Investment Trust – Value and Patience! – We are very pleased that a number of our selections have made positive returns over the last month with jumps of 12.75% and 10.39%.
If you invest in unit trusts, then normally the trend is your friend but investment trusts are different, with investment trusts, it is best to go for deep value and wait, and wait …
So what has affected our selections?
A recent article on Bloomberg provides a pointer “the Brexit vote has created opportunities by driving down the pound and the share prices of some UK companies. The increased affordability more than makes up for the uncertainties prompted by the referendum.”
A sector often ignored by advisers is Private Equity, we are fairly active in this sector using investment trusts, private equity investment trusts often take major stakes in companies, sometimes owning them outright. Typically, they exit after making a multiple of the purchase cost, so if you hold an investment trust which realises an investment at say 2.6 times what they paid for it AND your investment trust is on a wide discount to net asset value. Then as an investor you are doing very well indeed – that value will eventually pass onto you. Only in the last few days one of our selections received an offer for ALL of its shares quite recently providing our clients with a 35.6% profit.
That’s why I love investment trusts!
Please note these selections are normally only available to our Bespoke Investment Clients.