Investment Trust Monthly: A regular analysis of brokers views.

Citywire sifts through the month’s analysis from leading investment trust brokers to find the most salient points, so you don’t have to.

Broker quote of the month, Panmure’s Alan Ray on Baillie Gifford Shin Nippon: ‘Overindulgence, read gearing, contributed negatively to performance, more than offsetting the effect of any good stock picking.’

Cazenove on Invesco Perpetual European Absolute Return :
A capacity to do what it says on the tin has not persuaded Caz analyst Christopher Brown to lift his ‘underperform’ rating on the trust.

Brown highlights the fact that the trust has only 50% invested in equities, yet Brown believes equities are likely to outperform bonds.

He said: ‘Since the transformation to an absolute return mandate, the company has been a poor performer relative to its peers (though we appreciate it is not really a fair comparison and the trust has achieved what it set out to achieve).

‘The trust is currently on a 5.6% discount, marginally below the board’s stated minimum level of 5% and just wider than the Europe sector weighted average of 4.4%. Nevertheless, we are not minded to alter our underperform recommendation given our positive view on equities.’

Winterflood Securities on Jupiter Primadona Growth :
Wins' Charles Cade highlights this trust’s moves to deal with a major arbitrageur stake in the form of Carrousel Capital and is upbeat about manager Paul Sheehan’s performance.

‘Since Paul Sheehan took over as manager in May 2002, performance has improved and the fund’s net asset value (NAV) has outperformed the benchmark. However, with a market cap of just £53 million it has struggled to attract investor attention within the global growth sector.’

Cade welcomed the involvement of Jupiter fund of funds maestro John Chatfeild-Roberts who has joined the board and become involved in asset allocation.

He said: ‘He is an experienced multi-manager specialist who heads Jupiter’s Independent Funds Team which manages over £1.4 billion.