Investment trust insider on CVC Income & Growth – James Carthew: This high yielder has delivered but beware of the risks
CVC Income & Growth offers an attractive yield of close to 8% and has delivered excellent returns, but there are risks to consider.
In keeping with last week’s theme of covering an investment company I haven’t paid much attention to in the past, this week I thought I would take a look at CVC Income & Growth, which comes in a sterling form (CVCG) and a euro form (CVCE).
CVCE is currently the best performing fund in the AIC’s debt – loans & bonds sector over the past 12 months and five years. CVCG occupies the top slot over three years and 10 years. The difference is down to fluctuations in the euro exchange rate.
The fund has traded at a small premium to NAV since last summer. It has been issuing shares, but it is still on the small side, with a combined market cap of about £264m.
I would like to see the whole sector continue to grow – every fund in the sector is issuing shares now bar NB Distressed Debt (NBDD), which is in wind-up mode and plans to go into liquidation by the end of the year. The market cap of the whole sector is only about £1.5bn, slightly less than Smithson’s (SSON) market cap of £1.7bn, which I talked about a few weeks ago.
I think this is largely down to artificially low interest rates from the global financial crisis in 2008 up to 2022, when… read more here