It has been a little over six months since I told you that I would review our investment-trust portfolio every six months. Sorry about that. The good news, however, is that, while I have been ignoring it, it has done just fine.
On average, the six trusts have returned about 7.8% since we suggested them in June. You won't have done quite that well, of course (thanks to transaction fees and stamp duty), but I don't suppose you will be complaining too much particularly as that doesn't include dividends.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
The top performers (see below) were Scottish Mortgage and Finsbury Growth both up over 20% and the worst RIT Capital and 3I Infrastructure.
So what next? Not much. Personal Assets has a clear remit: to "protect and grow" your capital in that order. It has done that and we have no complaint at all about its management. It holds all the things we like including a load of gold (13% of the portfolio) and the good-quality equities we tip endlessly. It stays.
RIT is more complicated. Since we first wrote about this in June, the old chief investment officer, Micky Breuer-Weil, who had been in the position for 18 years, has stepped down. The new one, Ron Tabbouche, is untested in this kind of position. That makes me nervous (his experience is in long-only equities rather than the private equity and so on that RIT is known for).
It makes our advisory panel nervous too. The fund has, says Alan Brierley of Canaccord Genuity, become a "bit of an enigma" and there are "a lot of questions about the underlying fundamentals". That said, neither he nor Winterflood's Simon Elliot would sell it: it has preserved capital in the last few months, "which is its primary focus", and it is, as we all know, rarely a good idea to sell funds after a period of underperformance. But Sandy Cross of Rossie House would like to sell it.
Other proposed changes? Alan thinks it might be an idea to sell a bit of Finsbury a 20% gain in a "world of low numbers shouldn't be sniffed at". He doesn't much like 3i either having a management "who seem to be scared of making new investments" adds too much risk. Hmmm.
So if we did take anything out, what would we put in? Alan would dump 3i for HICL Infrastructure. Sandy suggests the Henderson Smaller Companies Investment Trust on the basis that growth will be hard to come by this year, but it has a manager who "has a good record of choosing companies which can generate decent growth".
And everyone is keen on a bit more private equity, which is, says Alan, "the cheapest sector and the greatest opportunity". Which funds? Pantheon, NB Private Equity, HarbourVest or Standard Life European Private Equity, says Alan. Electra Private Equity or Standard Life, says Simon.
You will be pleased to hear that I have listened carefully to all this advice and decided to do nothing. I am mildly concerned about 3i (Alan makes good points on this), so will be keeping an eye on it. We might chuck it next time we review. However, the one I am really concerned about is RIT, simply because the management structure isn't what it once was.
I'm keeping it for now because the markets have had a good run (hence the 20% returns from our two best performers!) and if that turns we will be protected to a degree by our holding in RIT. But it might not make the cut when we come back to this in June.
You might remember from the creation of the original portfolio that one of my worst fears is to be thought dull. And this lack of change is, of course, very dull indeed. However, this is supposed to be a core long-term portfolio, so please supplement it as you see fit if you have no exposure to Japan you might consider the Baillie Gifford Japan Trust (LSE: BGFD). I'm thinking of adding the Henderson fund (LSE: HSL) suggested by Sandy and the Standard Life (LSE: SEP) fund so loved by Simon and Alan to my own self-invested personal pension (Sipp).
Our favourite investment trusts
Swipe to scroll horizontally
BH Macro
LSE: BHMG
2,011
1,945
3.4%
Personal Assets
LSE: PNL
34,260
34,090
0.5%
Scottish Mortgage
LSE: SMT
783
642.5
21.9%
Finsbury Growth
LSE: FGT
401
330
21.5%
RIT Capital
LSE: RCP
1,132
1,135
-0.3%
3i Infrastructure
LSE: 3IN
122.6
123
-0.3%
Swipe to scroll horizontally
BH Macro
2,080
1,942
7.1%
-3.4%
0.2%
n/a
Personal Assets
34,200
33,675
1.6%
0.2%
1.2%
1.6%
Scottish Mortgage
855.4
693.4
23.4%
-8.4%
-7.3%
1.7%
Finsbury Growth
398.8
328.2
21.5%
0.9%
0.5%
2.4%
RIT Capital
1,180
1,211
-2.6%
-3.9%
-6.3%
2.5%
3i Infrastructure
121
119
1.7%
1.2%
3.4%
4.8%
Sign up for MoneyWeek's newsletters
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).
After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times
Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast - but still writes for Moneyweek monthly.
Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.
Will “Liberation Day” strike again?
Israel claims victory in the '12-day war' with Iran
