Investment trust insider on new and newish funds – James Carthew: Let’s hope new trusts are more open than recent launches
After a long hiatus, the flotation window appears to be opening up. I thought this week I would have a look to see how the last crop of investment company launches – Nippon Active Value (NAVF), Octopus Renewable Infrastructure (ORIT), RTW Venture (RTW) and JPMorgan Global Core Real Assets (JARA) – have been doing.
NAVF is only just over six months old, but it has had a baptism of fire. Fortunately, the managers got off to a reasonable start, having invested some of the £103m launch proceeds when other investors were panicky. By the end of June, 65% of the cash had been deployed and the managers said they expected to be 100% invested by now.
Unfortunately, its new portfolio has been underperforming its peers – NAVF is about 6% behind AVI Japan Opportunity (AJOT) over six months. Unlike AJOT, NAVF is not telling us which stocks it is buying – even in its interim accounts.
NAVF has moved to trade on a 4% discount but most investors will most likely keep the faith with NAVF for now. It is a bit too soon to sit in judgement, but the lack of information doesn’t help its cause in my view.
The renewable energy sector is still an investor favourite, despite some fairly chunky falls in net asset values (NAVs) as long-term power price forecasts are reduced. ORIT sits on an 11.4% premium to its NAV. Last December it raised far more than its initial target attracting £350m versus £250m and has been busy deploying this.
Acquisitions to date include onshore wind in Sweden and solar plants in the UK and France with 75% of funds invested. It says the power price falls are being factored into the prices that it is paying for these assets. It also helps that the solar plants benefit from subsidies. The dividend target of 3% in the first year of operations seems to be on track. This trust seems set fair.
I wrote about RTW in July. There has been… read more here