/ MULTI-MANAGER TRUSTS /
SECOND-GUESSING
Nick Greenwood, whose Miton
Global Opportunities trust of
investment trusts has more of a
value focus, notes net asset value
(NAV) is more “subjective” than in
an open-ended fund.
“We are different from an open-
ended equity fund because we
recognise the value now and do
not try to second-guess what might
happen in the future,” he says.
The trust aims to extract value
from the discount opportunities
present due to the changing nature
of the audience. The traditional
buyer of an investment trust
used to be the old private client
stockbroker, which have – in many
cases – consolidated and grown
into huge chains. As such, their
size prevents them from investing
in smaller trusts.
10
The traditional buyer of an
investment trust used to be the old
private client stockbroker, which
have – in many cases – grown into
huge chains
Greenwood adds: “We have
a situation where the natural
buyer is gone but there are still
sufficient sellers to drive the share
price down and create a very large
discount, which is what we are
looking to exploit.”
It is difficult, then, to generalise
about multi-manager trusts. While
there are fewer of these vehicles
available in the closed-ended
space, there is a greater variety in
the ones to choose from. It is worth
remembering though that if you
buy a trust that specialises in a
certain area, you shouldn’t regard it
as a one-stop shop – no matter how
many underlying holdings it has.
PERFORMANCE OF TRUSTS OVER 10YRS
250%
200%
150%
Henderson Alternative Strategies Trust
(-30.25%)
Witan Investment Trust (197.04%)
Miton Global Opportunities (102.73%)
100%
50%
0%
-50%
-100%
overarching trust level if investors
think that the valuations of
the underlying assets are not
completely fresh and up to date.”
Witan is an example of a multi-
manager trust that appoints
segregated mandates to its
underlying investment managers.
Khalaf says this could bring costs
down as you aren’t buying a typical
fund with associated charges. The
negotiating power, however, will
come down to scale, so a smaller
multi-manager trust may lend itself
better to a mandated set-up.
Source: FE Analytics
trustnet.com