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Winners and losers in November 2024

The main driver of returns in November came early in the month with Donald Trump’s win in the US presidential elections. US equity markets jumped on the news – several major indices tracking North American stocks, including smaller companies, posted some of their highest returns in months – and while bond yields rose initially, by the end of the month they had fallen back again. The gold price slipped a little, but the oil price was flat. Financials stocks were strong, as investors anticipate regulatory change after the new administration takes office.

Best performing sectors in November 2024 by total price return

This election outcome boosted the returns of several sectors, especially North American, technology and growth capital, and trusts with exposure to stocks backed by Trump supporters such as Tesla and SpaceX.

Worst performing sectors in November 2024 by total price return

In terms of the worst performers, the Property – UK healthcare sector was hit by widening discounts. The other side of Trump’s election win was a hit to sentiment towards the renewable energy sector. Defensive sectors such as utilities and infrastructure lost out to those sectors perceived as the beneficiaries of the Republican clean sweep, hitting infrastructure securities.

European investment trusts, including those investing in small caps, were knocked by concerns over potential incoming trade disputes under a Trump-led US. Moreover, inflation within the eurozone rose considerably over the month, dampening investor confidence. China is another obvious target for Trump’s trade wars but its stock market is already depressed.

Best performing investment companies

Given the backdrop, North American focused funds, particularly those exposed to small caps, feature highly in the list of the best-performing investment companies.

Baillie Gifford US Growth, Edinburgh Worldwide and Schiehallion are three Baillie Gifford managed trusts with significant exposure to Space Exploration Technologies (SpaceX). Rumours about pricing of a sale of insider shares are now discussing a potential valuation of $350bn for the company, well ahead of levels circulating before the election. The Tesla share price has soared too (up 38% in November). Again, Tesla is a large holding in some other Baillie Gifford managed trusts, notably Scottish Mortgage. Elon Musk’s contribution to Trump’s election win, is thought to spell good news for his business interests. There are expectations that tariffs would strengthen Tesla’s position within the electric vehicle market, for example.

AVI Japan Opportunity was boosted by strong share price performance from two holdings – Beenos (which announced good results but continues to reject AVI’s proposals designed to improve shareholder returns) and Kurabo Industries (which we believe has hiked its dividend).

On top of the general bullishness in the US market, Pershing Square Holding’s NAV benefited from soaring share prices for two home loan finance businesses known as Fannie Mae and Freddie Mac, which had to be bailed out during the financial crisis but which, it is hoped, will be released from conservatorship by the Trump government. Pershing Square also announced it would contribute a further $100m to an already $1.4bn share buyback programme that has been running since 2017.

Best performing trusts in total NAV (LHS) and share price (RHS) terms over November 2024

Looking at the share price moves, JPMorgan Emerging Europe, Middle East & Africa’s share price was elevated by hopes that Trump’s anticipated approach to ending the Ukraine war would eventually mean a lifting of sanctions on Russian assets. Seraphim Space may also a have been a beneficiary of SpaceX’s surge, as the trust’s manager Mark Boggett has spoken of the company being a ‘workhorse’ for the space industry.

To the benefit of Geiger Counter, uranium prices have continued their resurgence, building on a spot price uplift of 46% for the year. Baker Steel Resources saw its share price rise following an agreement to sell its shares in Nussir ASA, owner of a Norwegian copper project. For Petershill Partners, an upgrade to Berenberg’s target price for the company came alongside news of a $189m special dividend following the sale of private equity company Accel-KKR. JPMorgan Global Core Real Assets announced that it intended to embark on a managed wind down of its portfolio.

Worst performing investment companies

In contrast to October, gold bullion experienced its biggest monthly loss since September 2023, and this knocked the NAV of Golden Prospect Precious Metals. The timing was unfortunate for the trust as it coincided with the subscription date for its embedded subscription rights, which hit take up of the rights but still depressed the trust’s share price.

As mentioned, the US election result was a double-edged sword for the investment trust sector. Investors in Chinese equities seem to have expected more from the November economic stimulus boosts by Beijing, with the NAV of JPMorgan China Growth and Income likely being impacted by this disappointment, as well as worries over a looming wave of tariffs from the US. Elsewhere in east Asian equities investing, Weiss Korea Opportunity Fund’s NAV slipped during November. That company’s manager expressed its belief that the strategy is less attractive than it has been, and the board responded by announcing that it will initiate a strategic review.

With the new presidential administration’s intention to ‘drill baby drill’ and an antipathy towards renewables, trusts with US renewables exposure such as Premier Miton Global Renewables and SDCL Energy Efficiency Income were negatively affected. It is possible that some renewables projects could be at risk amid a potential roll back or even abolition of the Inflation Reduction Act. A substantial share price drop for HydrogenOne Capital Growth was caused by the write-off of its stake in the German hydrogen energy producer HH2E, as that company failed to secure funding for its first project. Foresight Environmental Infrastructure’s NAV and share price were also affected by HH2E’s administration, HydrogenOne would feature in the NAV table but has not announced a new NAV yet.

UK small cap sold off in November, hitting trusts such as Odyssean and the two micro-cap trusts, but has recovered since.

Worst performing trusts in total NAV (LHS) and share price (RHS) terms over November 2024

VPC Speciality Lending released an update that disclosed problems with one of its remaining investments (Razor). Gore Street Energy Storage is expecting a sizeable cash inflow in relation to investment tax credits related to two US battery storage projects. There may be nerves around whether Trump’s win will derail this. There was no news from Digital 9 on its ongoing wind up, which in itself is disappointing. There is no good reason why Bluefield Solar’s discount widened once again.

Moves in discounts and premiums

More expensive (LHS) and cheaper (RHS) relative to NAV over November 2024

Many of these have been discussed already: hopes of an end to sanctions for the JPMorgan trust, excitement around space for Seraphim, the sale of a copper project for Baker Steel and Accel-KKR for Petershill, and the wind-up of JPMorgan Global Core Real Assets. On the other side there is the Razor write down for VPC Speciality Lending, and the write-off of HH2E for HydrogenOne and Foresight Environmental.

There was no news of import from Gabelli Merger Plus and so nothing obvious that would have led to its discount widening. Similarly, Bluefield Solar is buying back its shares and has reaffirmed its target of paying a dividend of 8.9p for the financial year to end June 2025. The NAV dipped as at end September, but that seems to be about the timing of dividends. It is not clear to us why the discount widened.

Money raised and returned

Money raised (LHS) and returned (RHS) over November 2024 in £m

There are no real surprises in the list of trusts issuing stock, with JPMorgan Global Growth and Income in the top spot as usual. In terms of money leaving the sector, Bellevue Healthcare shrank by over £250m as investors rushed for the exit in its annual redemption facility. An attempt to replace these with continuation votes and a performance driven tenders has reportedly been rejected by shareholders. The trust may not survive next year’s exit opportunity. Scottish Mortgage continues to shrink but the pace has slowed, which might reflect this month’s good news on the NAV. Finsbury Growth and Income has resorted to offering investors a continuation vote in 2026, but this has not yet stemmed the tide of share buybacks. GCP Asset Backed Income made the initial cash distribution under its managed wind down. Smithson continues to buy back shares.

During the month, we said goodbye to Boussard & Gavaudan Holding and Balanced Commercial Property. Aurora’s merger with Artemis Alpha went through at the end of the month, the combined trust is now known as Aurora UK Alpha.

Major news stories and QuotedData views over November 2024

Property news

QuotedData views

Visit www.quoteddata.com for more on these and other stories plus in-depth analysis on some funds, the tools to compare similar funds and basic information, key documents and regulatory news announcements on every investment company quoted in London.

Interviews

Have you been listening to our weekly news round-up shows? Every Friday at 11 am, we run through the more interesting bits of the week’s news, and we usually have a special guest or two answering questions about a particular investment company.

Research

On 26 November, Caledonia Investments (CLDN) released interim results covering the six-month period ended 30 September 2024. We provide some analysis of these in this note. There was a notable narrowing of the discount over the period. However, the market turmoil that accompanied the UK budget and the US election has since reversed this, leaving CLDN trading on an excessively wide discount of 37.9%.
The board believes that CLDN’s share price undervalues the quality of its portfolio and long-term track record. The board and management are keen to do what they can to tackle the discount (see page 3) and say that NAV-accretive share buybacks play an important part in this. The company is therefore asking shareholders to approve measures to facilitate their continued use (see page 5).

AVI Global (AGT) continues to demonstrate the value of a clear strategy and a high-conviction approach, generating annualised Net Asset Value (NAV) returns of almost 15% over the last two years, despite market factors heavily favouring momentum trading (strategies where investors buy rising securities and then sell them when they appear to have peaked) and a small group of very large US technology companies.
At the same time, broader market volatility has driven some discounts to extreme levels, creating a range of excellent opportunities for the managers, who continue to focus the portfolio around idiosyncratic catalysts (specific events likely to impact stock prices) and away from generic market risk.

The interest rate cuts that we had been hoping for have materialised, to the benefit of growth-focused strategies such as that of Impax Environmental Markets (IEM). However, the route to a more sustainable world has been made harder by the election of a new US President who seems set on rolling back measures to tackle climate change and combat biodiversity loss. Encouragingly, IEM’s net asset value (NAV) has not been much affected by this, and it may be worth remembering that IEM’s portfolio is a global one, and over the period between Trump’s election in 2016 and his ousting in 2020, IEM’s share price rose by 84%. This reflects the breadth of IEM’s universe. Renewables for example, account for just 7% of its portfolio.

Foresight Environmental Infrastructure’s (FGEN’s – formerly JLEN Environmental Assets) recent results were a two-part affair, with its operational assets pumping out record cash receipts, but the NAV taking a hit as green hydrogen developer HH2E entered administration (a form of bankruptcy where a third party manages the company to pay creditors).
The failure of HH2E, which could not attract the required investment to bring forward its projects, exposes the risk of investing at an early stage of development in a nascent sector. However, the highly diversified nature of FGEN’s portfolio meant that the impact on NAV was just 2.6%.
The stability provided by FGEN’s successful operational portfolio, which makes up 92% of assets, enables it to take measured exposure (calculated risk) to potential gains from construction-stage assets (see our profile on page 10). This gives the manager confidence that FGEN will bounce back strongly in time.

Polar Capital Global Healthcare (PCGH) continues to make progress, delivering impressive outperformance of its benchmark the MSCI All Countries World Healthcare Index, as the table on page 3 shows, and benefitting from a narrowing of its discount as more investors embrace the story. PCGH’s managers believe that the healthcare sector’s fundamentals (factors believed to contribute to the core value or overall worth of a business) are good enough to underpin the growth story for the foreseeable future.
Since we last published, the managers have substantially reshaped the portfolio to take advantage of the themes that continue to drive its long-term growth. These include innovative new therapies, higher patient numbers, and the continued ageing of the global population, which is associated with an increase in chronic disease.

Over the past year, as its portfolio continues to mature, Pantheon Infrastructure (PINT) has risen towards the top-end of peer group performance tables as Figure 11 on page 12 shows. Over the first six months of 2024, PINT reported a NAV return of 8.5%, running well ahead of its target of 8%–10% per annum.
In PINT’s recent results, the stand-out winner within the portfolio was the US power generation business Calpine. This note delves into the Calpine story in more detail and sets out why we feel it could still have much further to go.
The discount has started to narrow, suggesting that investors are finally waking up to PINT’s potential, but it remains much wider than those of worse-performing peers.

Seraphim Space Investment Trust (SSIT) continues to see its portfolio of cutting-edge space-focused companies (‘SpaceTech’) achieve key milestones. Over SSIT’s financial year, its companies raised $900m in new investments, with SSIT contributing £11m across 10 investments. Notable examples are the oversubscribed initial public offering (IPO) of Astroscale, the successful capital raise of D-Orbit, and the soaring share price of AST SpaceMobile. This has resulted in positive net asset value (NAV) growth for SSIT during the period.

SSIT’s portfolio companies, which specialise in revolutionary surveillance satellites, telecommunications, and space logistics, have also made significant progress towards profitability, with several expected to reach this milestone in 2025. SSIT’s management hopes that the overall portfolio will achieve profitability by that time as well.
Despite these successes, SSIT’s shares continue to trade at a significant discount to its NAV, currently about 52%, which should be seen in the context of the broader selloff in growth stocks and investment trusts.

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Appendix 1 – median performance by sector, ranked by 2024 year to date price total return

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