It’s not something that every adviser is keen to admit, but 18 months after RDR there are still a few nagging
doubts in the average breast about the actual mechanics and principles of investment trusts. (Or investment companies, as they’re correctly known, now that so many ITs are listed on the AIM market rather than the main market.) But hey, relax, you’re among friends here. We understand these things.
A Grand Day Out
If there were any embarrassing little gaps in the adviser’s knowledge base that some of us weren’t too keen to admit to, the AIC roadshow at the luxury Tortworth Court Hotel near Bristol on 20th June should have dispensed with them painlessly, and in great style. (For more details of forthcoming events, see below.) The great Victorian country house hotel, built on the site of a historic house that goes all the way back to Edward I, proved to be a perfect venue for an exposition of everything from the closed-ended principle to discounts and premiums, and then on to the new-fangled share buybacks that many investment companies are now using to control volatility.
More importantly, we learned about the special advantages of ITs in certain situations – especially in emerging markets and smaller companies, where it can get downright expensive for a manager to keep on making buys and sells in what might be an illiquid market. There’s a “commit and hang on tight” element to some investment funds that has proved highly profitable in the medium term – and, as we were told, ITs have been outperforming open-ended funds quite decisively in the last three or four years.
Take It From The Top
Jacqueline Lockie, AIC’s head of training, and James Burns, head of multi manager at Smith and Williamson, were on hand to take us through the guiding principles of the IT market and the various ways that investment companies could enhance a client’s portfolio.
Meanwhile, for an exposition of the extreme end of investment company management, we got a rare audience with the inimitable Nick Train, the hugely successful manager behind the Finsbury Growth and Income Trust and the Lindsell Train UK Equity IT which has scored a 190% capital gain since its launch in July 2006. (To say nothing of a quite extraordinary yield performance.)
There’s something endearingly modest about Lindsell Train’s stated objective: “To invest primarily in UK company shares to achieve capital and income growth and provide a total return in excess of that of the FTSE All-Share Index.” In fact, as we learned, the objective is to go out-and-out for the multi-bagger, of which Mr Train has accumulated almost an embarrassingly large number. As an example of what can be done with a truly committed, hands-on active management, it was unbeatable.
See for yourself
But don’t take our word for it. You can see the AIC’s own video of the event at http://halofilms.co.uk/project/aic-advisers-seminar/ , filmed by the estimable Halo Films.
Future AIC Events
|12 September||Newcastle||Newcastle Marriott Hotel, High Gosforth Park, Newcastle-upon-Tyne, NE3 5HN|
|26 September||Edinburgh||The Scotsman, 20 North Bridge, Edinburgh, EH1 1TR|
|23 October||London (Mayfair)||The Mayfair Hotel, Stratton Street, London, W1J 8LT|
|21 November||Birmingham||Hyatt Regency Birmingham, 2 Bridge Street, Birmingham, B1 2JZ|
Finally, many thanks also to Halo Films, who can be contacted at any time on www.halofilms.co.uk