A three-for-one value opportunity for compelling sectors
This trust invests in compelling sectors that all look attractively priced.


The AVI Global Trust (LSE: AGT) offers investors access to three opportunities at once. The first is family-controlled holding companies. Shares of companies with high ownership by founding families outperform. A recent report by fund managers Pictet found that those with family ownership above 30% outperformed the global market by 46% between 2007 and 2019.
The direct link between ownership and management acts as a powerful incentive to focus on long-term value accretion rather than the short-term dash for glory favoured by all too many hired-hand chief executives.
A new bull market
Then there is Japan. Charles Gave, chairman of Gavekal, the investment research group, points out that “a new bull market in non-financial Japanese equities began sometime between 2012 and 2016, and it probably has a lot further to run. The profits of Japanese companies are in a structural uptrend, Japanese companies have positive cash flow and the amount of cash on their books is close to the market capitalisation of the entire Topix index.”
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
Thirdly, note that despite an average discount to net asset value (NAV) of 6% among investment trusts, several still trade on wide discounts despite strong performance records, usually because they don’t fit neatly into conventional investment categories. Eventually, performance should trump the doubts and the discounts then disappear, boosting returns for those prepared to buy early.
AGT spreads its bets between all three areas: 38% of net assets is invested in family-controlled holding companies, 39% in closed-end funds and 33% in Japan, with the 10% overinvestment financed by borrowings. The connection between the three is value; the family-controlled companies trade at large discounts to the sum of their parts, the closed-end funds trade at discounts and the Japanese companies have significant surplus assets. So enthused is Joe Bauernfreund, manager of AGT, about the last that last year he launched a £120m investment trust, AVI Japan Opportunity (AJOT), focused on smaller companies.
In the Japanese small-cap portfolio, “50% of the market value is accounted for by surplus net cash, rising to 94% if listed securities are included”, says Bauernfreund. “This [leaves] the underlying businesses trading on less than three times earnings. These are high-quality businesses with growing earnings and a return on equity of 18%, double that of Japanese smaller companies in general.”
Finding undervalued assets
Both in Japan and generally, Bauernfreund’s strategy is “patient, constructive, behind-the-scenes engagement in companies with undervalued assets”. This does not preclude going public, as AGT did with Fujitec, circulating research detailing “operational and strategic inefficiencies as well as a cumbersome balance sheet and corporate governance issues”. Fujitec was one of the leading contributors to performance in June.
The closed-end holdings include Pershing Square, on a discount of over 30% despite returning 32% in the first half, and private-equity group Oakley Capital. It is on a 37% discount to conservatively valued assets despite plenty of net cash and a return of 4% in the first half.
In the family-controlled section of the portfolio are Investor, the holding company of the Wallenberg family; Christian Dior, controlled by LVMH’s boss Bernard Arnault; Exor, controlled by the Agnelli family; and Godrej Industries, the holding company for three listed Indian firms of which the consumer products one is “the jewel in the crown”. AGT trades at an 11% discount to NAV, which should narrow as the investee businesses perform and their discounts diminish. This makes AGT an excellent counterbalance to the growth-orientated trusts that dominate the performance tables.

Max has an Economics degree from the University of Cambridge and is a chartered accountant. He worked at Investec Asset Management for 12 years, managing multi-asset funds investing in internally and externally managed funds, including investment trusts. This included a fund of investment trusts which grew to £120m+. Max has managed ten investment trusts (winning many awards) and sat on the boards of three trusts – two directorships are still active.
After 39 years in financial services, including 30 as a professional fund manager, Max took semi-retirement in 2017. Max has been a MoneyWeek columnist since 2016 writing about investment funds and more generally on markets online, plus occasional opinion pieces. He also writes for the Investment Trust Handbook each year and has contributed to The Daily Telegraph and other publications. See here for details of current investments held by Max.
-
Lloyds, Halifax and Bank of Scotland to shut another 45 branches
Lloyds Banking Group, which includes Halifax and Bank of Scotland, is set to close a further 45 branches in 2024 - find out if a branch near you is closing.
By Vaishali Varu Published
-
US stock trading app Robinhood launches in the UK
The low-cost trading platform has opened another waiting list for British investors - following two failed attempts to launch in this country - and is hoping to be fully operational next year.
By Ruth Emery Published
-
M&S shares shift from frumpy to fabulous as pre-tax profits are up by 56%
M&S is performing strongly and has announced it will pay a dividend for the first time since the pandemic.
By Dr Matthew Partridge Published
-
The rise and fall of Sam Bankman-Fried – the “boy wonder of crypto”
Why the fate of Sam Bankman-Fried reminds us to be wary of digital tokens and unregulated financial intermediaries.
By Jane Lewis Published
-
Three defence stocks set to flourish in an era of instability
A professional investor tells MoneyWeek where he’d put his money. Tom Bailey highlights three defence stocks that look promising.
By Tom Bailey Published
-
EasyJet shares are volatile but enticingly cheap
The EasyJet group has shrugged off the cost-of-living crisis, restarted dividends and shares look good value.
By Dr Matthew Partridge Published
-
The fallout from the war on landlords
Investors fleeing the market and the rise in rents are affecting us all.
By Charlie Ellingworth Published
-
Eight small-cap trusts to bet on
Funds investing in market minnows are out of favour, but the cycle will turn. Here are the best bets.
By Max King Published
-
Trust in US TIPS to beat inflation
In an inflationary market TIPS, the US Treasury Inflation-Protected Securities are most compelling says Cris Sholto Heaton.
By Cris Sholto Heaton Published
-
What is Vix – the fear index?
What is Vix? We explain how the fear index could guide your investment decisions.
By Dr Matthew Partridge Published