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Investment trust insider on Independent Investment Trust

Investment Trust Insider on Perpetual Income and Growth

Investment trust insider on Independent Investment Trust – James Carthew: Former UK star Independent can’t be beat for skin in the game

This week, I am returning to Independent Investment Trust (IIT), which I last wrote about in December 2017. Back then it was a favourite trust for small investors.

Success with investments in the likes of Fever-Tree (FEVR) had driven it towards the top of the performance tables. The board’s reluctance to issue shares helped fuel a squeeze in the availability of stock and the trust moved to trade on a significant premium to net asset value (NAV), hitting over 20% in the summer of 2018.

However, the run of performance didn’t last. By mid-2018, markets started to worry that global growth might falter. A policy of running winners (Fever-Tree is still a big position in the fund, for example) had concentrated a large proportion of the portfolio in a handful of names.

When a few stock-specific problems hit, the NAV fell and the flow of stock quickly went the other way. This drove the shares to a discount and made IIT’s share price returns look poor, which compounded the problem. Between June 2018 and August 2019, the share price fell by about 40% and the shares ended up trading on about a 10% discount.

Commendably, the board decided to resume buying back its shares and has repurchased almost 2.5m since the end of 2017. However, it appears as though IIT’s discount has become entrenched.

The £305m trust, which is the UK All Companies sector, is unusual in a few ways. First…   read more here


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