Investment Trust Insider on Perpetual Income and Growth

James Carthew: contrarian in me won’t sell Barnett’s trusts

I am sure that most of us have things in our portfolios that we wish we had sold some time ago but, after a period of disappointment, we hang onto in the hope that they will come right. One faded star in my pension pot is Perpetual Income & Growth (PLI).

I have compounded that problem with a holding in Edinburgh (EDIN) investment trust reasoning it was essentially the same trust but at the time traded on a wider discount. The reverse is true today with Perpetual Income trailing 11% and Edinburgh 8% below net asset value.

I bought Perpetual Income in June 2012. For three years it was a great investment, returning over 60%. Since the summer of 2015, however, the shares have fallen by about 23%. Edinburgh, which I bought in October 2013, peaked in June 2017 and has fallen by about 19% since.

The main issue that these trusts have had to deal with over the last couple of years has, of course, been Brexit. However, there have been some other self-inflicted problems too. The question now should be, top-up or ship-out?

Mark Barnett manages both trusts and also ran Keystone (KIT) until April last year when James Goldstone, his deputy on Edinburgh took over. Barnett’s Citywire rating for his Invesco Perpetual Income funds has slumped from AAA to unrated in recent years and he ranks 84th out of 85 open-ended UK equity income managers over three years (though ahead of former colleague, Neil Woodford).

In the AIC’s UK Equity Income sector, Perpetual Income and Edinburgh rank 22nd and 20th respectively out of 24 trusts over three years for growth in net asset value. Keystone, Woodford Patient Capital (WPCT) and Sanditon (SIT) bring up the rear of the AIC’s UK All Companies sector on the same basis.

I have long argued that it makes no sense for Perpetual Income and Edinburgh to be separate trusts and…  read more here