I initiated a new position in Henderson Land (ticker: 12 HK), the Hong Kong listed property and holding company, on 14 March at a price of HK$49.45. The shareholding represents around 3.5% of my portfolio. At the current price, the shares are trading at very attractive valuation, which represents a substantial discount to their NAV. I plan to write a detailed research post on the company in the near future.
I have initiated a new position in RENN Universal Growth Investment Trust (ticker: RUG) on 12 March at a share price of 238p. At the beginning of February, the board announced the planned winding-up of the trust. Despite this, the trust is trading at a large discount to its NAV of around 27%, although the high degree of uncertainty means that initially at least I have bought a relatively small shareholding. A detailed research post can be found here.
I have reduced my position in Caledonia Investments (ticker: CLDN), selling part of my shareholding on 12 March at a price of 1831p. The discount has decreased substantially over the last few months from over 30% at one point in the middle of last year to around 20% now.
I sold part of my shareholding in the subscription shares of Impax Asian Environmental Markets (ticker: IAES) on 12 March at a price of 6.2p. This was an opportunistic move: the share price had increased significantly on the day and at that level was close to my current valuation. I thought it would be a good time to reduce my exposure. My average purchase price had been 2.3p and, prior to the sale, the shareholding increased to over 2% of my portfolio, quite a large position given the inherent leverage in the shares.
I have been successfully following the Discount Investing strategy for over a decade now. However, it is only since 31 August last year that I have been systematically recording the performance of the portfolio. Since six months have now elapsed, I thought it would be a good time to give a brief update on the strategy’s recent performance. It has been a good few months for stockmarkets globally. The strategy has also performed very well, returning 23% in total over this period, compared with 17% for the FTSE All-World Total Return Index (in pounds sterling).
It now seems to be widely accepted that the returns retail investors actually receive from investing in funds is lower than the funds’ reported returns. This performance gap is blamed on investors’ return-chasing behaviour as a result of which they have a habit of switching funds at the wrong time. This is an important issue, given the amount invested globally in mutual funds. However, in my view, the performance gap is to a large degree, even if not entirely, an illusion.
I added to my position in AGIT on 25 February at a price of 117.3p, increasing the position size to 4.3% of my portfolio. The current discount to NAV is around 18%.
I sold part of my shareholding in Aberforth Smaller Companies Trust (ticker: ASL) on 21 February at a price of 794p. Following my recent purchase of a shareholding in Aberforth Geared Income Trust (AGIT), I had been looking to reduce my position in ASL.
Aberforth Geared Income Trust (ticker: AGIT) is a split capital investment trust, which invests in quoted UK smaller companies. The trust is managed by Aberforth Partners, the specialist UK smaller companies fund manager, which also manages the Aberforth Smaller Companies Trust (ASCoT), together with an equivalent open-ended fund.
I have initiated a position in the ordinary shares of Aberforth Geared Income Trust (ticker: AGIT), a split capital investment trust investing in the UK smaller companies sector. I bought the shareholding on 15 February at a price of 115.85p. The discount has widened in recent weeks to around 18%, significantly higher than historic levels. The shareholding in AGIT represents just under 3% of my portfolio. My detailed research can be found here.