Portfolio

This page lists my holdings as of September 2021 and summarises my overall investing approach.

A quick overview

I’d like my portfolio to fund my retirement, from whatever time that happens to be. I suspect I will stay fully invested after I retire, living off my portfolio’s income and the occasional disposal. I’m effectively working part-time right now and I’d expect that to continue to a fair while yet.

I would class my portfolio as slightly conservative but still capable of decent growthh over the next few decades. I also want it to be fairly low maintenance, so I lean towards holdings that I can hopefully leave undisturbed for several years at least.

But I wouldn’t say I am completely wedded to any particular investing style and I expect to keep learning and adapt my portfolio accordingly as the years go by.

Going global… with some themes on the side

Based on these broad aims, most of my portfolio is in global investment trusts and funds.

For a little extra growth, I’m investing in a few themes that I like such as UK small-caps, technology, and biotech/healthcare. I’ve got a bit in infrastructure and renewables as well, to provide a little stability and income. I also have a small position in a venture capital trust (VCT) but I tend to group that with my UK small-cap trusts as it largely invests in the same sort of companies.

Overall, my investments are still somewhat weighted towards the UK. I reckon about 25% of my underlying holdings are UK-listed businesses, primarily through my small-cap and renewable/infrastructure positions, which is a lot higher than the 4% or so you’d get with a standard global tracker.

In addition to investment trusts, I also own an exchange-traded fund and a couple of open-ended funds. My wife and children also have some investments in various global index trackers.

What’s not listed here

I sometimes hold a few individual company shares but I don’t intend to list them here as they tend to be very small positions.

In terms of other assets, a decent chunk of my net worth consists of residential and commercial property. Therefore, I am not 100% exposed to equities. I also keep the usual ’emergency fund’ of cash to cover unexpected expenses.

I don’t own any fixed-income securities (i.e. bonds and gilts) right now although that is something I may add in future.

My strategy

I don’t trade very often, typically just a few times a year, and when I do it’s usually to top up a holding I already own.

Some folks like to trade their investment trusts a bit more actively, perhaps looking to take advantage of discount moves, but I don’t tend to play that game. I’m looking for long-term trends and strategies instead.

As Charlie Munger famously said: “The first rule of compounding is never to interrupt it unnecessarily“.

Market timing isn’t my thing either as most evidence I’ve come across seems to show it’s extremely hard to do successfully on a consistent basis. That means I’m usually fully invested and I regularly reinvest my dividends.

I’ve written about my investing strategy in more detail, outlining what I am aiming to do and how I plan to do it. And you can find my portfolio reviews here, where I track my performance against global and UK index trackers on a quarterly basis.

My portfolio

None of the trusts listed below, or anywhere else on this site, should be considered as buy, hold or sell recommendations. That’s also why I tend to avoid stating any specific position sizes.

Please I am not registered to give any kind of financial advice and what I think suits my investment purposes and my tolerance for risk may not be appropriate for others.

As the saying goes, you should always do your own research.

I’ve organised my list of holdings into themes:

Global

  • Fundsmith Equity (Fund)
  • JPMorgan Global Growth and Income (JGGI)
  • Keystone Positive Change (KPC)
  • Lindsell Train Global Equity (Fund)
  • RIT Capital Partners (RCP)
  • Smithson (SSON)
  • Vanguard FTSE All-World ETF (VWRL)

UK Smaller Companies & VCT

  • Acorn Income Fund (AIF)
  • Baronsmead Venture Trust (BVT)
  • BlackRock Smaller Companies (BRSC)
  • Henderson Smaller Companies (HSL)

Biotech & Healthcare

  • BB Healthcare (BBH)
  • International Biotechnology (IBT)
  • Worldwide Healthcare (WWH)

Infrastructure and Renewable Energy

  • Bluefield Solar Income (BSIF)
  • Gresham House Energy Storage (GRID)
  • HICL Infrastructure (HICL)

Technology

  • HgCapital (HGT)  #

# Hg is a private equity trust but it’s very heavily weighted to technology so, purely for my own purposes, I’m treating it as a technology trust.


Recent sales

  • 2019 – City Of London Investment Trust (CTY)
  • 2020 – Murray International (MYI) and Princess Private Equity (PEYS)
  • 2021 – Caledonia (CLDN)

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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20 Replies to “Portfolio”

  1. Thanks for that excellent review of HG Capital Trust. My investment journey with HGT is very similar. I started investing in the trust in 2008, took up the 2010 subscription offer and continued to add to my holding between 2012 and 2014. Then sold just over half of my shares in 2018 when they were trading on a discount of 6.7% compared with an average 17.7% over the last year. Since then the shares have continued to outperform and occasionally trade at a premium much to my chagrin. Not being well versed in the dark arts of Private Equity I appreciate your efforts explaining complicated things like ‘carried interest’, and the ways of valuing HGT’s investments, but am also very conscious that I have been very lucky with this trust.

    I have had a smaller holding in Harbourvest (HVPE) since 2017. Given the latter’s long-term performance, and its substantial discount relative to HGT, I would be interested in your thoughts on why there is such a wide divergence in discounts and whether HVPE might be a better long-term bet over the next 10 years.

    Thanks again for sharing your thoughts on your investment trust holdings. They are really appreciated.

  2. Thanks Bill.

    HVPE isn’t a trust I’ve looked at in any detail before but I’m aware that HarbourVest has backed some pretty big winners in the past.

    I would guess that investors like the fact HGT is more focused (and where it is focused) whereas it’s harder to see through to the underlying holdings in HVPE. The latter’s discount has been 15-25% for a long time now, so I don’t think its current discount level is unusual and it seems pretty typical for private equity investment trusts, albeit a little harsh given HVPE’s record.

    The fact that HVPE doesn’t pay a dividend and uses US dollars as its base currency might put off some investors as well and maybe result in a slightly higher discount, although both these factors are pretty cosmetic.

    I think a few investors got burnt because of the high level of debt many private equity investments carried into the global financial crisis and so they still treat net asset values across the sector with a little suspicion, especially as the numbers are often only updated fully every 3-6 months.

    What’s more, there’s a long-running debate as to how good private equity returns actually are. Many reports suggest they don’t add any value (above global equities) once costs are taken into account, while other reports reckon they do or that the best returns are concentrated among a small group of super-firms.

    All that said, I wouldn’t be surprised if the discount gap between these two trusts was narrower a decade from now.

  3. This is a great blog with a wealth of information – thanks for sharing. I find your portfolio holdings very useful. Any chance you could put percentage figures/weighting’s against your portfolio holdings?

  4. Thanks, Dave. However, I’ve deliberately not put percentages against my holdings just in case that tempts the odd person into trying to copy what I do — I don’t think that would be a good idea for all sorts of reasons 🙂

    I usually just say that the global holdings tend to be largest and the themed stuff the smallest.

  5. No problem. Yours is an inspiring journey and I hope you continue to share it so we all can benefit from it.

    Any reason you have not considered either North America or Technology given the returns in the past?

  6. Hi Dave,

    I sort of do North America through global trusts as many of them have a hefty weighting towards this region so I don’t feel the need to add specific exposure on top.

    Generally, I’ve steered away from country and regional trusts in recent years as I think they’re harder to call than sectors. That said, China is one area I might make an exception for, as it seems underrepresented in most funds.

    Technology is something I have been thinking of adding for a while but the recent rapid gains have made a little cautious about starting a position. Again, I do get a fair amount of exposure through other trusts but delaying on this has definitely hurt my performance a little.

    I’m generally quite a cautious investor, though, and only make gradual changes to my portfolio each year.

  7. Thanks. I agree, China is underrepresented. I am interested to know which trusts you prefer when it comes to China.

  8. Hi Will, I guess it might be a better option if you’re planning to reinvest the dividends in the same ETF and want to avoid the expense of doing so, especially when smaller sums if involved.

    I haven’t looked into the specifics but I think income tax is still due on notional distributions it’s deemed to make, in the same way they are on the accumulation units of open-ended funds.

  9. Hi Dave,

    Only just seen this on Airbnb and the IPO has taken place now. It’s not a business I have ever looked at closely although we’ve used their service for a few trips in recent years. I like the fact it’s been around since 2008 and the founder/CEO is still there but yet to hit 40. The CEO also seems very highly regarded from what I’ve read in passing.

  10. Dear IT Investor, really appreciate your thoughts on ITs.

    Wonder whether you ever keep an eye on movements in the institutional shareholdings in various trusts?.

    When I see sizeable shareholdings by retail platforms, such as Hargreaves Lansdown, II, and AJ Bell, I regard it as a sign that the trust hasbuilt up a sizeable retail investor following.

    However, I also follow changes in the trust shareholdings of anoymous institutional investors, such as 1607 Capital Partners, Wells, City of London Group etc.

    A case in point is Brunner Investment Trust (BUT), a relatively small global trust where the Brunner family (founders of ICI) have a sizeable stake. Over the last few months Aviva, the trust’s second biggest shareholder, has been steadily reducing its stake from 17.8%, to almost nil which I believe is one of the reasons why it has retained an above average discount of over 15%.

    I noticed yesterday that after Aviva had sold its final stake, and 1607 Capital has emerged with 6.2% stake, making its the second biggest shareholder.

    I don’t know anything about 1607, apart from what is on their website, but my sense is that part of their investment strategy is to sniff out trusts selling on above average discounts, and buying them in the belief that the discount will narrow in time.

    Would be interested in whether you think this idea makes any sense, and whether you ever incorporate movements in institutional shareholdings into your assessments of the trusts you follow.

    Thanks again for your commentary. It is really appreciated.

  11. Hi Bill, I don’t tend to look out for this stuff particularly as I usually take a high-level view of longer-term trends rather than trading in and out of individual trusts where I think the discount might narrow. I might look at big holders if I see it mentioned in an article about a trust I’m researching but I don’t tend to look too deeply as a matter of course.

    I know a lot of trust fans like this sort of strategy but I don’t think I’m especially good at it! Nick Greenwood who runs Miton Global Opportunities is one to follow if you like this sort of thing. I think you do need to follow the sector very closely for a long time to make this style of investing work.

    I think you’re definitely right about those retail platforms indicating a lot of private investor interest though. I know 1607 were big holders of Keystone prior to the appointment of Baillie Gifford earlier this year. I think they’ve sold down from roughly 13.5% to 9.5% there but they seem to have stopped selling for the time being. A search of 1607 + Citywire shows they have been pretty busy on the activity front at other trusts in recent years and they’re described as having a value slant.

    Brunner looks like an interesting one as it’s lagged most other global ITs in recent years so its shareholders may welcome a shake-up. I know Lucy Macdonald left last year after being the manager for nearly two decades as a result of Allianz consolidating its investment teams across Europe. But I think the family owns nearly 30% so it may be hard to push anything radical through unless there is already a split in the family about the direction the trust should take. The discount seems pretty wide but it’s been 10-15% for long periods over the last decade.

  12. If you want to know what makes Baillie Gifford tick it might be worth listening to a longish Investors Chronicle interview with Charles Plowden, a senior partner of Baillie Gifford, who has headed the firm’s Global Alpha team and transformed the fortunes of Monks Investment Trust over the last five years. He is retiring after more than 30 years with Baillie Gifford (BG), and has some interesting thoughts on investing and why BG has been so successful in recent years.

    Whilst the likes of Fundsmith’s Terry Smith, Finsbury Income and Growth’s Nick Train and Scottish Mortgage’s Stuart Anderson, are lauded by the media as investment management stars, I think Charles Plowden, who has had a much lower public profile, should be added to any list of top class investment trust fund managers.

    The podcast on April 30, 2021, is on the IC website. I think you may have to be a IC subscriber to listen to the interview.

  13. Always fascinating and educational.
    Gun to your head for a simple global 2 holding portfolio.
    Fundsmith (quality) and VWRL (or similar global tracker) split equally.
    What do you think?

  14. Thanks, Peter.

    Luckily, I can see that the gun’s not loaded so I might duck out of that question 🙂

    Obviously, holding both of those myself, I would be somewhat biased anyway!

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