My H1 2024 Portfolio Review

Here’s my portfolio review for the first half of 2024. I was up 7.1% while global markets rose 11.1% and the trust sector gained 5.8%.

My performance

This table summarises both my recent and longer-term performance against a range of comparators:

^{Notes: The Vanguard global tracker fund is my main comparator while the more conservative LifeStrategy 60 fund, a UK index tracking fund, and an index of UK investment trusts provide additional reference points. All returns are pre-tax and measured in sterling using a unitised method that adjusts for any money put in or withdrawn. All my trading and admin costs are included in my returns but not for the fund and index returns.} 

Markets continued to rise in the second quarter even though interest rate cuts haven’t materialised as quickly as expected. The 10-year gilt yield rose from 3.6% to 4.2%, roughly the same level it hit back in October 2022 but lower than the 4.6% level it was last autumn. The UK election hasn’t had much effect on markets although we could soon see some tax changes that impact investors.

My performance by holding

Here’s how my positions performed on a share price and NAV basis along with their period-end premium/discount:

^{Note: the links go to my trust profiles, which were written some time ago now and therefore don’t reflect recent events and results.}

The weighted average discount across all my positions was 4.7% at the end of June. That compares to 4.9% at the end of March and as of December 2023, so it has narrowed a fraction.

In terms of trading, I sold a little of my taxable RIT position and reinvested in Bluefield Solar, Gresham House Energy Storage, and Henderson Smaller. I also topped up my position in HICL Infrastructure now that it reckons it can finally start increasing its dividend again.

Global

I don’t have much new to say about Fundsmith, Lindsell Train Global, VWRL, or JGGI — the latter continues to perform very strongly and recently announced a 24% hike in its dividend as its payout is pegged to its end of June NAV per share.

RIT has seen its discount widen out again although there have been reports of the new management team becoming a little more transparent although I don’t think there has been anything that retail investors can access — something that clearly needs to be addressed.

Smithson comfortably passed its continuation vote and the Chairman was re-elected with fewer votes against than last year, which was somewhat of a surprise I thought. This trust has lagged its small and mid-cap benchmark again so far in 2024.

Keystone’s performance has also been disappointing this year. While it held up a little better than other Baillie Gifford trusts a couple of years ago, it hasn’t recovered to the same extent in recent months. I suspect the two are linked. Saba, the activist investor, has continued to add to its Keystone position. And since starting to buy back its shares in November 2023, Keystone has repurchased around 2m of 62m shares — a reasonable pace for a trust of its size but yet to narrow the discount much.

Renewables and Infrastructure

HICL’s underlying cash flows have now increased to the point where it feels comfortable targeting a modest dividend increase for the year ending March 2026. That’s still a little way off but highlights the visibility it has over its future cash flows. HICL has made good progress on selective disposals and reducing the balance outstanding on debt facilities.

Bluefield Solar has had a quiet quarter. I’m waiting  for news on GLIL buying a 50% stake in 100MW of its assets, a deal flagged several months ago as part of a wider agreement.

In my last review, I said I was dithering about Gresham House Energy Storage and waiting for its latest results before deciding on a course of action. In the end, I decided its problems seemed to be more than in the share price and increased my position size by 50% (although it’s still a fairly small holding relative to most others I have).

The share price has since recovered a fair bit since then on the back of slightly better revenues and a tolling agreement with Octopus that has essentially sold income from half its portfolio at a fixed price for the next two years. I like this deal a lot as it seems to have secured a decent level of base revenues, but not tied in GRID for too long, while still allowing for some upside if prices recover quicker than expected. It increases the likelihood of dividends resuming next year, too.

The build-out of the portfolio and site upgrades to 2-hour durations appears by to be a little behind schedule but not to any great degree. A disposal or two wouldn’t go amiss to give investors more confidence in the asset valuations.

Tech-Focused Private Equity

The Money Makers podcast that Jim Strang, the Chair of HGT, did with Jonathan Davis a few weeks ago is worth a listen. The discount here has remained at single-digit levels for a few months now, which is encouraging.

Biotechnology and Healthcare

Worldwide Healthcare faces its next five-yearly continuation vote at its AGM on 10 July, which should be plain sailing. I was a little disappointed that the latest annual results didn’t feature the directors’ review of the managers, something they said would be happening in the previous set of results, but performance here has improved of late.

Nothing of particular note has happened with either International Biotechnology or BB Healthcare although the latter continues to be dragged down by its exposure to small and mid-cap healthcare plays.

UK Smaller Companies

Both Henderson and BlackRock Smaller showed some tentative signs of a long-overdue rebound this quarter. Hopefully, we are still in the very early stages of sustained recovery.

I’ve finally moved my Baronsmead Venture holding out of certificated form and onto a retail platform. It was a very quick process in the end – I was expecting it to take several weeks but it was done in a few days. Unfortunately, all the major platforms that I have looked at don’t seem to offer online dealing in this stock at the moment so I may need to resort to old-fashioned telephone dealing when I do decide to sell some of this position.

Crypto

KR1 has bought back a few shares but recent declines in crypto prices have knocked the value of its portfolio. Its 2023 results were published a lot quicker than in previous years, another sign that governance is steadily improving.

You can read my fund profiles at Money Makers

I am continuing to write fund profiles at Money Makers with recent articles covering Schroder AsiaPacific, Premier Miton Global Renewables, Aurora, BlackRock Smaller Companies, Scottish Mortgage, CT Private Equity, RTW Biotech Opportunities, CQS Natural Resources Growth & Income, Henderson High Income, VH Global Sustainable Energy Opportunities, Artemis Alpha, and STS Global Income & Growth.

The profiles are published on Wednesday mornings and there are now around 150 available to view in our back catalogue.

Here is the sign-up page if you’d like to find out what else you get as a subscriber to Money Makers.

Thank you for reading!

Disclaimer

Please note that I may own some of the investments mentioned above -- you can see my current holdings on my portfolio page.

Nothing on this website should be regarded as a buy or sell recommendation as I'm just a random person writing a blog in his spare time and I am not authorised to give financial advice. Always do your own research and seek financial advice if necessary!

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