That is the problem with iliquid assets (meaning not publicly traded and without high trading volume, e.g. Private Equity in case of Klarna, or Direct Real Estate or Direct Infrastructure, etc) and that some IT donāt value their portfolio on a regular daily basis, some only update monthly or even quarterly.
And those spaced valuation potentially originate big surprises (bigger time intervals could mean bigger surprises), for the good and the bad.
Those are the reasons, I donāt invest Private Equity/Venture Capital focused IT, despite their higher potential returns.
Iāve been wanted to add a trust from this sector for ages but keep having other ideas and deploying the capital elsewhere.
GRID and GSF, the energy storage trusts, are looking more attractive nowadays, the former was on a hefty premium not too long ago.
Iāve always liked the look of JLEN as a one-stop shop that covers solar, wind, waste, hydro etc.
One of these days, Iāll open a position in at least one of the trusts in this sector. That reminds me to set some discount alerts on the AIC website!
ATST potentially another competitor. All being the same, you could potentially buy either and sell out when the discount narrows and switch back to the popular ETF?
It has yes, but its performance / portfolio is much similar to popular all world trackers. As such (historically anyway), could have sold all world ETFs for FCIT when FCIT was at a say 8-10% discount to NAV, and then do the reverse when the discount narrowed to get an extra 15-20% return in the last 10 years.
It seems like a bit of a no-brainer to take advantage of the discount volatility.
Iām tempted to sell some of my holdings in JGGI or JAM, which are at a premium/near par, to move money into FCIT. Both have done exceptionally well though so Iām loathe to part with them.
MWY, on the other hand, has done relatively poorly and could be a candidate for the chop, particularly with the change in manager.
As good as a short-term play as it may be, I prefer the others long term so Iāll likely stick to them.
FCIT almost feels too balanced. I like trusts to have a clearer investing style/mandate, eg JGGI = growth and income, AGT = value, SMT = growth, JAM = trying to beat S&P, and so on.
Yeah, itās a hyperbolic headline and the argument seems a stretch.
Merging KIDs and factsheets seems sensible. The more simplicity and transparency the better.
As an investor, I want to know the total cost of ownership but the fund management industry does its best to obfuscate parts of that equation.
Itāll be interesting to see how the regulatory regime develops. On the plus side, it seems like thereās a good chance weāll get access to VOO etc, perhaps weāll get US closed-ended funds too.
One benefit of trusts, which I think is overlooked, including by myself, is their boards. Although theyāre not all as independent as they should be, the best ones fight shareholdersā corner on things like fees. This alignment is something you donāt really get with funds and ETFs.
Mid Wyndās a good example. The long-standing managers are retiring/stepping down. I wasnāt especially confident in the new manager proposed by Artemis. It turns out neither was the board, so it has appointed a new management group entirely.
In future, Iām going to pay much more attention to the board as well as the managers. It can make a world of difference having someone like Russell Napier as chairman.
Analysis just published by Trustnet identifies a number of cases where investors in a managerās open-ended fund might now be well-advised to move their money into its equivalent investment company. Doing so isnāt changing your investment strategy ā youāll be getting access to a pretty similar portfolio of assets ā but it could provide a boost to your returns.
The bet youāre considering making here is that discounts will narrow. That isnāt guaranteed ā and timeframes are hard to predict ā but itās worth reflecting on the fact that discounts are currently unusually large compared to what has been typical over the past 10 to 15 years.
Basically sums up my view for ITs. As a long term investor I flip between ITs and OEICs, and now seems a really good time to buy ITs.
