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Markuz Jaffe,
Cantor Fitzgerald
Investment companies analyst
Markuz Jaffe has also gone
for a trust with a focus on
sustainability.
“In the face of climate change, the
increasing global uptake of renewable
energy generation has seen plenty
of capital raised for renewable
infrastructure funds, with all of those
listed on the UK market sustaining
healthy share price ratings,” he says.
“These include my previous picks
NextEnergy Solar and Greencoat UK
Wind.”
Jaffe’s selection for the year ahead is
another infrastructure trust: Gresham
House Energy Storage, which
generates revenues from the intra-
day volatility of UK power prices and
providing services to National Grid.
“The strategy stands to benefit from
the trends of increased electrification
– notably transport – and further
deployment of renewable energy
generation, notably offshore wind in
the UK,” the analyst explains.
“It targets a 7p dividend yield
(approximately 6.7 per cent on its
current price) and trades on a smaller
premium rating compared with
the renewable generation funds,
which could positively re-rate as the
dividend increases at the end of the
current financial year.”
Jaffe says another theme UK
investors may wish to consider
playing is the Brexit saga, which has
seen domestically orientated UK
stocks out of favour for an extended
period, particularly small caps. The
analyst says “although this may feel
like ‘Groundhog Day’, positive results
in the Brexit negotiations could see
a surge of renewed interest in UK
small caps”.
“A fund such as River & Mercantile
UK Micro Cap offers investors
exposure to a carefully selected
portfolio of UK micro caps and itself
trades on a 17 per cent discount to net
asset value, creating the opportunity
for a double re-rating,” he adds.
trustnet.com