By Annabel Brodie-Smith
So we have moved to the barn. 12 April was move day and we woke up to see heavy snow falling. Luckily the snow soon stopped, then melted and we got on with moving. I had forgotten how much hassle moving is – it’s been the usual chaos of not being able to find anything… But we love the rural location and the views of the countryside - I wake up to see sheep grazing. The high ceilings and big windows letting in lots of light are a huge contrast to a basement flat in central London.
Have you been out to a pub, restaurant or café yet? This month our UK managers are looking at the hospitality and leisure stocks that could benefit from the UK coming out of lockdown. They are optimistic, with Neil Hermon, manager of The Henderson Smaller Companies Investment Trust, saying: “With household savings at record levels, a highly successful vaccination programme, consumers keen to enjoy the level of social contact that they had pre-COVID and the likelihood of a staycation summer, we expect trade to bounce back strongly on reopening.” We went for a lovely lunch at a local pub but roll on 17 May so we no longer have to shiver outside. On to another post-lockdown conundrum – warehouses versus offices. You might know that warehouses have soared over the last year with the AIC’s newly created Property – UK Logistics sector (warehouses and distribution centres) up 56% versus 22% for the Property – UK Commercial sector. But will the rise of warehouses continue and what’s the future for the office? We’ve also asked investment company managers in the property sectors for their views on the suspensions of open-ended property funds, as the FCA considers further regulation in this area. They are certainly not mincing their words, with Custodian REIT’s manager Richard Shepherd-Cross saying: “Surely, retail investors will have had their fingers burnt once too often from investing in open-ended property funds. The liquidity promise cannot be met, income returns are not competitive and long-term returns have tended to fall short.” After last year we’re all aware of the environmental benefits of cutting pollution and reducing carbon emissions. This month, Ian Cowie has delved into the AIC’s Renewable Energy Infrastructure sector. With Biden bringing the US back into the Paris Agreement and even China’s leader Xi Jinping and Russia’s president Vladimir Putin expressing concern about carbon emissions, investing in green energy is top of the political agenda. Ian makes a compelling argument that it should be at the top of individual investors’ agendas too: “Now is the time to notice which way the wind is blowing and invest for a cleaner, greener tomorrow.” The company structure offers many benefits for investment company shareholders but do you know what a continuation vote is? Experienced journalist Kyle Caldwell explains how continuation votes can be helpful for shareholders and “keep an investment trust’s board on its toes”. This is because “shareholders can come together and demand a vote on whether the trust should be wound up at any time if they are unhappy with the way it is being managed.” Talking of benefitting shareholders, we have been lobbying for the removal of stamp duty as part of the Treasury’s review of the UK funds regime. Since 2014, most purchases of open-ended funds have been exempt from stamp duty yet investors who purchase most investment companies pay stamp duty at 0.5% on the purchase of their shares. Investment companies already pay stamp duty when they buy their investments so it’s double taxation when investors pay stamp duty on the purchase of investment company shares as well. We think it’s time for a fair tax regime for investors which does not discriminate against investment companies.
Finally, one of the benefits of investing in investment companies is that shareholders have a chance to get their voice heard. They can vote at annual general meetings (AGMs) on topics such as investment strategy and board and management changes. ShareSoc are running a webinar next week for investors to educate them on how to vote their shares. You can find more information and book here. I hope you all enjoy more freedom over the next month, with more seeing friends and family and less shivering outside!
Annabel Brodie-Smith Communications Director, AIC
