Now that the market has recovered from last spring’s panic attack, some interesting new investment trusts and exchange-traded funds (ETFs) have emerged. Starting with the former category, there are two welcome recent additions.
The first is the Triple Point Energy Efficiency Infrastructure Company (LSE: TEEC) trust, which has raised £100m and will invest in a diversified portfolio of energy-efficiency assets focusing on low carbon heat distribution, social housing retrofitting, industrial energy-efficiency and distributed generation (denoting technologies that generate electricity where it will be used, such as solar panels). The fund is targeting a total return of 7%-8% per annum with a target yearly dividend yield of 5.5%.
Building on infrastructure
The energy- efficiency market is essentially an extension of the existing infrastructure market, which includes the SDCL Energy Efficiency Trust (LSE: SEIT). It’s good news for income-hungry cautious investors. You get a solid range of income-producing assets based around some form of infrastructure. These assets are also, hopefully, helping make the planet a cleaner, greener place. Moreover, these underlying assets shouldn’t be too correlated to the wider economic cycle.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
SEIT has grown rapidly in recent years and now trades at a chunky premium to net asset value (NAV). I would expect the same to happen with the Triple Point fund. The managers are well regarded and have established a decent record in this sector over the past decade.
Another new fund is Home Reit (LSE: HOME), a real-estate investment trust that raised £240m in early October to put towards homes for the homeless. The Reit will be managed by Alvarium Fund Managers, a specialist in this area.
According to the manager, the “accommodation assets will be let or pre-let on very long (typically 20 to 30-year) inflation-linked leases to registered charities, housing associations, community interest companies and other regulated organisations [with] a proven operating track record in providing low-cost accommodation to the homeless, and which receive housing benefit or comparable support from local or central government [to that end].”
There is an explicit income target, in this case 5.5p per ordinary share, starting from 1 September 2021, “with the potential to grow through upward-only inflation-protected long-term lease agreements”. I think this fund will prove very popular and trade at a large premium to NAV too.
Investors should also keep an eye out for the November listing of the Round Hill Music Royalty Fund. We already have a highly successful music-royalties fund, London-listed Hipgnosis. Round Hill will provide some stiff competition as it has been operating in this market since 2010 and is in effect the seventh-largest music publishing business in the US. It has a phenomenal pipeline of 40 portfolios and is looking to raise over $350m.
Some interesting new ETFs have emerged recently too. Perhaps the most important comes from BlackRock iShares, which has just launched three multi-asset environmental, social and governance (ESG) ETF portfolios. They boast low total expense ratios (TERs) of 0.25%. One is the BlackRock ESG Multi-Asset Conservative Portfolio UCITS ETF (LSE: MACG). Then there is the BlackRock ESG Multi-Asset Moderate Portfolio UCITS ETF (LSE: MAMG) and the BlackRock ESG Multi-Asset Growth Portfolio UCITS ETF (LSE: MAGG).
The first ETF offers a more conservative approach, with the portfolio comprising 80% bonds and 20% stocks while MAGG is the most adventurous, with 25% bonds and 75% stocks.
Note that BlackRock is clearly committed to its ESG funds. Its boss Larry Fink has even taken to writing letters to investors and businesses demanding they take more action on issues such as climate change.
I also like the look of a new ETF currently only available in Paris and on Germany’s Xetra exchange. It should be accessible via most UK brokers. The BNP Paribas Easy ECPI Global ESG Blue Economy UCITS ETF (Paris: BLUE) consists of 50 large-caps participating in what’s called the “blue economy”, which comprises coastal livelihoods, energy and resources, fisheries and seafood, pollution reduction and maritime transport.
The final ETF worth bringing to your attention is the Bitcoin Capital Active ETP (Zurich: BTCA). It is an actively-managed fund run by a specialist firm called Ficas, led by founder Ali Mizani Oskui, who has been trading bitcoin and other cryptocurrencies since 2013. The fund can move in and out of 15 different digital currencies and can even invest in boring old fiat money if need be.
I think this is a very appealing idea if you don’t feel very clued up on digital money. If we do go ever further down the path towards vast monetary expansion, alternatives to gold might become popular but the trick will be working out which digital currency makes most sense. This ETF isn’t listed yet in the UK but you should be able to access the Swiss exchange via most brokers.
David Stevenson has been writing the Financial Times Adventurous Investor column for nearly 15 years and is also a regular columnist for Citywire.
He writes his own widely read Adventurous Investor SubStack newsletter at davidstevenson.substack.com
David has also had a successful career as a media entrepreneur setting up the big European fintech news and event outfit www.altfi.com as well as www.etfstream.com in the asset management space.
Before that, he was a founding partner in the Rocket Science Group, a successful corporate comms business.
David has also written a number of books on investing, funds, ETFs, and stock picking and is currently a non-executive director on a number of stockmarket-listed funds including Gresham House Energy Storage and the Aurora Investment Trust.
In what remains of his spare time he is a presiding justice on the Southampton magistrates bench.
Equity release rates drop – is it worth unlocking cash from your home?
News Lifetime mortgage rates are falling from their record highs - is equity release worth another look?
By Marc Shoffman Published
Hargreaves Lansdown launches fixed-term cash ISA product
savings/hargreaves-lansdown-fixed-cash-isa-launch Investment platform Hargreaves Lansdown is to offer fixed term cash ISAs via its Active Savings platform paying 4.8%, tax free - but is it any good?
By Kalpana Fitzpatrick 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
Time to invest in the next agricultural revolution
As the global demand for food increases, food producers are seeking to lower their carbon emissions. Technology will help meet both goals.
By Dr Matthew Partridge Published
Asia’s hidden gems: Three undervalued Asian stocks
Personal View Fidelity's Nitin Bajaj highlights three favourite Asian stocks.
By Nitin Bajaj Published
Uber's switch to profitability is an opportunity for investors
The ride-hailing platform has just reported its first operating profit and its future looks bright.
By Stephen Connolly Published
The bond bust bodes well for equities
Rising yields on government debt herald the end of the free-money era and good news for investors.
By Max King Published