Just a quick update from me on the future of this blog, or rather, the lack of it.

I am writing very few new articles these days now that I am writing content for Money Makers, but maintaining the website still takes a bit of time and a little money, and it no longer really justifies either. So I’m not intending to renew the web hosting subscription I have when it comes up for renewal at the end of June. I suspect this website will vanish into the ether shortly afterwards.

I’m still tweeting on X now and again, and I have moved my latest annual portfolio reviews to a new site on Substack, although I am not intending to move over my email list.

Thank you to everyone who has read my overly long posts over the last several years, especially those who have been kind enough to leave comments as well. Toodle-oo!

The post A Move To Substack appeared first on IT Investor.

Here’s my portfolio review for 2025. I ended the year up 6%, while global markets rose by 14%, and the investment trust index did marginally better, gaining 16%.

My performance

This table summarises my returns against a range of comparators:

^{Notes: I use the Vanguard Global Tracker Fund as my main comparator, alongside the more conservative LifeStrategy 60 fund, a UK index-tracking fund, and an index of UK investment trusts providing 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 All returns are pre-tax and measured in sterling using a unitised method that adjusts for any money put in or withdrawn.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 trading and administrative costs are included in my returns, but no administrative costs are included for the fund or index figures. The 2025 return for the closed-end index is my estimate, with the official total return figure due to be published in a few days.}

The UK market was a standout this year, with the investment trust index making a decent return, too. Global indices did pretty well, considering they were down 20% in April after the tariff kerfuffle, although the underlying performance of US markets was hampered by the dollar weakening versus sterling, where it went from $1.25 to $1.34.

My own portfolio matched global markets in the first half and the fourth quarter, but lagged badly in the third quarter, when it gained just 1% while global markets rose nearly 10%. For the year as a whole, while I had some strong performers, most of my larger holdings were more or less flat.

Performance by holding

Here’s how my positions performed on a share price and NAV basis:

^{Note: I have linked to my most recent write-up, mostly on the Money Makers subscription site, but some are on this site. Those on this site were all written a few years ago and therefore don’t reflect recent events and results. * The percentage change for SSIT is since my initial purchase, rather than for calendar year 2025.} 

The average discount across all my positions was 5.0% at the end of the year, which is a little bit wider than the 4.2% it was at both June 2025 and December 2024.

My global equity quality funds, Fundsmith & Lindsell Train, plus HGT and JGGI, haven’t kept pace with global indices this year. Style factors have undoubtedly played a part for both Fundsmith and Lindsell Train, as they have for a few years now, but there have been some stock-specific hits in their portfolios, too. HGT’s underlying portfolio still seems to be performing well, and its largest holding, Visma, is reportedly considering an IPO, but private equity valuations have paused for breath after many years of strong gains. Likewise, JGGI has had a run of good years up until this one and has seen a small premium become a small discount.

Healthcare provided some respite in the last few months, with International Biotechnology and Worldwide Healthcare performing particularly strongly and seeing their discounts narrow as a result. The former was down by 30% in April and has ended the year up around 50%.

The last few months have seen four corporate announcements that might result in a takeover/merger, and could see me either sell out or reduce my position.

#1 Bellevue Healthcare (BBH) has had to buy back an astonishing amount of shares in the last few years, thanks to annual redemptions and, most recently, adopting a zero discount control policy. It had nearly 600m shares in issue in the middle of 2022, and now it has just 80m. Its managers tweaked the investment strategy, but its underperformance continued. The board of BBH now wants to appoint Columbia Threadneedle as its new management firm, using a long/short strategy that has a very good record but over a very short timeframe. I sold part of my position a couple of months ago to buy a new holding in the form of Seraphim Space (see below), and I’m yet to decide what to do with my remaining stake. The appointment of the new manager will be subject to a shareholder vote, with the circular expected shortly. The manager change was initially proposed at the end of October, so I’m not sure if anything is causing a delay. BBH’s enhanced dividend policy looks likely to go, and I can’t say I am pleased with the basic fee remaining the same under the new manager, while a 15% performance fee is being introduced on top.

#2 Smithson (SSON) has thrown in the towel as a listed company after being unable to close its discount by buying back shares. As many people had observed, it never made much use of the closed-ended structure. The initial premise was that many of the companies it buys would have limited liquidity, so they weren’t best suited to sitting in an open-ended fund. But having had no particular issues selling stocks within its portfolio to fund buybacks, it seems that no longer applies. Smithson plans to convert to an open-ended fund, and it will continue to be managed by Simon Barnard. The transaction is scheduled to take place by March 2026, so I have a little time to decide what to do. I suspect I will take the cash for part of my position.

#3 HICL surprised everyone in November when it proposed a tie-up with Renewables Infrastructure Group (TRIG), also managed by InfraRed. The three-year notice period on the management contracts seemed to be a main driver, making tie-ups with other trusts face an additional cost hurdle. A couple of weeks after it was announced, and after a shareholder backlash, the deal was called off. HICL shares fell on the initial announcement and then rebounded when the deal was canned, reflecting the widely-held view that the proposal was a much better deal for TRIG shareholders. HICL had seemed to be on an upward path after a lengthy period of portfolio refocusing, so it was disappointing to see its board put forward such a questionable transaction. I suspect there will be some corporate action here at some point, and the result may be that HICL merges with INPP or gets taken over by a private fund.

#4 Bluefield Solar Income (BSIF) has had a truly miserable 2025. After saying earlier in the year that it was effectively in run-off mode without access to fresh equity capital to fund its development pipeline, it proposed a merger with its investment manager so that it could form an operating business and make it easier to raise new funds. But although it said that its major shareholders had shown interest in the idea, a wider consultation obviously revealed much less enthusiasm, as the plan was swiftly abandoned and BSIF has now put itself up for sale. Add to this a weak power price environment, the government saying it might alter the indexation of renewable subsidies, and wider concerns about the push towards Net Zero, and the BSIF share price has sunk to all-time lows. It now yields 13% and sits on a 40% discount. Operationally, the business still seems to be performing reasonably well, but from a structural point of view, it did get caught out with a bit too much debt when interest rates began to rise a few years ago, giving it much less room for manoeuvre. I suspect it will take a few months before any preferred bidder and indicative price are announced, so I’ll keep holding for now to see how things develop. Of course, it’s not a great time to be a forced seller of renewable assets.

There were a few items of note across my remaining holdings.

KR1 moved from the smaller, less-regulated AQUIS market to the London Stock Exchange at the end of November, which should improve the liquidity of its shares in the long run. At the moment, though, it is suffering badly from the recent downturn in crypto prices, with the value of its portfolio at its lowest level since I purchased my initial position nearly five years ago. Its focus is also shifting a bit, investing less in new early-stage projects (a few recent launches are trading well below the money KR1 invested), instead looking to build up its staking activities.

Seraphim Space (SSIT) is a trust I have been watching for a few years now, having reviewed it for Money Makers a couple of times. I bought a small position at the end of October, funded by a part-sale of Bellevue Healthcare. Like most growth capital trusts, it has traded at a wide discount recently, but a number of its holdings, particularly ICEYE and D-Orbit, are experiencing a step change in the size of their operations. The portfolio has become very concentrated, so it’s high risk.  Its a small position within my portfolio right now, although I will probably add to it over time. Its share price rose significantly in December, meaning it is now trading around its last published NAV, with investors anticipating an upwards revaluation for ICEYE on the back of recent contract wins.

The quiet reinvention at RIT Capital Partners (RCP) seems to be progressing nicely, with CEO Maggie Finari popping up on various podcasts and videos and looking more comfortable in spelling out the trust’s strategy. The discount remains in the 20s, so wider investor sentiment is yet to recognise much of a change.

Gresham House Energy Storage (GRID) continues to grind away at its three-year plan. Long-term floor facilities have been agreed with various counterparties, enabling it to repay its old £180m facility at a 300 basis point margin with a new £220m facility at 225 basis points, half of which is due to be paid down over the next seven years. This will fund augmentations at several of its assets, increasing their duration to two hours, with further financing reportedly on the way to help pay for several new projects. GRID’s much-heralded return to the dividend list turned out to be spectacularly underwhelming, with the trust paying just 0.11p for 2024 and signalling 0.25p for 2025, preferring to retain nearly all its surplus cash flow to help build its portfolio. I don’t have a particular problem with that, but early communications suggested a much higher payment was likely. There have also been some changes to how early in the construction process valuations are based on expected future cash flows rather than cost — this seems a little cute, but should be mostly an issue of timing. GB battery storage revenues have been subdued in recent months, given that they should be a little higher over winter, with system operator improvements that will see overall battery usage increase taking their time to be implemented. I still see a reasonable amount of medium-term upside here, but this position is still one that requires close monitoring.

Lastly, Indratti van Hien has now formally taken over from Neil Hermon at Henderson Smaller Companies, with Cassie Herlihy joining as deputy in November, moving over from Gresham House. The trust’s next half-year report, due in a few weeks, should give us a bit more insight into the ongoing refinements to the investment strategy. Its recent performance has been a little better than BlackRock Smaller, which I suspect is partly thanks to its more aggressive stance on gearing.

Trading

My partial Bellevue Healthcare/Seraphim switch is the main change I have made this year. In recent months, I have made small top-ups at Henderson Smaller, BlackRock Smaller, RIT Capital, KR1, Bluefield Solar, and Gresham House Energy Storage.

The next few months may see a little more trading activity from me than usual, depending on what I decide to do with Smithson and Bellevue Healthcare, and whether there is a deal put forward for Bluefield. Something may happen at HICL, but perhaps at a later date. I’m still minded to keep reducing the number of holdings I have, and this does seem like a good opportunity for some simplification.

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!

The post My 2025 Portfolio Review appeared first on IT Investor.

It’s that time of the year again. The ninth edition of The Investment Trusts Handbook has just been published. It is edited, as always, by Jonathan Davis, my business partner at Money Makers.

Regular readers will probably know the usual format by now. The hardcover version retails at £29.99, but thanks to the Handbook’s sponsors, the e-book/Kindle version is free.

Jonathan reviews the last year, with detailed thoughts on how the sector has been tackling discounts and Saba Capital, the activist investor that has taken large stakes in many trusts and sought to oust several boards of directors. Other reviews are provided by Hawksmoor’s Ben Conway, regarding cost disclosure (where just this week we had some promising news), James Carthew on geopolitics and AI, and Andrew HcHattie, looking at the many trusts where we have seen corporate action.

There are two forums — one with investors and one with trust chairs — with the latter providing a useful perspective that private investors don’t often appreciate. Themeatic chapters are written by Tom Treanor of AVI, Simon Elliott of JPMorgan, and ex-MIGO manager Nick Greenwood, among others. There are also chapters on UK and Indian equities, private equity, Asia, and the US. Daniel Summerland of Fidelity also provides a useful introduction on how private investors can begin to incorporate AI into their own research.

The Handbook concludes with around 80 pages of data, covering long-term performers and long-serving managers, big issuers and returners of capital, discount control policies, enhanced dividend payers, directors with the most ‘skin in the game’,  and much more.

You can order a copy by visiting the Harriman House website.

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!

Subscribe to IT Investor

Get an email alert every time I publish a new article. Your email address won't be used for anything else.

The post The Investment Trusts Handbook 2026 appeared first on IT Investor.

Here’s my portfolio review for the first half of 2025. I ended the period up 0.4%, the same as global markets, while the investment trust index did better, gaining 4.6%.

My performance

This table summarises my returns against a range of comparators:

^{Notes: I use the Vanguard global tracker fund as my main comparator with the more conservative LifeStrategy 60 fund, a UK index tracking fund, and an index of UK investment trusts providing 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 trading and admin costs are included in my returns, but there is no equivalent charge for the fund or index figures.} 

My portfolio tracked global markets over the last six months, at one stage doing a little better and then slipping back. The S&P is up 6% year-to-date, but for UK-based investors like me, the weakness of the dollar negated that and meant global indices ended the half year pretty much where they began, although they recovered all of the 15% fall they experienced by early April after the US introduced widespread tariffs.

It’s been a decent half-year for the trust sector, up around 4.5%, while UK markets have risen by 9%. Everyone seems very keen to write off the US stock market after a few months of relative underperformance, and there’s no doubt that at 23.5 times estimated 2025 earnings, it remains richly priced. Earnings growth over the next few years needs to do a lot of heavy lifting.

Performance by holding

Here’s how my positions performed on a share price and NAV basis:

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

The average discount across all my positions was 4.2% at the end of June, the same as the end of 2024, although there has been some significant narrowing of discounts in recent months at the three renewable/infrastructure trusts I hold. Healthcare and KR1 excepted, the rest of my holdings only saw their NAVs change by a few percentage points — it’s unusual to see such a low rate of dispersion.

There weren’t a lot of major changes operationally, but I’ll pull out a few points of note…

It was pleasing to see Gresham House Energy Storage mount a recovery, although with a discount of nearly 30% to NAV, I still think there is more to go for here. Industry revenues were around £76,000 per MW per year over the first half of 2025, compared to just £50,000 during 2024. The main points of the trust’s three-year plan revealed at the end of last year still seem to be in place. Of course, in true GRID fashion, the timetable has begun to slip already, with the refinancing that is designed to unlock the whole process taking longer than indicated.

Both Bluefield and HICL have also seen their discounts narrow a little this year, but are still looking for ways to close the gap more permanently.

On the downside, both JGGI and Fundsmith Equity have lagged by a few percentage points, nothing that I find particularly concerning, and healthcare has struggled once again. There seems to be an increasing disconnect between the long-term earnings growth that healthcare (still) seems to offer and investor appetite. Political events in the US haven’t helped, but their effect on healthcare seems overstated, so I am happy to keep an allocation to this sector. That said, now that Bellevue Healthcare has introduced a zero discount policy in place of its annual redemption mechanism, it’s in danger of shrinking into oblivion. This trust had 587m shares three years ago, 283m six months ago, but now has just 170m and a market cap of £200m. Sycona, a sizeable trust in the same sector, has also decided to return cash to its shareholders, albeit over an extended period.

JGGI has merged with yet another trust in the form of Henderson International Income, but it looks like its run of four consecutive years of beating its benchmark came to a halt with the year ended June 2025. It’s also slipped to a small discount. Its performance remains well ahead over 3, 5, and 10 years, however.

Neil Hermon plans to retire in September of this year after 22 years as lead manager at Henderson Smaller Companies. Deputy manager Indriatti van Hien is taking on the lead role, so I will be watching this trust a little more closely over the next couple of years to see how that change plays out.

KR1’s focus on nascent cryptocurrencies has seen it left in the shade by the rash of bitcoin treasury companies that have emerged over the last few months, copying the playbook laid down by Microstrategy. I have been a little disappointed by the lack of new investments KR1 has made in the last year or so, and the relatively few of its earlier investments that have reached the stage of launching a token.

Top-ups

I haven’t sold out of any positions held at the start of the year. I have topped up Worldwide Healthcare, International Biotechnology, BlackRock Smaller Companies, Smithson, HICL, KR1, and Gresham House Energy Storage. Some of those purchases were reinvesting dividends, and some were moving legacy taxable positions into my ISA, as a result of which I slightly reduced my position in RIT Capital Partners.

Read my fund profiles at Money Makers

I am continuing to write fund profiles at Money Makers with recent articles covering HICL Infrastructure, Fidelity Emerging Markets, VietNam Holding, Pershing Square, Schiehallion, Tritax Big Box, JPMorgan US Smaller, European Opportunities, Law Debenture, HgCapital, RIT Capital Partners, River UK Micro Cap, Invesco Global Equity Income, Baillie Gifford US Growth, Bluefield Solar Income, Finsbury Growth & Income, Augmentum Fintech, Worldwide Healthcare, Custodian Property Income, Personal Assets, Scottish Oriental Smaller Companies, TR Property, Syncona, Rockwood Strategic, and Schroder Oriental Income.

The profiles are published on Wednesday mornings, and there are now around 170 available to view in our back catalogue.

Here is the sign-up page if you’d like to learn more about what else you get with 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!

The post My H1 2025 Portfolio Review appeared first on IT Investor.

For the last few years, the AIC has published a very useful piece of research showing which trusts would have performed best if you had put your full ISA subscription into them on 6 April each year since ISAs were introduced in 1999 and reinvested all the dividends received.

When the list was first produced in 2019, just one trust (the now-defunct Aberdeen New Thai) would have made you a trust ISA millionaire. There was no list in 2020, but in the lists produced from 2021 to 2024, there were around 30 trust ISA millionaires.

The 2025 list, published at the end of February and therefore before all the tariff kerfuffle, showed there were now 50 trusts in this category, thanks to the strong market returns over the course of the previous 12 months.

I reckon there were around 110 trusts in existence when ISAs were introduced in April 1999 that are still around today, so the 2025 list contains nearly half of all surviving trusts. The size of the sector has typically been between 300 and 350 over the last twenty years, so these 50 make up around perhaps a seventh of all the trust available to investors back in 1999. Many of those that have fallen by the wayside would have been acquired by the surviving trusts.

Here’s the full list taken from the AIC press release. I have added a couple of extra data points in the form of last year’s ranking and an annualised figure for the share price return, and made the table sortable.

^{Source: theaic.co.uk / Morningstar. AIC members only, excluding VCTs and companies that are winding up. The column headed “share price total return” shows the share price total return over the period based on a single lump sum investment on 6 April 1999. The column headed “total value” is the total value of an investment on 31 January 2025 if the maximum ISA limit for each year had been invested annually from 1999 to 2024, with the investment being made on 6 April each year.}

When ISAs first became available in 1999, you could have invested £7,000 a year. The allowance remained the same for a decade but then saw a few large jumps to £10,200 in 2010, £15,000 in 2014, and the current level of £20,000 in 2017. There were a few other inflation-linked increases along the way as well.

If you invested your full ISA allowance for each year, your total subscriptions would come to £326,560. So £1m represents a tripling of your contributions over a quarter of a century, or just over 9% a year on a compounded basis. We now have four trusts that would have generated £2m or more, equivalent to about 14% a year.

Of course, markets don’t work on an orderly basis with the same returns year after year; the sequence of returns affects the numbers as well. Broadly speaking, trusts that performed better recently will have produced a greater monetary amount despite having a similar or even lower annualised return over the whole 25 years. JPMorgan American is a good example of this — US market returns were weak in the 2000s but have been very strong in the 2010s and 2020s, so it takes fifth spot despite having a relatively low 10.5% annualised return. The opposite is true for abrdn Asia Focus, which comes sixth despite returning a much higher 15.9% a year.

Small remains beautiful

The presence of smaller company trusts has been notable in each version of this list, and it is a feature again this year. While non-UK smaller company trusts were among the biggest climbers this year, UK small-cap trusts were among the heaviest fallers as this particular sector continues to struggle.

Technology, biotech/healthcare and private equity all feature prominently. On a regional basis, Asia Pacific has arguably done the best although both the UK and Europe boast numerous appearances. Global funds have done pretty well, with most of the mainstream Global sector on the list, however, emerging markets and the flexible sector have very little representation. Part of this reflects the number of eligible trusts in each category of course.

Nearly the entire alternative asset universe is too young to be included in this list. Income trusts are largely absent as well, and those that do feature either have an enhanced dividend policy or have a fairly tenuous claim to belonging in those sectors.

For my profiles over at Money Makers, I have covered all but two of these 50 trusts, namely JPMorgan US Smaller Companies (which is pencilled in for next month) and JPMorgan European Growth & Income. In my portfolio, I currently hold five of the fifty, but I used to own nine others, where I should probably have been more patient!

Global markets are down by around 15% since the 2025 list was compiled, so it’s possible we could see fewer trusts in the 2026 list, and it may take a little while for the £3m mark to be breached. But of course that depends on what happens over the next several months!

How the list has changed over time

If you want to look at the lists from previous years, here are links to my previous articles or the original AIC press release:

• 2024 (32 £1m companies)
• 2023 (28 £1m companies)
• 2022 (30 £1m companies)
• 2021 (28 £1m companies)
• 2020 — no list produced
• 2019 (1 £1m company)

P.S. I’m not doing a portfolio review for the first quarter of this year as I’m planning to do these less frequently, probably just mid-year and year-end. For the record, I was down around 4.5% over the first three months and am now down around 9%, which is around a couple of percentage points ahead of global markets.

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!

Subscribe to IT Investor

Get an email alert every time I publish a new article. Your email address won't be used for anything else.

The post Trust ISA Millionaires: 2025 edition appeared first on IT Investor.

Here’s my portfolio review for 2024. I ended the year up 10% while global markets rose 18% and the investment trust index gained 9%.

My performance

This table summarises my returns against a range of comparators:

^{Notes: I use the Vanguard global tracker fund as my main comparator with the more conservative LifeStrategy 60 fund, a UK index tracking fund, and an index of UK investment trusts providing 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 trading and admin costs are included in my returns but not for the fund or index returns.} 

2024 was similar to 2023 in many ways. My portfolio, the 60/40 fund, the UK market, and the trust sector all produced a decent absolute return, but global markets did much better thanks to another strong performance from mega-cap US stocks. Over the last seven years, my return remains roughly halfway between global markets and the range of other comparators I monitor.

Regarding the market backdrop, we have seen some interest rate cuts but with the threat of higher inflation not yet entirely dealt with, it looks like the path downwards will be more gradual than previously expected. Valuation multiples still look stretched for US stocks with Yardeni’s earnings squiggles suggesting the S&P 500 trades on a P/E of 21.5 times for 2025 and 19 times for 2026 with forecast earnings growth of 12% for both years. So a third year of strong gains for US stocks seems unlikely but, of course, markets often tend to surprise us. Global markets are on a forward P/E of around 18.5 times according to the latest factsheet for MSCI ACWI.

Performance by holding

Here’s how my positions performed on a share price and NAV basis:

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

The average discount across all my positions was 4.2% at the end of December, compared to 4.7% at the end of June and 4.9% as of December 2023. The narrowing of the discount at HgCapital was the main factor here offsetting discounts widening at most of my other positions.

JGGI, HGT, and VWRL were my best performers in 2024. Lindsell Train did better than Fundsmith but both of them underperformed global markets again. UK smaller companies did well earlier in the year but gave back most of their gains by the end and it was a similar story for healthcare. Sizeable discounts appeared at all three of my renewables/infrastructure holdings in 2023 but they got even wider in 2024. All in all, it was very uninspiring year for my three side themes. Gresham House Energy Storage won turkey of the year by some distance although KR1’s performance in the year that Bitcoin surpassed $100,000 for the first time was disappointing.

I got rid of my entire holding in Keystone Positive Change after it published its rollover plans a few weeks ago, hence its absence from the table of returns. It was up around 10% on the year when I sold. Its discount to NAV had narrowed so, rather than waiting a few months for the cash exit/rollover, I decided to sell into the market and reinvest the proceeds across most of my other trust holdings where discounts had widened somewhat. I think the only trust I didn’t top up was HgCapital, as that is one of my largest positions already. Saba Capital has since popped up with a meeting requisition request and is looking to scupper the Keystone rollover vote. With a 29% stake, it may well succeed.

There wasn’t a great deal of news from my holdings but there are two worthy of comment…

Bellevue backtracks

Bellevue Healthcare’s annual redemption policy has caused its board a headache recently. It had to buy back 14% of its shares in November 2023 and then a whopping 36% in November 2024, reducing its market cap to £350m. Concerned that some investors were taking short-term advantage of the facility, it proposed replacing it with an annual conditional tender offer for up to 10% of its shares instead.

Although the board said it consulted shareholders about removing the redemption facility, it appears it didn’t discuss its proposed alternative. The 10% cap was reasonable I thought, but the fact performance was to be measured over the preceding three years meant the first possible tender offer would be in 2028. Within a week, the plans were withdrawn. I suspect some sort of compromise will be struck but it’s not a good look. The trust itself, with its focus on small and mid-caps, has lagged its benchmark for the last three years. I’m sticking with it for now but when healthcare small and mid-caps do find favour again it will need to start performing.

GRID sets out an ambitious three-year plan

Gresham House Energy Storage continues to dominate both my research efforts and these portfolio reviews despite being one of my smaller positions. It held a Capital Markets Day in November setting out a three-year plan to increase its EBITDA from £45m in 2025 to £150m by 2027. The projected growth comes from adding batteries to existing sites (£33m), building half a dozen new sites (£47m), and an as-yet-undisclosed new revenue stream (£25m) where negotiations have been taking place for a while now. The first two will require a lot of fresh capital and with the shares at a big discount, that rules out the now seemingly old-fashioned route of equity fundraising.

To put that projected growth into historical context, EBITDA was around £25m in 2023 and looks set to be around the same level in 2024, but it reached nearly £50m in 2022 when the portfolio was a lot smaller and frequency response revenues were much higher.

GRID plans to refinance its existing debts of around £175m and seems to think it can secure a lower rate of interest due to the greater proportion of contracted revenues it now has. Its current margin is 300 basis points over SONIA, much higher than most alternative asset trusts, although a fair chunk of its borrowing is fixed at a lower rate with an interest rate swap. GRID will then look to secure additional funds from project financing, similar to the funding models used by solar and wind power trusts. The amount to be raised and therefore the additional interest cost coming off that £150m EBITDA target is to be determined.

It all sounds very ambitious but a successful completion of the initial refinancing could provide a decent steer as to whether the further and much larger financing plans are viable. GRID is also talking with an investor about buying into its Glassenbury project at around NAV, augmenting it with additional batteries and taking it from a 50MW sub-one-hour duration asset to a four-hour asset. This might provide a useful marker as to whether its asset valuations are realistic, although the upcoming sale of Harmony Energy’s 395MW two-hour portfolio is probably even more important. I don’t think there have been any major UK battery projects changing hands so we don’t have the benefit of markers from other transactions.

Battery storage revenues jumped in December to a run-rate of £84,000 per MW per year, according to Modo Energy, up from £47,000 over the first eleven months of 2024. That’s encouraging but we’ll have to see how sustainable that proves to be. GRID has contracted half its portfolio at just below £60,000 per MW per year to Octopus so it won’t have seen all of that upside.

Finally, there have been a few director buys at GRID and Ben Guest has taken his stake above 3% again. He now owns 17.4m shares which is up from 14.4m at the end of 2022, the last disclosure I could find. GRID reckons that if its EBITDA is in the range of £45m to £55m in 2025 that will translate into cashflow per share of between 4.5 and 6.2p of which a sizeable but as yet undecided proportion will be paid out as a dividend, starting in the third quarter.

It’s messy and it’s complicated and management has been guilty of overpromising before. So while I can see the shares moving quite a bit higher from here, assuming GRID can deliver most of what it has planned, I’m hesitant to take a much larger position. I have roughly the same amount in GRID as I do in HICL Infrastructure and I have a little bit more in Bluefield Solar.

Read my fund profiles at Money Makers

I am continuing to write fund profiles at Money Makers with recent articles covering Murray Income, Baillie Gifford Shin Nippon, JPMorgan Global Growth & Income, BlackRock Latin American, Schroder Japan, Temple Bar, Manchester & London, CQS New City High Yield, Mid Wynd, Henderson Opportunities, and Edinburgh Worldwide.

The profiles are published on Wednesday mornings and there are now around 170 available to view in our back catalogue.

Here is the sign-up page if you’d like to find out what else you get with 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!

The post My 2024 Portfolio Review appeared first on IT Investor.

Today sees the publication of the eighth edition of The Investment Trusts Handbook, the essential sector guide.

As in previous years, the eBook edition is free while the hardcover edition retails at £29.99.

Jonathan Davis reviews the year just gone and what lies ahead for the trust sector and there are contributions from: John Baron, Alan Brierley, James Carthew, Ben Conway, Richard Curling, Alex Davies, Simon Edelsten, Simon Elliott, Hugh Gimber, Nick Greenwood, Peter Hewitt, Alastair Laing, Anthony Leatham, Ewan Lovett-Turner,
Andrew McHattie, Sachin Saggar, Lucy Walker, and Joe Winkley. These cover a wide range of topics from how boards are tacking discounts and can market trusts, the challenges facing alternative asset funds, improvements on the cost disclosure front, continuation votes, and much more.

This year, I have contributed three trust profiles on Allianz Technology, abrdn Asian Income, and India Capital Growth plus there are Q&As with several managers including Paul Niven (F&C), Joe Bauernfreund (AVI Global and AVI Japan), Nitin Bajaj (Fidelity Asian Values), Sue Noffke (Schroder Income Growth), Stephen Paice (Baillie Gifford European Growth) and Rhys Davies (Invesco Bond Income Plus).

We also have the usual sections on how to analyse investment trusts and tables covering the oldest trusts, best long-term performers over 10, 20 & 30 years, longest-serving managers, lists of trusts with specific discount control policies, enhanced dividends, and so on.

In short, there’s something for everyone interested in investment trusts, whether you’re just starting or have been an investor in the sector for decades.

You can order a copy now at Harriman House and Amazon.

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!

Subscribe to IT Investor

Get an email alert every time I publish a new article. Your email address won't be used for anything else.

The post The Investment Trusts Handbook 2025 appeared first on IT Investor.

Here’s my portfolio review for the third quarter of 2024. I was up 7.5% over the first nine months of the year while global markets rose 12% and the investment trust index gained 6%.

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 with the more conservative LifeStrategy 60 fund, a UK index tracking fund, and an index of UK investment trusts providing 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 trading and admin costs are included in my returns but not for the fund and index returns.} 

I broadly matched the global tracker and investment trust index over the third quarter with a gain of just under 1%. Both LifeStrategy 60 and the UK tracker performed a little better, rising some 2%. So there was not much change overall, despite the wobble markets had in early August, reportedly due to worries about the yen carry trade.

My performance by holding

Here’s how my positions performed on a share price and NAV basis:

^{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 4.0% at the end of September. That compares to 4.7% at the end of June and 4.9% as of December 2023. HGT, which is one of my larger positions, probably accounted for a lot of that reduction with most of my other holdings remaining on much wider discounts than they have had historically.

In terms of trading, I did very little as usual just topping up HICL, BlackRock Smaller and Lindsell Train using the dividends I received.

Rather than doing a review of every position, I’ll just highlight a few recent developments at three holdings.

Keystone throws in the towel

Keystone said last year it would hold a continuation vote in 2027 to give shareholders a chance to evaluate its revised strategy. But now it looks like it’s giving up entirely due to its weak performance of late and the low liquidity of its shares. I suspect that Saba taking a stake of over 20% played a role, too.

Discussions have been held with major shareholders about the company’s future and shareholders will be able to opt for a cash exit or roll over into the Baillie Gifford Positive Change Fund, the open-ended equivalent that has £1.8bn of assets. The exact mechanics are to be determined, but it looks like the 4% of Keystone in private companies will be excluded from the calculations and the proceeds from selling these will be distributed later. I’m not sure why £6m of private assets can’t be taken on by a £1.8bn fund but there may be legal or regulatory reasons prohibiting that.

The transaction is expected to be completed in the first quarter of 2025 but I will probably wait for full details before deciding whether to sell into the market, take the cash, or roll into the open-ended fund and sell after that. I can’t say I will be sad to see this position go and the prospect of having one less holding to watch is rather appealing!

GRID takes a large write-down

GRID issued a 30 June NAV update in early September ahead of its interim results saying its NAV per share fell from 129p at the end of 2023 to 109p. The introduction of Modo as a second and more conservative power price forecaster was cited as the main reason for the fall. There was the usual slight slippage in the dates for its remaining projects becoming operational. The shares fell about 15% on this news but remained well above the lows seen in April.

The half-year results released at the end of September contained a little more detail, including updated revenue curves so we could see that the revenue reductions were across the board with a further delay in the forecast recovery of revenues to 2030 rather than 2027. GRID has done itself no favours here and is still somewhat vague about exactly how this situation was allowed to develop. Clearly, it should have been more upfront about just how much the various market forecasts differed in the past.

The results contained some metrics on how the portfolio is being valued on an EV-to-EBITDA ratio but they seemed pretty basic and didn’t add much to what most investors could do themselves. What’s needed is some stats on comparable deals to put these numbers into better context.

None of GRID’s storage projects have been sold yet either, so we lack some much-needed comfort on the trust’s NAV. A group of eight small assets was on the block but it looks like these will be retained and upgraded instead as battery size and cost reductions now make this a much more attractive option. There was said to be an offer that was close to the new lower NAV for this sub-group of the portfolio but GRID says it is now looking at selling just one or two assets.

Assuming no project sales, debt should peak at £175m at the end of this year with about £10m cash held for working capital purposes. I think £110m of this is hedged at 3.7% with the remainder at SONIA plus 3.0% (i.e. 8%) with the facility running until the end of 2027. So there is no refinancing required for a while yet.

Interestingly, a new and very large project has appeared in the trust’s development pipeline. Based in Cockenzie in Scotland, it’s 342MW and for a 2-hour duration — over three times the size of any of GRID’s current assets. Prior to this, the last year or so had seen GRID’s pipeline shrink in size as options to acquire various projects expired.

Dividends should resume in 2025 thanks to the tolling agreement with Octopus but we won’t know any specifics for several months. GRID wants a more than fully covered and sustainable dividend so I would be surprised if the payout was higher than 3.0p versus the 7.35p originally planned for 2023. The trust is also hosting a Capital Markets Day in November where it will unveil a three-year plan for 2025 to 2027.

I’m sitting still with this position for now despite the gaping discount to its quoted but questionable NAV. Battery revenues have recovered from their lows of the first quarter and there are decent reasons to think that will continue as system improvements are made and more renewables come online. But despite the potential upside, investors aren’t willing to give GRID the benefit of the doubt after its numerous recent missteps although I did note there was a director purchase just after the results, the first for several months.

RIT does some marketing!

It is pretty brief and very dry but it was good to see Maggie Fanari, the new lead manager at RIT Capital Partners speak to AJ Bell. I’ve held this trust since 1996 and this is the first time I can recall it doing any sort of marketing to retail investors like this. The trust’s website seems to have had a refresh as well.

Hopefully, this is just the start of a more meaningful attempt to narrow the discount. Who knows, might we even see a live-streamed AGM presentation next year?

Read my fund profiles at Money Makers

I am continuing to write fund profiles at Money Makers with recent articles covering Bellevue Healthcare, Global Opportunities, abrdn UK Smaller Companies Growth, Smithson, abDrn Asia Focus, Ecofin Global Utilities & Infrastructure, Edinburgh Investment Trust, Oryx International Growth, the newly created Henderson European, Fidelity China Special Situations, and Target Healthcare REIT.

The profiles are published on Wednesday mornings and there are now around 160 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!

The post My Q3 2024 Portfolio Review appeared first on IT Investor.

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!

The post My H1 2024 Portfolio Review appeared first on IT Investor.