Fund info

More information is available on the trust’s website globalopportunitiestrust.com

GOT is a self-managed investment trust. It aims to provide shareholders with an attractive real long-term total return by investing in globally in undervalued asset classes, without reference to the composition of any stock market index.

History

GOT was listed in 2003 as EP Global Opportunities Trust, with Edinburgh Partners as its investment manager. Dr Sandy Nairn (see page 19) was one of its two principal investment managers. Sandy had founded Edinburgh Partners in 2003, in the wake of the bursting of the technology bubble. Edinburgh Partners was sold in 2018 to Franklin Templeton and Sandy became chairman of Templeton Global Equity Group, while remaining investment partner and CEO of Edinburgh Partners, and manager of EP Global Opportunities.

In December 2021, the trust adopted its current investment objective and policy, and, in 2022, Sandy left Franklin Templeton to become an employee of the trust, its investment director and the trust’s named manager. Goodhart Partners LLP (Goodhart) became a subadvisor at that time.

Goodhart was launched in 2009, initially as a multi-manager and then as a boutique Japanese equities business. Sandy was an investor from its launch, remains a minority shareholder in the business, and is a non-executive director. Goodhart is responsible for trading within GOT’s portfolio and has an advisory agreement over the private investments.

Goodhart Partners LLP today

Goodhart was named for ‘Goodhart’s law’, which states that: when a measure becomes a target, it ceases to be a good measure.

No slavish adherence to beating index benchmarks

At its core is a rejection of any investment approach with a slavish adherence to beating index benchmarks, a perceived failure of the vast bulk of the asset management industry. In the Goodhart team’s opinion, the big asset managers have become overly focused on asset-gathering while losing track of the need to understand how to manage money. In addition, asset manager consolidation often means that smaller, less liquid opportunities are ignored, regardless of how compelling they are.

More information on Goodhart is available on its website: goodhartpartners.com

Today, Goodhart is a London-based, 18-person (nine of whom make up the investment team) investment partnership. The plan is to grow the firm over time by recruiting managers and teams that embrace its ethos, although this is expected to be a very deliberate process that focuses on specific niches.

The team works collaboratively, and Sandy – in his role as investment director – signs off on decisions. Goodhart says that GOT’s board takes its responsibilities seriously and holds the team to account.

All members of the investment team run money. Goodhart believes that this structure is better suited to idea generation than a firm employing analysts organised in silos. The firm acknowledges that ideas can take time to come to fruition. That means that it is important to have a culture of supporting managers through periods of short-term underperformance, which is not always prevalent in most asset management firms.

Currently, Goodhart supports four other specialist investment businesses – Asset Value Investors (which will be well-known to readers of our research as the manager of AVI Global Trust and AVI Japan Opportunity Trust), Granmiznar (a Tokyo-based Japanese equity advisory boutique), Volunteer Park Capital (an investor in general partners of private capital funds with AUM of $500m–$3bn), and a pan-European micro-cap franchise.

Why GOT?

For investors focused on long term absolute returns

GOT is a trust designed for investors focused on long-term absolute returns and not for those likely to be fixated on short-term market moves. At its core, the portfolio is driven by value opportunities, but this is not a dyed-in-the-wool value investment strategy. Goodhart is willing to invest anywhere, in any industry, and at all stages of a company’s life cycle – growth, emerging quality, quality, classic value, discounted assets, and special situations – and elements of all of these may be reflected in stock selection. Flexibility is key.

Prior to 2021, the trust had followed a conventional – albeit non-benchmarked – global equities approach. However, in the wake of COVID, the end of the era of abnormally low interest rates, the excesses that this encouraged, and influenced by Sandy’s well-documented belief in the “End of the everything bubble”, the trust adopted a flexible multi-asset approach. However, the managers stress that, despite fears of stretched valuations in many markets, they are not perma-bears.

The Goodhart team stresses the importance of learning lessons from the past and trying not to repeat mistakes. GOT’s closed-end structure is a strength as it allows the team to look through the noise and invest at times when others are panicking.

GOT’s view of a changing world

In recent decades, markets shrugged off setbacks – even significant ones such as the global financial crisis and COVID – and continued to climb. The team believes that this unusual situation is coming to an end, and that the tailwinds that have supported this are fading and reversing. In this situation, it will be necessary to be more flexible and focused; asset managers can no longer be reliant on a rising tide lifting all boats.

Goodhart identifies four forces – classified under demographics, security, the environment, and technology – that drove global economic growth over the 30-year period between 1990 and 2020.

• Demographics – a growing pool of labour as companies looked outside the developed world and tapped into industrialising emerging markets. This kept wages lower than they would otherwise have been. The middle class in these emerging countries expanded and this helped contribute to rising global consumption.

• Security – globalisation led to a more interconnected world, economies benefitted from a post-Cold War peace dividend – allowing defence budgets to be reallocated to supporting other parts of the economy – supply chains lengthened, and just-in-time models proliferated, while intellectual capital was exported round the world.

• The environment – whilst concerns about climate change and pollution were being raised, for the most part, little capital was expended in addressing the problems and regulation was weak or non-existent. Commodity cycles persisted, but natural resources seemed abundant.

• Technology – the transition from an analogue to a digital world, the rise of the internet and rapid advances in personal computing and mobile technologies gave rise to new business models and was largely disinflationary.

Over those decades, corporate tax rates fell, as did interest rates and inflation. That fed through into seemingly ever-rising equity markets. Passive investment strategies thrived in this environment, as did private capital markets.

The 30-year period that began in 2020 will look very different

Goodhart feels that, based on hard data rather than prognosticating about the future, the 30-year period that began in 2020 will look very different, and this is largely down to shift in those four forces.

• Demographics – falling birth rates mean that population declines can be observed in large parts of the world. Workforces are shrinking and that implies problems for economies reliant on income taxes, while the overall population is ageing, which is putting additional pressure on healthcare systems. The countries that still have fast-growing populations are often amongst the poorest and this creates geo-political tensions.

• Security – globalisation is reversing, lengthy supply chains are vulnerable both to conflict – as the attacks on shipping in the Red Sea showed – and to other risks such as COVID. The trend is now towards re-shoring and friend-shoring. The Russia/Ukraine war, persistent problems in the Middle East, sabre-rattling by China, and an increasingly inward-looking US have exposed a need to ramp up defence spending. Cybersecurity is an increasingly hot topic, and intellectual capital is now subject to growing protectionism. This makes markets less efficient, which leads to lower productivity, and this translates into lower global growth.

• The environment – recognition of the threat of climate change led to the widespread adoption of net zero commitments. The current backlash against these may not persist in the face of worsening climate disasters. There is a growing acknowledgement that key resources are scarce and a visible scramble to secure new supplies is underway. Disputes over water rights are growing.

• Technology – the digital world is all-pervasive. The advent of AI has profound and long-lasting implications. Eventually, it will lead to job losses, often in previously well-remunerated industries, which could lead to lower social cohesion.

Goodhart feels that it will often be the poorest countries that will be the hardest hit in this scenario. Worsening climate change also tends to disproportionately affect these same countries. This is both a threat to the social contract and heightens geopolitical risk.

Goodhart also observes that overly indebted national balance sheets mean that hard choices are necessary. Inflation and interest rates are already rising, tax rates may soon follow. It suggests that the rising tide that has lifted all boats may soon go out and the ability of policy makers to respond to shocks is diminished. Indices may struggle to make headway, and active management will be key. In such a scenario, it believes that portfolios need to be flexible and focused.

In recent years, the main driver of returns has narrowed to a group of mainly US and AI-related stocks. That has left some parts of markets looking more attractive – Goodhart does not believe that we are still in the ‘End of everything bubble’.

Investment approach

GOT’s approach to building a portfolio

A single concentrated portfolio that expresses six-to-10 themes

Some trusts with similar objectives will try to construct a multi-asset portfolio comprising investments with low correlation. This is not the route that GOT follows. Instead, the aim is to build a single concentrated portfolio that expresses six-to-10 themes that the investment selection process has identified which offer the desired level of market risk.

The trust can invest in a range of asset classes across both public and private markets, but predominantly seeks returns from public equities. Typically, the trust’s equity exposure will move within a range of 40%–80% of net assets, but if circumstances warrant it, the exposure could be meaningfully outside of that range.

The level of market exposure is set with regard to the availability of potential investments from a bottom-up perspective and how supportive the top-down picture is.

The team takes a three-to-five-year view when deciding on the appropriate level of portfolio exposures.

For each investment, the team will set a target return and will monitor progress relative to this. The aim is to build a portfolio that encompasses a variety of ideas rather than being overly exposed to a particular theme.

The team may use hedging as a way of managing the portfolio’s gross exposure.

Seeking out underappreciated change

Markets are not perfect and Goodhart’s process seeks to exploit mis-valuations as a consequence of underappreciated change. This might reflect changes within a company – such as restructuring, capital investment, or cost cutting – or it could be the result of external factors.

Goodhart has built a proprietary research database, based on a common template for all stocks, which seeks to quantify the upside and the downside – looking at a range of scenarios – and focus attention on what matters to the company’s success.

Looking at the bottom-up, the team wants to have high conviction in a diverse set of potential investments with attractive forecast upsides. The team is prepared to pay a premium for quality – strong balance sheets offer some downside protection, for example – but it is important to remember that the past is not a predictor and getting this wrong can be painful.

From a top-down perspective, the team looks at market valuations, where we sit in the economic cycle, and the risk of adverse events. The objective here is not to time markets, but rather to inform the assessment of an investment’s risk/reward profile.

GOT’s portfolio is agile – the trust’s market exposure will vary with the availability of opportunities

If there are not enough compelling ideas, then the trust will hunker down, raising cash balances, for example. Or, to put it another way, when ideas are scarce the focus is on risk, and when ideas are abundant the focus is on returns – Goodhart describes this as “agile investing”.

If a team identifies an interesting potential investment, but feels that it does not have the in-house capability to assess it, it can allocate resources to tap into external expertise. However, the majority, if not all of the underlying investments will be selected by the team.

Positions will be reassessed if they re-rate towards target prices, and sold if something changes that derails the investment thesis.

Investment restrictions

The following investment restrictions apply, percentage of the portfolio calculated at the time of the initial investment:

• Maximum of 15% in any single investment.

• Maximum of 15% in any other closed-end investment company.

• No more than 30% in private markets.

• No more than 50% in bonds, debt instruments, cash, or cash equivalents.

The company can borrow for investment purposes up to the equivalent of 25% of total assets.

Asset allocation

GOT’s financials exposure has been trimmed over the past 12 months as the team has booked profits from some positions. To some extent, the proceeds have been used to add to GOT’s industrials exposure, but the proportion in cash and other has risen too.

On a geographic basis, the main change over the past year has been a reduction in Europe ex UK exposure in favour of cash and other.

Goodhart’s internal analysis suggests that the portfolio’s key exposures are to Japan, Europe, industrials, consumer staples (but with low consumer exposure overall), quality, classic value, growth cyclical, defensives, and – relative to most global managers – an underweight exposure to the US.

Six themes

Individual stock ideas tend to coalesce into clear themes. At present, there are six of these which are illustrated in Figure 3 below.

Figure 3: Thematic split of GOT’s portfolio as at 28 February 2025

Source: Goodhart Partners LLP

Currently, the portfolio is expressing:

• The need for predictable income from investments with relatively low market and economic risk.

(Lloyds Banking, Sanofi, Eni, TotalEnergies, cash/money market funds)

• Resilient and durable businesses that can provide significant outperformance of adverse markets.

(Orange, Nestle, Unilever, Philips, Verizon, Imperial Brands, Terveystalo, Volunteer Park Capital Fund)

• The ongoing reforms to Japanese corporate governance that are unlocking value and driving a change in business culture.

(AVI Japanese Special Situations Fund)

• The need to rebuild national defence capabilities and increased defence spending in Europe.

(QinetiQ, Dassault Aviation, General Dynamics, RTX)

• Companies that will benefit from digitalisation.

(Intel, Alibaba)

• European value, as investors have become overly-negative on the region and reforms are leading to a better corporate outlook.

(Azelis, Bakkafrost, Breedon, Jet2, Danieli, Kalmar)

Top 10 holdings

Figure 4: GOT 10 largest holdings as at 31 May 2025

AVI Japanese Special Situations Fund

AVI Japanese Special Situations Fund was launched in April 2024 as an open-ended version of the AVI Japan Opportunity Trust. GOT took profits from its large-cap Japanese equity positions to fund an investment in the fund. It aims to achieve long-term capital appreciation through investing in a portfolio of over-capitalised small-cap Japanese equities. The fund’s manager engages with company management to help to unlock value in this under-researched area of the market.

The open-ended fund has a few more positions than the trust, but the largest positions are the same, with some variation in position sizes.

The Japanese equity market was hit by tariff-related volatility, but the fund has had a run of success from its engagement activities which has boosted returns.

Figure 5: AVI Japanese Special Situations (GBp)

Source: Morningstar

Volunteer Park Capital Fund

Volunteer Park Capital Fund invests in the general partners of private capital funds, targeting GPs with AUM of $500m to $3bn. It has invested $40m across five GPs – CapitalSpring (capitalspring.com), Wave Equity Partners (waveep.com), New Science Ventures (newscienceventures.com), Syntaxis Capital (syntaxis-capital.com), and Albright Capital (albrightcapital.com). The first three took the form of debt; the latter two were in equity stakes in those businesses.

Performance

Figure 6: GOT share price and NAV performance over five years ended 31 May 2025

Source: Morningstar, Marten & Co

Figure 6 shows the relatively steady appreciation in GOT’s NAV and the disconnect between the NAV and the share price that we explore on page 15.

Figure 7: GOT cumulative total returns over time periods ended 31 May 2025

Looking at the three-month and six-month numbers, Figure 7 provides some evidence of GOT’s ability to be hold up relatively well in weak markets, as well as the trust’s long-term outperformance of government bonds.

Goodhart kindly supplied us with some data that suggests that, over the three-year period ended 31 March 2025, GOT actually rose during falling markets, while delivering positive returns in rising markets.

Figure 8: GOT returns in rising and falling markets

Source: Goodhart Partners LLP. Data shown is the average monthly returns in months when MSCI World either rises or falls. 60/40 multi asset is the returns of the Vanguard LifeStrategy 60% Equity Fund, Long/short index is the returns of HFRI EH Long/Short Directional Index.

Figure 9 shows the returns achieved over that period.

Figure 9: Returns over three years ended 31 March 2025

Peer group

Up-to-date data on the peer group is available on our website

GOT sits within the AIC’s flexible investment sector which encompasses a diverse set of investment companies with a variety of investment objectives and strategies, united only by their ability to invest in more than one asset class.

Although GOT’s approach is unique, and comes with a bit more equity exposure than some of these trusts, the closest comparators within this peer group are probably Capital Gearing Trust, Majedie, Personal Assets, and Ruffer. We have excluded Majedie from Figure11 for the moment, as it has only recently adopted its investment approach. Figure 11 compares their track records and GOT comes out on top over most time periods.

Figure 10: Flexible investment sector as at 23 June 2025

Of these, abrdn Diversified Income & Growth, JPMorgan Global Core Real Assets, and UIL are in managed wind-down.

Figure 11: GOT and selected peers, cumulative total returns over time periods ended 31 May 2025

GOT’s NAV returns have a closer, albeit still relatively low, correlation to those of the MSCI ACWI than this peer group. As Figure 12 shows, these trusts’ returns are much less volatile than the index.

Figure 12: Peer group correlation with MSCI ACWI and volatility figures to end May 2025

Dividend

GOT pays a single annual dividend in May each year.

The company has not adopted a formal dividend policy. The doubling of the dividend for the 2024 financial year was achieved by dipping into revenue reserves.

Figure 13: Dividends and revenue per share for financial years ended 31 December

Source: Global Opportunities Trust, Marten & Co

At 31 December 2024, the revenue reserve stood at £4.8m or 16.4p per share. In total, distributable reserves totalled at £100.2m.

Premium/(discount)

Over the 12 months ended 31 May 2025, GOT’s discount moved within a range of 26.5% to 15.9% and averaged 22.3%. As at 23 June 2025, GOT’s shares were trading on a discount of 18.8%.

Whilst there is some evidence that the discount has been narrowing in recent weeks, it is still irrationally wide. With 35.4% of the portfolio in cash and money market funds at the end of May, the implied discount on the balance of the trust’s portfolio is 29.1%.

The board is keen to narrow the discount and grow the company. To that end, a new broker was appointed in February 2025 and the marketing of the trust has been stepped up a gear.

As we showed in the peer group section, similar trusts are trading on much tighter discounts. It seems clear to us that GOT’s shares are significantly undervalued.

Figure 14: GOT premium/(discount) over five years ended 31 May 2025

Source: Morningstar, Marten & Co

At the AGM held on 15 May 2025, shareholders granted the board powers to issue approximately one third of the issued share capital (excluding shares held in treasury at that date). Shares will only be issued or reissued at a premium to the prevailing NAV. Powers were also granted to allow the repurchase of up to 14.99% of shares in issue. Shares repurchased may be held in treasury.

In practice, no shares have been repurchased since a tender offer completed in February 2022 that resulted in 7,305,545 shares being repurchased into treasury. Given GOT’s size, there is a danger that share buy backs could reduce liquidity and exacerbate the discount. It makes sense to us to raise the profile of the trust and the investment approach in the first instance.

Structure

Key dates

GOT’s financial year ends on 31 December. Typically, annual results are announced in April and the AGM is held in May. Interim results are usually announced in August.

Fees and charges

Dr Sandy Nairn receives a salary of £75,000 per annum for his role as executive director, in addition to a £25,000 annual fee for acting as a director.

Goodhart’s fee is 0.12% per annum of the market value of equity securities, and 0.12% of the value of cash and other current assets. As an investment in private markets, the investment in Volunteer Park Capital is not included in the value of equity securities.

The ongoing charges ratio was 0.83% at 31 December 2024, down from 0.88% a year earlier. Those figures include look-through expenses of funds held by the trust. Were these to be excluded, the ongoing charges ratio would be 0.68%, down from 0.71%.

Capital structure

GOT has 64,509,642 ordinary shares in issue, 35,287,462 of which are held in treasury. The total number of voting rights in the company is 29,222,180. Dr Sandy Nairn and his wife are significant shareholders in the trust as Figure 15 shows.

Figure 15: Major shareholders as at 31 December 2024

Source: Global Opportunities Trust

Board

GOT has four directors, three of whom are non-executive. Dr Sandy Nairn is an executive director. Cahal Dowds and Hazel Cameron are connected through Continuum Advisory Partners, a business that Cahal founded and chairs, and of which Hazel is a non-executive director. That relationship and its effect on their independence has been reviewed by Katie Fowler-Davies and nothing untoward noted.

Figure 16: Board member – length of service and shareholdings

Cahal Dowds

Cahal qualified as a chartered accountant with Touche Ross and cofounded Rutherford Manson Dowds in 1986, advising on a significant number of large, complex transactions in the UK and internationally.

Rutherford Manson Dowds was acquired by Deloitte in 1999. Cahal led Deloitte’s UK advisory corporate finance business from 2005 before becoming chairman. He also set up and created the UK strategy and vision for Deloitte Private Markets.

In 2014 he was also appointed vice chairman of Deloitte UK, until his retirement in 2018. He is a past President of the Institute of Chartered Accountants of Scotland and is currently a non-executive director and chairman of MarktoMarket Valuations Limited, chairman of Continuum Advisory Partners Limited and a member of Gresham House Strategy Equity Advisory Group.

Hazel Cameron

Hazel qualified as a chartered accountant with Arthur Andersen, before moving into corporate finance with British Linen Bank and then into private equity investing, initially with 3i in 1993. She was subsequently UK head of San Francisco-based technology investment fund Bowman Capital, before performing the same role for Cross Atlantic Capital Partners, a US technology venture capital company. Hazel is currently network director at Growth Capital Partners LLP, an independent adviser and venture partner at AIM-listed Gresham House and a non-executive director of Continuum Advisory Partners Limited.

Katie Fowler-Davies

Katie qualified as a chartered accountant with Touche Ross, gaining experience in both audit and forensic services before a 20-year career in corporate finance advisory. She has international experience across financial and business services, having operated in the private sector and for government. She became a member of the corporate finance advisory executive, with responsibilities including chief talent officer and retired as a Deloitte senior partner in 2020, taking up the role of investment partner at Twenty 20 Capital, an internationally-focused private capital investment fund.

Katie has held a number of board positions as well as representing Deloitte as a CBI Council Member and chairing the City Women’s club in London and is currently chair of the annual international TALiNT industry awards recognising excellence across the recruitment industry.

Dr Sandy Nairn

Sandy graduated from the University of Strathclyde in 1982 and in 1985 he achieved a PhD in Economics from the University of Strathclyde/Scottish Business School. He was an economist at the Scottish Development Agency for a year, before spending four years at Murray Johnstone as a portfolio manager and research analyst.

Between 1990 and 2000 he was employed by Templeton Investment Management where he became executive vice-president and the director of Global Equity Research. He was chief investment officer of Scottish Widows Investment Partnership between 2000 and 2003. He was one of the founders, chief executive, and chief investment officer of Edinburgh Partners, which was established in 2003.

Following the acquisition of Edinburgh Partners by Franklin Resources Inc. in 2018, he was appointed chairman of the Templeton Global Equity Group. Sandy has also been the lead portfolio manager for the company since its launch in 2003.

Sandy is the author of ‘The End of the Everything Bubble’, in which he analyses at length the reasons for the unsustainable rise in valuations that led to the bear market in bonds and equities in 2022.

SWOT/Bull-bear

Figure 17:  SWOT analysis for GOT

Figure 18: Bull vs bear case for GOT

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