A look at October’s top risers and fallers reveals another busy month for investment companies.

Best performing investment companies

October’s biggest share price risers (left) and biggest gainers in net asset value (right).

Battery refresh

Corporate actions continued to drive depressed investment company share prices higher last month, alongside further gains in a mix of healthcare, Asia and growth funds.

Gore Street Energy Storage (GSF) shares shot up nearly 25% after the £307m battery fund paved the way for a possible sale of the company still stuck on a 41% discount. First it promised to speed up an overhaul of its board to appease restive shareholders and then made two appointments. These included Norman Crighton, former chair of Harmony Energy Income, who oversaw its sale to Foresight funds earlier this year, raising speculation that GSF could follow suit.

Fidelity Japan (FJV) shares gained nearly 14% as it closed in on a merger with AVI Japan Opportunity (AJOT), which completed last week.

Manchester & London (MNL) advanced over 11% as the global technology fund enjoyed a further spike in Nvidia, the $4.5trn chip manufacturer, and other AI plays. It also pleased shareholders with a 30% hike in the dividend that puts it on a forward yield of 5% and compensates for the current pause in share buybacks.

Interestingly, rival tech funds at Polar Capital (PCT) and Allianz (ATT) also enjoyed double-digit gains in the value of their assets, ranking them in the right-hand column of our first table, but did not make the list of top share price risers on the left. Their shares stand around 10% below net asset value (NAV), compared to the much wider 31% discount on MNL. Shares in all three have retreated this month as concern over AI valuations have resurfaced.

Bellevue Healthcare (BBH) wasn’t far behind MNL as its portfolio started to shine just as the board, tired of its underperformance in the past three years, prepared to appoint Columbia Threadneedle and, if shareholders approve, rename it CT Healthcare Trust.

Biotech funds’ purple patch continued, buoyed by the Federal Reserve cutting US interest rates for the second time in two months, a move that prompted no less than five bids in the sector.

Biotech Growth (BIOG), which held Akero Therapeutics and Avidity Biosciences that received $4.7bn and $12bn offers from Novo Nordisk and Novartis respectively, soared nearly 18%. That was ahead of the 16.4% jump in the trust’s NAV, the biggest portfolio increase in the month that puts BIOG at the top of the right hand column in our first table.

Shares in BIOG’s Orbimed stablemate Worldwide Healthcare (WWH), International Biotechnology (IBT) and RTW Biotech Opportunities (RTW) rallied 9.6%-14.6%.

Two emerging markets trusts made good portfolio gains but did not see that translate fully into the share price. Templeton Emerging Markets (TEM) and JPMorgan Emerging Markets (JMG) both rose over 9% in October. Their shares also stand 9% and 7% below NAV.

Worst performing investment companies

October’s biggest share price fallers (left) and biggest net asset value (NAV) decliners (right).

Shrinking energy

Riverstone Energy (RSE) shrank 21% last month as it rapidly sold assets and returned cash as part of its managed wind-down. Aquila Energy Efficiency (AEET), which paid a £30m special dividend in May as part of its wind-down, retreated 12.5% as it gave up gains from September.

Also in terms of share prices it was a poor month for infrastructure and renewables with funds such as Digital 9 Infrastructure (DGI9), Octopus Renewables (ORIT) and Greencoat UK Wind (UKW) down between 7.4% and 5.6%.

Share issuance and buybacks

Record buybacks

It was a big month for share issuance and buybacks. European Smaller Companies Trust (ESCT) issued £276m of new shares to complete its acquisition of European Assets. That piece of consolidation pushes the trust run by Ollie Beckett at Janus Henderson to the top of its European small-cap group with a £748m market capitalisation.

Scottish Mortgage (SMT) again led the way with share buybacks, repurchasing over £237m shares by our calculation, taking its total buybacks to £1.5bn this year. Its actions have played a large part in total buybacks by investment companies hitting a record £8.6bn, up 35% on last year, according to Winterflood, as average discounts remain stuck at 14%. Despite its efforts, and good half-year results this week, nervousness over tech valuations have seen the £12bn global growth fund slip back to a 13% discount.

Cheaper trusts

Wind-downs

It is striking how four of the five closed-end funds whose shares got significantly cheaper last month, with their discounts increasing, are in wind-down, selling assets and returning capital to shareholders. If disposals go well, that should narrow the gap between the share price and net asset value.

In the case of Aquila Energy Efficiency (AEET), which has a market value of just £23m after returning £30m in May, the widening of the discount to 44% probably reflects the difficulty of liquidating the remaining portfolio which the board described in recent half-year results as “geographically diverse, small in size, contractually complex”.

Similarly Abrdn Property Income (API), valued at just £8m after paying out £15m of sales proceeds to shareholders this month, saw its discount widen to 32% which likely reflects the challenge in selling the Far Ralia forestry plantation it owns in the Cairngorms.

Riverstone Energy (RSE) was only put into wind-down in August but has made rapid progress selling all its listed investments and one unquoted holding to return £190m to shareholders, shrinking it to £51m. The 44% discount to net asset value £11.01 per share may be a sign that offloading its three remaining assets may be slower.

By contrast, NB Distressed Debt (NBDD) is near the end of the road, valued at just £6m by the market after selling its last commercial mortgage for €7.8m at a discount.

That leaves Geiger Counter (GCL), the £55m uranium mining fund run by Keith Watson and Robert Crayfourd at CQS Investment Management, as the only ongoing investment company in our cheap list. The widening of the discount to 21% followed a retreat after a strong September, when NAV jumped 20%, and a further run-up in the share price at the start of last month after the US government announced on 11 October it would prioritise financing for nuclear energy.

More expensive trusts

SREI’s new investor

Three of our top risers lead our list of “more expensive” trusts so let’s skip over them and also British & American (BAF), a £4m global fund with most of its assets in one stock, US drugs company Geron Corporation. This takes us to Schroder Real Estate (SREI), a £264m UK commercial property fund with half of its assets in business parks. Its shares rerated after catching the eye of acquisitive rival LondonMetric Property (LMP), which disclosed a 9.5% stake that has since risen to 11%. It will be fascinating to see if that unfolds into a bid approach.