View the article online at http://citywire.co.uk/money/article/a594871
Investment trusts: who's up and who's down in FTSE reshuffle
Infrastructure and emerging market trusts among the winners from the FTSE’s latest shuffle.
As part of the latest FTSE index review a number of investment trusts will be be moved up or down on June 18. Although the moves are by no means a failsafe guide to a trust’s performance, they do highlight some of the closed-ended funds with liquidity issues, those with growing market caps and some newly launched portfolios that have won admirers.
Who’s moving up
Emerging market focused trusts have taken the lead among the new listings on the FTSE 250 index. Utilico Emerging Markets joins the ranks, with investments in infrastructure and utilities in the Philippines, Brazil, Thailand and India. The trust has given a net asset value (NAV) total return of 52% over the past three years and 35% over the past five years, and is trading at 167p – an average 3.3% discount to its NAV of 172.6p.
A trust’s NAV total return reflects the increase in the NAV of the shares with any dividend income reinvested at the time dividends were paid.
Raven Russia also moves up from the small cap index to the FTSE 250. The trust invests in Russian commercial real estate. Its NAV has slumped 22.5% over the past five years and its currently trading at 60p, a discount of 13.1% to its NAV of 69p.
The Schroder Asia Pacific trust is managed by Matthew Dobbs and has given a NAV total return of 63% over the past three years and 44% over the past five years.
Advance Developing Markets invests in a range of emerging market investment trusts and has given a 23% NAV total return over the past three years and 5% over the past five years.
Worldwide Healthcare invests in drug and biotechnology companies with top holdings in Pfizer, Roche and Novartis with a NAV total return of 59% over the past three years and 70% over the past five years.
The FTSE Fledgling index also welcomed the BlueCrest Blue Trend trust, a feeder for the firm’s hedge fund of the same name, along with sector GCP Infrastructure . Both had been listed before but were not members of any indices.
Ewan Lovett-Turner, associate director of Investment Companies Research at Numis Securities, said: ‘GCP Infrastructure raised some cash recently so that’s the reason it has come into the All Share and it’s certainly a popular asset class as you’ve got other funds looking to raise money at the moment like INPP, which is already a lot bigger.
‘GCP has also said it’s looking to a tap issue so it’s looking to raise a bit more capital so there certainly strong demand for that sector and the fund is trading on a premium.’
A tap issue allows the trust to issue more shares at a discount to share price when trading at a premium. It helps the trust rein in a high premium and increase liquidity. However, unlike HICL and INPP, which own concessions in infrastructure projects, GCP invests in debt.
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In this guide to investment trusts, produced in association with Aberdeen Asset Management, we spoke to many of the leading experts in the field to find out more.
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Look up the investment trusts
- Utilico Emerging Markets (Ordinary Share)
- Raven Russia (Ordinary Share)
- Schroder Asia Pacific (Ordinary Share)
- Worldwide Healthcare (Ordinary Share)
- Advance Developing Markets (Ordinary Share)
- BlueCrest BlueTrend GBP (Ordinary Share)
- GCP Infrastructure Invs. (Ordinary Share)
- Jupiter Second Split (Geared Ordinary)
- Real Estate Credit Investments (Ordinary Share)
- JPMorgan Russian Securities (Ordinary Share)
- Hansa Trust (Ordinary Share)
- Hansa Trust 'A' (Class A Ordinary)
- Ashmore Global Opp USD (Ordinary Share)
- Aberforth Geared Income (Ord Income)
- Duet Real Estate Finance (Ordinary Share)
- HICL Infrastructure Company (Ordinary Share)
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