Investment Companies Monthly Roundup

Kindly sponsored by Baillie Gifford and abrdn


The Russo-Ukrainian conflict, which began at the end of February, worsened over March which, unsurprisingly, caused further volatility in global markets and a significant impact on energy, metals, and wheat prices. That has been good news for commodity exporting regions such as Latin America, which was the best performing sector for the month. Infrastructure securities did well thanks to a good month from Ecofin Global Utilities & Infrastructure, which makes up 50% of the sector. The royalties sector also got a boost from member Hipgnosis Songs. North American trusts did well in March as investors took advantage of steep discounts to pick up bargains. China/Greater China was the worst performing sector over the month as coronavirus cases remain high in parts of the country and restrictions are still well in place. Meanwhile, President Xi Jinping set China’s growth target for 2022 at 5.5% – the lowest in three decades. Asia Pacific funds were also hit, likely impacted by its proximity to Russia as well as some of the region’s countries’ reliance on its exports. Growth capital trusts are still reeling from the rotation out of growth stocks earlier this year, especially with higher inflation and increasing interest rates likely to continue (see Appendix 1 for a breakdown of how all the sectors have performed this year).

March’s median total share price return was 1.9% (the average was 2.3%) which compares with a median of -2.8% in February. Readers interested in recent briefings from the industry can click here to access our economic and political roundup.

Best performing sectors over March

Worst performing sectors over March

On the positive side

BlackRock Energy & Resources Income) dotted among the top ten. Higher commodities prices are also good news for Latin American funds abrdn Latin American Income and BlackRock Latin American, the latter of which made gains in both NAV and share price terms. Pershing Square Holdings enjoyed some uplift as, once again, it benefited from derivative trades designed to cushion against market falls, while its North American peer Middlefield Canadian Income was the best performer during the month in share price terms, helped by Canada’s resource-rich economy. New renewable energy infrastructure kid on the block, ThomasLloyd Energy Impact also made the top ten after receiving formal approval by the government of India for the purchase of a 43% economic interest in SolarArise India Projects Private Limited.

On the negative side

On the negative side, JPMorgan Russian Securities and Barings Emerging EMEA Opportunities continued to suffer in the face of the current conflict while all four members of the China/Greater China sector (JPMorgan China Growth & Income, abrdn China, Baillie Gifford China Growth and Fidelity China Special Situations) saw their NAVs fall over March for reasons already discussed. SLF Realisation fell after making a distribution to shareholders. UK names Aurora, Artemis Alpha Trust and BlackRock Throgmorton also fell in NAV terms. In share price terms, growth capital members Schroder UK Public Private and Schiehallion were down as the sector continues to be out of favour in the uncertain and higher interest rate environment. At the end of the month, RTW Venture reported lacklustre results for 2021, in a very weak market for biotech stocks; its NAV fell by 13% and share price by 5%.

Discounts and premiums

More expensive and cheaper relative to NAV

The premium for JPMorgan Russian Securities soared to a ridiculous 228% by the end of March as, rather distastefully, some investors try to profit from the war in Ukraine, by betting that sanctions will be lifted. The war crimes in Bucha probably make that a distant prospect. Barings Emerging EMEA Opportunities is valuing its Russian investments at zero. However, the Gulf region – which also falls into its remit – is a beneficiary of a much higher oil price. After seeing its discount widen faster than any other trust in February, ThomasLloyd Energy Impact’s premium is starting to look excessive, it hasn’t finished investing its IPO proceeds yet, but when it has, it will likely be issuing more shares. Oryx International Growth bounced in March, though it remains on a single-digit discount.

RTW Venture became cheaper during the month, likely a result of its miserable annual results following a tough year for the biotech space. Schiehallion’s premium also appears to be coming back down to reality (it was trading on a 59.3% premium by the end of 2021) though it remains in double-digits. SLF Realisation Fund saw its discount widen to 60% following a return of capital. The trust is in wind-up mode as it sells its assets. Investors may be thinking that the next capital return is some way off.

Money in and out

Money coming in and going out

Just over £350m of net new money was raised in March, led by a £277m fundraise from The Renewables Infrastructure Trust. The trust issued shares to professional investors via a bookbuild – where investors bid to buy shares through the company’s brokers at a strike price of no less than 130p. The proceeds were raised to acquire a 7.8% equity interest in the Hornsea One offshore wind farm in the UK from Global Infrastructure Partners. SDCL Energy Efficiency raised £100m in an oversubscribed placing to fund new investment opportunities identified in its wider pipeline worth over £250m. Ruffer, Capital Gearing and Personal Assets also issued new shares.

Share buybacks were led by Alliance Trust, Monks, EP Global Opportunities, Strategic Equity Capital (via a tender) and Polar Capital Technology.

Major news stories over March

Portfolio developments

Corporate news

Managers and fees

Property news

QuotedData views

Recently published research notes

JLEN Environmental Assets – It’s all about renewables

The renewable energy sector has been particularly buoyant over the past 18 months, and JLEN Environmental Assets (JLEN) is well-positioned to benefit. Initiatives such as the United Nations Climate Change Conference (COP26), new regulations on climate related financial disclosure – TCFD – and the Russo-Ukrainian crisis, combined with rising inflation and power prices, have only heightened the attractions of renewable energy.

The managers have identified an exciting pipeline of potential new investments made up of a number of opportunities from electric vehicle charging infrastructure to biomass, an area which JLEN dipped its toe into last year with its acquisition of the Cramlington facility. A recent fundraise means JLEN’s managers can get to work on this pipeline now, while the trust is also on track to achieve its dividend target for 2021/22 of 6.80p.

Ecofin US Renewables Infrastructure Trust – Clear path to growth

Having just had its first birthday in December, Ecofin US Renewables Infrastructure (RNEW) has had plenty of reasons to celebrate. It successfully deployed all its IPO proceeds ahead of target and managed to increase its dividend each quarter, bringing its aggregate total dividends for 2021 to 3.2 cents per ordinary share, a 3.2% dividend yield – again ahead of its 2-3% target for its first financial year (the target is an annual dividend yield of 5.25% to 5.75% for 2022 onwards).

The political and regulatory environment in the US continues to be supportive of substantial and reasonably rapid growth in RNEW’s target markets and as such, performance has been good for the relatively new and small fund. RNEW’s wholly-owned US subsidiary, RNEW Capital, secured a $65m revolving credit facility (RCF) last year with KeyBank (one of the premier lenders to the US renewable energy industry) on attractive terms, which the manager says will help pave the way to growing the company. It is also considering an equity fundraise in the near-term, which we welcome.

Montanaro European Smaller Companies – Unfazed by market turmoil

Montanaro European Smaller Companies (MTE) has built up an enviable track record by backing high-quality growing companies for the long-term. In recent months, fears of interest rate increases (in response to rising inflation) have triggered a sharp reversal of sentiment towards ‘growth’ stocks. The war in Ukraine has made investors more risk averse, and some have sought safety in large cap stocks. MTE’s shares have moved from trading at a small premium relative to net asset value (NAV) to trading on a single-digit discount.

What we will not see in response to this situation is any change in the way in which MTE is managed. MTE has experienced many periods where low-quality stocks outperform or investors retreat to so-called defensive (usually low-growth) stocks. The manager may take advantage of the situation by adding to favoured stocks at attractive prices, but MTE will stick by its portfolio and wait for markets to come back to its way of thinking. The current discount may represent a buying opportunity.

Strategic Equity Capital – Time to look forward

In a vote held on 23 March 2022, Strategic Equity Capital’s (SEC) shareholders have overwhelmingly approved proposals to address the trust’s discount and provide liquidity to those shareholders that need it.

We believe that the focus should now switch to the trust’s much-improved track record under manager Ken Wotton at Gresham House Asset Management (GHAM).

SEC’s investment approach emphasises qualities such as balance sheet strength, free cashflow and structural growth. As we explore in this note, that should ensure that the overall portfolio is relatively resilient in the face of the current market turmoil associated with high inflation, rising interest rates and Russia’s invasion of Ukraine.

Henderson Diversified Income Trust – Ahead of the curve

Henderson Diversified Income (HDIV) is managed with a focus on good quality issuers of debt securities operating in growing industries. Sustainability is an important factor in any assessment of quality. On 25 February 2022, shareholders overwhelmingly approved a new investment objective and policy that seeks to better define and highlight the trust’s approach to environmental, social and governance (ESG) issues.

Recent market jitters triggered by the war in Ukraine have left HDIV trading on a much wider discount to NAV and higher dividend yield than its long-run averages.

Markets were already pricing in a number of interest rate rises this year as central bankers look to choke off inflation. As we explain in this note, the managers have positioned the trust’s conservative and quality-focused portfolio in anticipation of a swift end to this process. That could help trigger the next phase of outperformance by the trust, as bond yields compress and their price rises to reflect lower than expected interest rates.

abrdn European Logistics Income – Logistics safe haven with growth on horizon

As events unfold in Ukraine and inflation rages, the European logistics property sector should prove to be a safe haven for investors. One of the largest investors in the space, abrdn European Logistics Income (ASLI), has a growing portfolio that has significant inflation protection, with all of its rental income linked to inflation indexes and almost two-thirds uncapped (meaning it will rise annually with the rate of inflation).

It has been a busy period of growth for the company, with the manager putting the proceeds from recent capital raises to good use. Its focus has been on urban logistics assets, which now account for 53% of the portfolio and which the manager says display superior rental growth potential. The group acquired an Amazon-anchored portfolio of urban logistics assets in Madrid for €227.3m in December, making the online retail giant its largest tenant. It is again on the acquisition trail following its most recent fund raise, and is in exclusive negotiations on the purchase of four new assets.


Here is a selection of what is coming up. Please refer to the Events section of our website for updates between now and when they are scheduled:


Have you been listening to our weekly news round-up shows? Every Friday at 11 am we run through the more interesting bits of the week’s news and we usually have a special guest or two answering questions about a particular investment company.

Friday The news show Special Guest Topic
10 September GSEO, ASLI, SLI Craig Baker Alliance Trust
17 September APAX, GABI, SUPP Robin Parbrook Schroder Asia Total Return
24 September NCYF, RNEW, FEML, USF Peter Hewitt BMO Managed Portfolio
1 October AIE, CAT, IGC, VNH Tim Creed Schroder UK Public Private
8 October FEML, GRP Steven Tredget Oakley Capital
15 October ATS, CGL, GHS Nicholas Yeo Aberdeen China
22 October FEML, SCIN Claire Shaw Scottish Mortgage
29 October EPG, SHED Richard Pindar Literacy Capital
5 November UKW, GHS, ACIC Rory Bateman Schroder British Opportunities
12 November PINT, SMT, GSEO Helen Steers Pantheon
19 November TIGT, ROOF Iain McCombie Baillie Gifford UK Growth
26 November MTU, JLEN, GRIT, CORD David Cornell India Capital Growth
3 December AAS, TEEC Rob Crayfourd CQS Natural Resources Growth & Income
10 December EWI, TLEI Nicholas Ware Henderson Diversified Income
7 January QuotedData Andrew McHattie 2021 roundup
14 January ELTA, JLEN, HGEN, ASLI Jason Baggaley Standard Life Investments Property Income
21 January BSIF, RICA Keith Watson Geiger Counter
28 January FSF, CIP, SLPE Jonathan Maxwell SDCL Energy Efficiency
4 February AEET, TEEC Sebastian Lyon Personal Assets
11 February THRG, SEC, TFIF, UKML Richard Aston CC Japan Income & Growth
18 February CSH, HONY, NESF, TRIG, SUPR Carlos Hardenberg Mobius
25 February BSIF, CRS, DGI9, JEFI Ian Francis New City High Yield
4 March JRS, MCKS Thomas Moore Aberdeen Standard Equity Income
11 March ATT, JEFI, SGEM James Harries Securities Trust of Scotland
18 March FEET, RAV, TRIG Tom Moore & Henrik Dahlström Downing Renewables & Infrastructure
25 March GRP, ANII, IGC, RKW Blake Hutchins Troy Income & Growth
1 April FJV, ORIT, PSH Ian Lance Temple Bar
  Coming up  
8 April AAIF Yoojeong Oh abrdn Asian Income
22 April ALAI Viktor Szabó abrdn Latin American Income
29 April FSF Richard Kelly & Robert Guest Foresight Sustainable Forestry


Our Independent Guide to quoted investment companies is an invaluable tool for anyone who wants to brush up on their knowledge of the investment companies’ sector.

Appendix – March 2022 median performance by sector

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