PENSION
STRATEGIC EQUITY CAPITAL
The spectacular long-term returns of this trust have led experts to continue to tip it,
despite the fact it is trading on a hefty premium
trustnet.com
Widdowson chooses value
stocks that he believes can
provide high levels of growth
through a change in management,
strategy or the way in which they
operate. As a result, investors
should expect periods of volatility.
However, investors should
not dwell upon this too much if
they hold this trust in the growth
stages of their pension, when they
should be taking a longer term
view.
The trust is currently trading
on a 9.1 per cent premium, which
is likely to deter many investors.
While this may seem hefty,
Winterflood’s Simon Elliott told
FE Trustnet that, in many cases,
investors with a longer-term view
should not rule out buying trusts
just because they are trading
above their net asset value.
“Would we recommend an
investment trust trading on a
premium? We absolutely would
– if we thought the manager in
the investment case was strong,
we would recommend trusts on
premiums,” he said.
Strategic Equity Capital has
a clean ongoing charges figure
(OCF) of 1.33 per cent and yields
0.3 per cent. At present, GVO
Investment Management operates
a “no gearing” policy.
MANAGER: Stuart Widdowson
PREMIUM/DISCOUNT: +9.1%
LAUNCH DATE: 19/07/2005
OCF: 1.33%
CROWN RATING:
PERFORMANCE OF TRUST VS SECTOR
AND INDEX OVER MANAGER TENURE
600%
IT UK Smaller Companies (199.30%)
500%
Strategic Equity Capital (566.95%)
400%
FTSE Small Cap (ex IT) (164.14%)
300%
200%
100%
0%
Mar 15
Nov
Jul
Mar 14
Nov
Jul
Mar 13
Jul
Nov
Mar 12
Nov
Jul
Mar 11
Nov
Jul
Mar 10
Nov
-100%
Jul 09
T
he £140.6m Strategic
Equity Capital trust, which
is run by GVO Investment
Management, has managed to
remain under the radar of most
investors despite its stellar and
consistent performance since
launch.
Although it has achieved topdecile returns over one, three and
five years, it is its performance
record under the whole tenure of
Stuart Widdowson that is most
remarkable.
The five crown-rated trust has
returned 566.95 per cent since
the manager took charge in 2009,
compared with gains of 199.3
per cent from its IT UK Smaller
Companies sector and 164.14 per
cent from its FTSE Small Cap (ex IT)
index benchmark.
Over five years the trust boasts
a top-decile Alpha ratio, which
measures returns above that of its
benchmark, and a top-decile Sharpe
ratio, which measures risk-adjusted
performance.
However, investors in this trust
need to have an enormous amount
of faith in the high-conviction
investment process of Widdowson
and co-manager Jeff Harris, who
joined him last year.
The trust’s top-10 holdings make
up more than 70 per cent of the
entire 19-stock portfolio. Technology
group Servelec, which holds
significant intellectual property, and
E2V Technologies, which makes
image sensors, each account for
more than 10 per cent of the trust’s
assets under management.
Source: FE Analytics
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