Menhaden made some money in 2017 – Menhaden’s NAV total return for the year ended 31 December 2017 was +7.8% (2016: +1.8%) and the share price total return was +3.2% (2016: -13.8%). The MSCI World Total Return Index (in sterling) increased by 11.8% (2016: +28.2%). By way of additional comparison, the WilderHill New Energy Global Innovation Index (in sterling) rose by 17.5% (2016: +11.5%) and the AIC Environmental Sector rose by 11.3% (2016: +21%).
The board has not recommended a final dividend for the year. It says that it does remember the commitment in the prospectus to target a dividend yield of 2% per annum of the average NAV. The target implementation date for the dividend was 31 December 2017. However, the company didn’t have the earnings to make this possible without paying the dividend from capital and the board doesn’t think this is a good idea.
Notwithstanding another year of sub par performance, the board says it “has been encouraged by the steady improvements in NAV performance this year, which reflect the refinement of the Portfolio Manager’s investment strategy and the work they have done to re-position the portfolio. The Board will continue to keep the ongoing development of the portfolio under close review“.
[QD comment: Private Eye (no. 1466, published 23 March 2018) has queried why Menhaden, which tried to bill itself as an environmental fund at launch, has holdings in Airbus and Volkswagen, to which we would add – why also Safran? which makes among other things missiles and military drones. These three stocks account for 24.5% of the portfolio. We understand that part of these companies’ businesses is focused on producing more environmentally friendly planes and cars but it is only a small part of what they do. A bigger question though is why the board is persevering with a manager that has done so badly and seems pleased that the NAV has gone up at all this year when an investment in the index that the manager helped design has outperformed it by almost 10%. The board hopes that the discount, which is 22% at the time of writing, will close on the back of more marketing. To which we would ask, which environmentally conscious investor is going to pile into a fund that invests in planes, cars and missiles?]
MHN : Menhaden made some money in 2017