The Lemon Fool

Trust of trusts.

Average 28% discount in the underlying holdings off the last annual report.

Trust itself on a 5% or so discount.

Nick Greenwood seems to have a decent reputation.

Performance looks to be erratic?

Interested in any thoughts for a 7% or so holding.

I see MIGO is in the Flexible (multi-asset ) sector. It fell a lot in the Covid falls earlier this year. It pays no dividend yield and is at a discount of c -4.00%.

In terms of capital performance it is below the middle of the pack, being: 16/19 over 1 year, 15/19 over 3 years, and 9/16 over 5 years (Per Citywire, link below). It holds: equity, property, private equity and mining.

It is a small trust at c £66m. OCR: 1.34% or according to the KID: 1.52%

https://citywire.co.uk/wealth_manager/i ... Period:12;

https://www.hl.co.uk/shares/shares-sear ... plc-ord-1p

Have to say to me the charges look high and the underlying holdings a bit motley .
If you think the value style investing is going to have a future AVI global may be worth a look.
It's underperformed recently but has a decent long term record at doing this stuff, pays a dividend, is on a bigger discount and has lower charges.
Used to be called British Empire trust.
I have a small holding and am thinking of increasing it.

Nick Geenwood, the manager, talks the talk and over the years has allways been an affable host to a coterie of financial journalists looking for a quick quote. And I'm not immune to having looked to his annual report commentaries for ideas for deeply discounted IT shares.
The problem is that the trust has been and remains sub-scale. The next continuation vote is in 2021 and one wonders if Greenwood's baby will survive that vote or more still his retirement which can't be that many years away.
At the current discount liquidation or merger doesn't offer any short term gains to investors and as sugested above AGT looks the more robust long term purchase in this area.

Thanks both some very good comments.

I've been impressed listening to Nick Greenwood but I do wonder with any trust run by an "older" manager about the roadmap especially with smaller trusts.

The real point of my question was more around where people see these sort of "value" oriented trust of trust offerings as fitting in in the current and (best guess) future financial climate?

I have around 85% of my holdings split right now between Capital Gearing and Personal Assets and I tend to see CGT as a best on a team trying to identify good and perhaps undervalued investments whilst I see PNL as almost a "Fundsmith light" in the sort of businesses it invests in for its equity allocation.

My only two other holdings are Scottish American and Mid Wynd which make up the remaining 15% or so and are again roughly equal splits.

The investment pot is around £205K with new money going in each month.

I tend to avoid trust of trusts as I don't really like paying two lots of management fees.
Having said that I do think AVI Global is worth a look, most of their holdings are of holding companies rather than IT's and Value has had a prolonged period of underperformance and have been knocked further and recovered less than Growth in this year.
Not saying I'm great at calling markets but think Value is looking a bit more compelling just now.

Backache wrote:I tend to avoid trust of trusts as I don't really like paying two lots of management fees.
Having said that I do think AVI Global is worth a look, most of their holdings are of holding companies rather than IT's and Value has had a prolonged period of underperformance and have been knocked further and recovered less than Growth in this year.
Not saying I'm great at calling markets but think Value is looking a bit more compelling just now.

What I struggle with is I can see arguments for "value" like AVI or MIGO but I can also see the NASDAQ on a complete tear.

Something's weird when you're literally debating value trusts and a cheap dumb NASDAQ tracker like EQQQ.

Aminatidi wrote:

Backache wrote:I tend to avoid trust of trusts as I don't really like paying two lots of management fees.
Having said that I do think AVI Global is worth a look, most of their holdings are of holding companies rather than IT's and Value has had a prolonged period of underperformance and have been knocked further and recovered less than Growth in this year.
Not saying I'm great at calling markets but think Value is looking a bit more compelling just now.

What I struggle with is I can see arguments for "value" like AVI or MIGO but I can also see the NASDAQ on a complete tear.

Something's weird when you're literally debating value trusts and a cheap dumb NASDAQ tracker like EQQQ.

I have purchased MIGO over the last month or so after hearing the with Nick Greenwood. It is my smallest holding at 1% with PNL being the largest at 30%, CGT at 15% and 18 others in between. I looked at some of the individual holdings within MIGO and thought the majority were interesting and had some value.

I've held it for a while now, in theory it is interesting diversification (the practice may not be that much different to the wider market that said) but my purchase was on two factors:

1. It is a fund of funds which risks costs issues but which sensibly focusses on buying other IT's that have themselves good discounts to NAV and growth potential, so it exercises a leveraged value strategy if you like.

2. It often buys smaler IT's that are not easily obtainable to individual UK investors.

It did very well the other year with one of its largest IT's that wound up (who's name escapes me) that had done extremely well in the East Berlin rental/renovaton market, but when you look at the current holdings (as I did again recently for a top up) it has held some sensible unloved (until recently) funds like Baker Steel that again should see it right if the gold boom lasts (which looks likely).

I wondered if anyone has any thoughts on this trust (MIGO) going forward.

It's a fund of funds, the remit being to invest in other ITs in order to take advantage of discounts.

I feel like it could be an interesting opportunity, given the current level of IT discounts. Only a small trust though, at £77m, which is usually a bit of a red flag.

From tomorrow, Asset Value Investors (AVI) take over as manager. They have done well for me personally over the last 10/15 years as managers of AVI Global (formerly British Empire).