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How richer would Bolton be in Scottish Oriental?
by Sarah Miloudi on Mar 07, 2012 at 09:33
At the same point, investors were no doubt pondering a conundrum of their own; should they stick with the star manager and hope his trust turns good or sell out and play the Tiger's growth elsewhere.
Some three years ago when the idea of Fidelity launching a China trust for Bolton was first mooted, the options open to trust investors were largely the same as they are now - the purist play would have been JP Morgan Chinese or alternatively Scottish Oriental Smaller Companies, which although has only 14% invested in the region, the vehicle is regarded as a key Asia ex Japan play.
For me, the maths stacks up largely in favour of Susie Rippingall, manager of Scottish Oriental Smallers and part of Angus Tulloch's esteemed First State team.
Judging by the numbers, investing in the trust now would have proved as shrewd a call as 36 months ago.
Bolton vs Rippingall
Back in April 2009, the discount on Rippingall's £193 million Asia trust hovered at around 16%, while the investment company's net asset value (NAV) per ordinary share sat close to par with its MSCI AC benchmark.
Over the three years that followed, Rippingall steered her vehicle toward a 181% surge in NAV as Asian equities performed strongly and the fund manager cashed in. This stellar run has continued year-on-year and has seen Rippingall grow her portfolio 7.42% in 12 months in the face of a declining benchmark.
The trust's market price, as assessed by its discount to NAV, has also benefited. However, the vehicle can still be bought '1.3% cheap', as one broker put it, despite being the star of the closed-end Asia sector.
Investors who bet on Scottish Oriental would have benefited from 218% three-year share price growth (14.33% over one year) as well as the 15% tightening of its discount, sweetening its sector-beating returns.
Blockbuster launch is not enough
Bolton burst back on the scene with his blockbuster launch in 2010, which widened the options for closed-end fund investors keen on China. The trust was touted as being at the higher risk-end of the spectrum, offering a bias towards small and mid cap stocks and a sharp, contrarian manager calling the shots.
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