Tech underweight weighs on Global Opportunities Trust

The Global Opportunities Trust (GOT) has announced its annual results for the year ending 31 December 2023. The company’s NAV total return was 1.7% while shares fell 3.6% with the discount widening to 18.6% at the end of the year . In comparison, the global market benchmark All-World Total Return Index rose by 15.7%, following a strong rally towards the end of 2023 and the heavier weighting given by this index to technology stocks. As at 31 December 2023 the company’s net assets were £106.4 million.

Discussing the results and the outlook, director, Dr Sandy Nairn noted;

“Asset markets and equities in particular have proved extremely resilient and determined to focus on positives almost to the point where, although it has not been openly articulated, they depend upon the emergence of some new paradigm of investing. Valuations are close to historic highs, but so are debt levels, and economic storm clouds have gathered. There are some arguments that the asset world has reordered itself such that private valuations are now leading public ones. The argument runs that public listed companies are not that expensive since institutional private equity investors have been willing to pay higher multiples. Of course there is a counter argument that private equity investors are unable to list their holdings in public markets at a premium and are therefore forced to continue to hold or sell to another private holder. I would subscribe to the latter argument.

“The portfolio remains positioned to take advantage of the ‘great unwind’ when it comes whilst both protecting investors and providing some upside at the same time. It is a difficult period since patience is one of the hardest virtues to sustain, particularly when constantly confronted with more upbeat narratives. However, in our view the evidence is still overwhelming that great caution is required. At the stock level we simply are not finding many compelling opportunities. We believe it would be a mistake to be “persuaded” into paying more for stocks than is consistent with attractive longer-term performance. In the meantime, we are conscious that the discount to NAV widened during 2023 and we realise it is incumbent upon us to ensure that we reach the wider audience who we believe will have a genuine interest in the Company as our thesis is reflected in market performance. This is a high priority for 2024.”

Tech underweight weighs on Global Opportunities Trust

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