By Annabel Brodie-Smith
I hope you all had a lovely Christmas and New Year.
This year mine was a relatively relaxed family one. Lots of walks with Sherlock the dog around the fields before collapsing on the sofa to consume cheese, chocolate and cake – bliss!
However, there was some big news before Christmas which meant the holidays were not as relaxed as I had hoped. Exactly one week before Christmas, the US activist Saba Capital Management requisitioned general meetings at seven investment trusts, where it has significant shareholdings. The investment trusts are Baillie Gifford US Growth, CQS Natural Resources Growth & Income, Edinburgh Worldwide, Henderson Opportunities Trust, Herald Investment Trust, Keystone Positive Change and The European Smaller Companies Trust.
Saba is proposing major changes at the trusts – replacing the existing board with just two new directors – one representative from Saba and one nominated by them. They are planning radical changes to the strategy, mandate and manager. For example, they have suggested the trusts’ strategy could be to invest in discounted investment trusts and Saba could even be appointed manager. Do take a look at our thoughts on the unanswered questions about Saba’s proposals.
“This is your opportunity to have your say on the future of your trust. With significant retail investor shareholdings in these funds, the final decision rests with you.”
If you are a shareholder in these trusts, it’s vital that you vote on this issue. This is your opportunity to have your say on the future of your trust. With significant retail investor shareholdings in these funds, the final decision rests with you. It’s time to stand up and be counted. We publish information to help you vote your shares if you hold them on platforms and please do take a look at our article on this.
Generally retail investors don’t vote their investment trust shares. There are strong arguments that we should vote but they are usually routine matters and life gets in the way. But this time it’s different and it’s crucial that you vote.
“This month Ian Cowie our investment expert is taking a look at Trump’s plans as his inauguration on 20 January approaches.”
This month Ian Cowie our investment expert is taking a look at Trump’s plans as his inauguration on 20 January approaches. As usual, Trump has been outrageous – threatening tariffs against Canada and Denmark in a bid to grab Greenland, and let’s not mention the Panama Canal. Ian reminds us that US indices soared on election day. Bargain hunters may be interested in the North America sector where the average discount is 21% despite returns over the last decade, five years and one year periods of 170%, 142% and 22% respectively.
Ian holds Polar Capital Technology for its exposure to the US tech giants and Worldwide Healthcare which has 70% of its assets in the US. He also holds Edinburgh Worldwide – one of Saba’s targets, where 73% of assets are in the US, including 12.3% in Space X – my internet provider in the wilds of Oxfordshire. And Ian has strong views on Saba's proposals: “this small shareholder hopes Edinburgh Worldwide survives a speculative approach from an American hedge fund and is allowed to continue serving long-term investors, rather than short-term speculators.”
And finally some fun for January – our first ever fantasy fund manager competition is up and running. We have invited some of the country’s leading investment journalists for a friendly game of investment trust stock picking, to see who ends up with the year’s best-performing portfolio of investment trusts. Let’s see if you can beat them!
“We have invited some of the country’s leading investment journalists for a friendly game of investment trust stock picking, to see who ends up with the year’s best-performing portfolio of investment trusts. Let’s see if you can beat them!”
Hope your January is going better than mine – it’s pretty full on here. We’ve had some snow but it melted immediately much to the boys’ disgust – no snow day!
Kind regards
Annabel Brodie-SmithCommunications Director, AIC
