yield

Martin Currie Asia Unconstrained Trust (MCP) aims to deliver growth in line with nominal Asia ex-Japan GDP on a rolling three-year basis. It follows a detailed, bottom-up approach to investing in a concentrated portfolio of 20–30 of Asia’s highest-quality and most sustainable businesses, unconstrained by a benchmark. Although market conditions have become more challenging for Asian equities, MCP’s manager Andrew Graham believes the portfolio’s high-quality companies are poised to do well in this environment. He also notes the trust’s performance is less volatile than the MSCI AC Asia ex-Japan index. A dividend policy change in 2017 allowing payment from capital reserves, in addition to revenue income, has materially increased MCP’s yield. Unlike one-off special dividends, it is the board’s intention for this higher overall payout to endure. At 4.9%, MCP’s dividend yield is one of the highest among peers.

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09 Nov 18
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Gore Street Energy Storage Fund

Fidante Daily Digest

M&G Credit Income – Results of IPO | Gresham House Energy Storage – Results of IPO | Gore Street Energy Storage – Interims to 30 September 201

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09 Nov 18
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3IN THRL INPP

Fidante Daily Digest

3i Infrastructure – Interims to 30 September 2018 | Target Healthcare – Results of fundraising | International Public Partnerships – Financial close on Dudgeon OFTO

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