Over the 12 months ended 30 September 2022, Majedie Investments produced an NAV total return of -18.2% and a return to shareholders of -24.9%. This compares with a 4% fall in the All-Share and a 4.2% fall in the MSCI All Countries World Index. The dividend was cut from 11.4p to 10.4p (1.8p of which is a special dividend), and shareholders’ funds which five years ago were £183m are now just £117m.
We have already reported on the considerable change that the trust has been through recently, including the sale of its stake in Majedie Asset Management to Liontrust and the decision to appoint a new manager and adopt a new investment policy (this latter decision still needs shareholder approval). The Liontrust deal turned out very poorly as the headline price was less than the valuation of the stake in last year’s accounts and then the Liontrust shares that the fund received for its stake fell in value – all in all this cost the trust £12m.
Each of the funds that the trust holds underperformed its objective over the period with the exception of the Tortoise Fund. The UK equity fund underperformed by 10.7%, global equity by 5.8%, international equity by 8.0%. The Tortoise fund returned 8.6%. Overweights to smaller companies and consumer discretionary stocks and underweights to consumer staples were the problem in the UK. In the global portfolio, the problem seems to be overweight exposures to communication services and healthcare, and not enough in energy. This is repeated in the international portfolio but holdings in SEA and M3 were particularly costly. Consumer discretionary exposure held back the Tortoise fund too but short exposure to futures more than made up for that.
The statement says that the Liontrust funds have all performed strongly since the year end, both in absolute and relative terms. The Tortoise Fund, in particular, has risen by 9.7%. The board intends to retain the current exposure until the meeting on 25 January 2023. If shareholders approve the appointment of Marylebone it is anticipated that the capital will be deployed relatively quickly into the new investment strategy, although the special investments part of the portfolio, will take longer to be fully invested.
MAJE : Majedie reports on very poor year