Investment trust insider on battery funds – James Carthew: Blame imbalanced National Grid for battery funds’ woes
In recent weeks, the share prices of the three battery storage funds have nosedived, more than reversing the modest gains they had made since it started to become clear that interest rates had peaked last October.
Gresham House Energy Storage (GRID) has now experienced a 55% fall in its share price year-to-date. It trades on a 66% discount to its June 2023 net asset value (NAV – the last available – but there must be a good chance that the next valuation – as at 31 December 2023 – will come in lower than this.
Similarly, Harmony Energy Income Trust (HEIT) is down 56% year to date and trades on a near 70% discount.
The share prices of these battery funds have been sliding for a while, but the trigger for the recent share price weakness was a note published by Matthew Hose of Jefferies on 25 January 2023, which called into question the sustainability of the dividends on the three battery storage funds. They simply have not been generating enough income and things seem to be getting worse. Now, both GRID and HEIT have suspended dividend payments.
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