The MIGO Opportunities Trust, previously known as Miton Global Opportunities, seeks to exploit mispricings in the investment-trust sector. Trusts’ share prices trade at the balance of supply and demand in the open market – this can differ dramatically from the value of the underlying portfolio.
We seek out investment trusts trading at a discount to the value of their underlying investments – or net asset value, NAV – and offering a catalyst for both a rerating in the share price and an appreciation in the portfolio. This “double whammy” can produce attractive returns, especially when a particular asset class returns from a period of being out of favour.
The new China
Covid-19 will be with us for a long time, so we’re looking for trusts that benefit from some of the trends accelerated by the pandemic. Vietnam is profiting as firms diversify manufacturing and supply chains away from China. The trend has brought about increased urbanisation and a growing middle class in Vietnam; an extensive infrastructure plan by the government should stimulate further growth.
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
We hold the Vinacapital Vietnam Opportunity Fund (LSE: VOF) and Vietnam Enterprise Investments (LSE: VEIL), both of which have excellent management teams and complement each other, with the former’s focus on private equity and the latter’s on public markets. These trusts trade on very wide discounts, a legacy of oversupply given the vast sums raised by Vietnamese funds in the noughties. We expect demand to rise as the positive view about Vietnam gains greater acceptance, while both trusts are shrinking supply through share buybacks.
A cheap inflation hedge
The Baker Steel Resources Trust (LSE: BSRT), which develops mining projects, is on a double-digit discount to NAV. It controls several interesting projects that could be ripe for selling or listing. One recent flotation, a tungsten mine in Devon, gave the trust’s valuation a welcome fillip. It has struggled to monetise its holdings during the pandemic: due diligence has been difficult for geologists owing to travel restrictions.
The trust focuses on metals that will be used in the electrification of the global economy. Moreover, it consists of a portfolio of real assets, which should temper concern over inflation. For now, mining finance remains heavily out of favour as the Chinese economy slows.
Georgia on our minds
We seek out unloved and overlooked situations where an investment has fallen below the radar. One such example is Georgia Capital (LSE: CGEO), which focuses on the Eastern European country. Its shares currently trade at around half of the latest valuation of its underlying portfolio.
This seems to be due to complete lack of interest at a time when many frontier-market specialist finds are shutting their doors. As a result, there seems to have been constant selling of Georgia Capital’s shares over the past few mo
-
Number of high-earning women jumps 12% – how to convert income into pensionsMore women than ever are paying the highest rate of tax as record numbers succeed in high paying professional roles. But their pension saving still needs to catch up
-
Yoshiaki Murakami: Japan’s original corporate raiderThe originator of Japanese activism, Yoshiaki Murakami, was disgraced by an insider-trading scandal in 2006. Now, he's back, shaking things up
-
Yoshiaki Murakami: Japan’s original corporate raider
The originator of Japanese activism, Yoshiaki Murakami, was disgraced by an insider-trading scandal in 2006. Now, he's back, shaking things up
-
Cash in on the vast growth potential of the companies electrifying the worldOpinion Martin Todd, portfolio manager, head of sustainable equities, Federated Hermes, highlights three electrification companies where he'd put his money
-
Galliford Try has firm foundations for strong growthBuilder Galliford Try has a finger in a wide range of pies, notably important work in the public sector
-
Card Factory is a stand-out small-cap going cheapIn a digital world, we still value the personal touch. That’s good news for Card Factory, whose unique business model is suited to weather all economic storms
-
8 of the best smallholdings for sale nowThe best smallholdings for sale – from a medieval cross-passage farmhouse in Taunton, Somerset, to a former farmhouse with an orchard in the Welsh Marches
-
How much gold does China have – and how to cash inChina's gold reserves are vastly understated, says Dominic Frisby. So hold gold, overbought or not
-
How to invest in undervalued gold minersThe surge in gold and other precious metals has transformed the economics of the companies that mine them. Investors should cash in, says Rupert Hargreaves
-
Debasing Wall Street's new debasement trade ideaThe debasement trade is a catchy and plausible idea, but there’s no sign that markets are alarmed, says Cris Sholto Heaton
