By Annabel Brodie-Smith
At long last spring has arrived and I’m writing this bathed in glorious sunshine.
Having been frozen, then drenched in March, this is so welcome as the Easter weekend approaches. We currently have a lake at the bottom of the garden and I have had to drive through rivers or at least what felt like rivers on the local roads recently.
This month Ian Cowie covers the March Budget’s pension changes and specifically the abolition of the lifetime allowance. Ian believes “Hunt’s reforms are extremely beneficial, increasing consumer choice and engagement.” There have not been any Budget announcements which have prompted me to shout, “Yes” in recent years but this one got me excited. It now makes sense for me and for lots of other people, to start investing in their pension again and investment companies have many benefits for this sort of long-term saving.
Ian explains that investment companies not only give us diversification but also “access to specialist areas of the economy where we might know next to nothing - or economies overseas that trade while we are asleep.” The example in Ian’s portfolio are his investment companies, International Biotechnology and Worldwide Healthcare Trust which invest in the biotechnology and pharmaceutical sector, an area which not surprisingly, Ian knows very little about. But Ian has benefitted as both investment companies held a cancer specialist Seagen, which recently received an agreed $43 billion (£36 billion) takeover bid from the vaccine-maker, Pfizer.
Last week the government announced their plans for ‘Energy Security Day’ which was unofficially known as ‘Green Day’. It makes sense to revisit the ever-topical Renewable Energy Infrastructure sector, particularly as our reader, Andrew Seed wanted to know how the Net Asset Values for these companies are calculated. Faith Glasgow has embraced this topic and also looked at the sector’s prospects for the rest of this year.
It’s clearly not all plain sailing but Winterflood analyst, Shayan Ratnasingam has a preference for total return strategies, such as VH Global Sustainable Energy Opportunities. He also likes companies with “long-dated, contractual, inflation-linked revenue that can provide investors with real dividend growth” such as Greencoat UK Wind, NextEnergy Solar Fund and Octopus Renewables Infrastructure.
And talking of dividends, the AIC’s dividend heroes are back - the 18 investment companies that have increased their dividends for more than 20 years. An exceptional eight investment companies have now raised their dividends for more than 50 years. Don’t miss my videos with three managers of investment companies that have raised their dividends for more than half a century, Job Curtis - City of London Investment Trust, Craig Baker - Alliance Trust and William Meadon - JPMorgan Claverhouse.
And don’t forget the next generation of dividend heroes, those investment companies that have raised their dividends for more than 10 years and less than 20 years.
Finally, we are continuing with our regular ‘Focus on…’ feature which aims to help you get the most out of our website theaic.co.uk when researching or monitoring investment companies. This month we are explaining how to use ‘Screener’ which helps you to easily sort and analyse investment companies. This allows you to dig deeper and research companies using a combination of criteria from discounts and performance to costs and dividend yield.
If you missed the Investors’ Chronicle webinar on the UK with Schroders last week it’s well worth a watch. Sue Noffke, manager of dividend hero, Schroder Income Growth Fund, Jean Roche, manager of Schroder UK Mid Cap Fund and I as well as Rachel Winter from Killik & Co, had a good discussion with David Baxter from Investors' Chronicle. You can register and watch on demand here.
I’m now completely ready for Easter and a week’s holiday. We are not going away because the dreaded GCSEs beckon for my eldest son, Alex. Instead, I’m looking forward to relaxing walks, day trips and some much-needed gardening. The Easter bunny will be organising our annual legendary egg hunt and there’s a plentiful supply of hot cross buns at my barn. Wishing you a Happy Easter!
Annabel Brodie-SmithCommunications Director, AIC
