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Gabelli disappoints in year of sterling strength

Gabelli disappoints in year of sterling strength – Gabelli Value Plus made a negative 6.5% return on NAV for the year ended 31 March 2018, underperforming the Russell 3000 Value Index, which returned -4.5% and the S&P 500 Index which made a positive 2.0% return for that period. a widening discount meant that the share price return was -12.8%. The directors are recommending a final dividend of 0.6 pence per share (down from 1.2 pence, reflecting lower net revenue for the year).

A stronger pound relative to the US dollar was the main reason why returns to UK investors were negative. The chairman says that “for most of the year the portfolio held 20%-30% of its capital in areas not correlated to the market’s direction. This included investments in announced merger situations and cash holdings. With the benefit of hindsight, this was unhelpful given that the market pushed persistently higher during the year“. The relative performance of the portfolio was also held back by a lack of exposure to technology platforms, such as Facebook, Apple, Amazon, Netflix and Google (which wouldn’t suit Gabelli’s value style).

The manager says that the best five contributors to returns were holdings in Hewlett Packard Enterprise, Ryman Hospitality Properties, Viacom Inc., Harris Corp. and Myers Industries. By contrast holdings in EW Scripps Co, Mueller Industries Inc., Navistar International Corp., DISH Network Corp. and Bank of New York Mellon Corp. detracted from returns. The statement provides analysis on each holding.

GVP : Gabelli disappoints in year of sterling strength

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