In terms of assets held, investment style or structure, "investment trusts work best when they provide investors with something they can't readily access elsewhere", says Simon Elliott of Wins Investment Trusts. He believes Ecofin Water & Power Opportunities (LSE:ECWO) fits the bill on all three counts.
Run by Bernard Lambilliotte, the firm invests globally in water, electric power and gas distribution businesses, which are as close to recession-proof as you can get. But what's really exciting Ecofin Fund Management which, with $4.5bn in its portfolios, is one of the largest specialist utility players is a coming sea change. Ecofin believes the world is in the early stages of a boom in spending on electricity and gas infrastructure that could reverse years of underinvestment as demand for power soars. All of which should mean high energy prices and healthy earnings growth for the sector.
At the current price of 174p, ordinary shares in ECWO yield 2.9% and trade at a discount to net asset value of 11.5%. Gearing is 27.4%. The portfolio is invested roughly 50% in Britain and Europe, and 27% in America. The managers are looking to raise exposure to the Brazil, Russia, India and China, although they are well aware of the higher regulatory risks this could entail. The fund has returned some 93% in the last three years, against an 18% return from the FTSE All-Share index over the same period. If that global infrastructure view comes good, the next three years should be pretty rosy too.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Contact: 020-7451 2929
Ecofin Water & Power Opportunities top ten holdings
Name of holding - % of assets
Electric Power Development - 6.0%
ITC Holdings Corp - 5.8%
FPL Group - 3.9%
EDF - 3.8%
Poweo - 3.8%
Distrigaz - 3.4%
Suez - 3.3%
Exelon - 3.1%
Iberdrola Renovables - 3.0%
British Energy - 3.0%
-
What happens if you can’t pay your tax bill, and what is "Time to Pay"?Millions are due to file their tax return this Friday as the self-assessment deadline closes. Though the nightmare is not over until you pay the taxman what you owe - or face a penalty. But what happens if you can't afford to pay HMRC your tax bill, and what is "Time to Pay"?
-
What does Rachel Reeves’s plan for growth mean for UK investors?Rachel Reeves says she is going “further and faster” to kickstart the UK economy, but investors are unlikely to be persuaded
