Interactive Investor

Ian Cowie: my winners and losers in first quarter of 2024

Our columnist examines the highlights and lowlights among his investment trust holdings for the first three months of this year.

4th April 2024 08:57

by Ian Cowie from interactive investor

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Success has a hundred fathers but failure is a bastard, so it is no surprise that so many investors are bragging about their American technology shares while maintaining a stony silence about less-fortunate British rivals.

But it is important to report the rough as well as the smooth of stock market investment, which is why this column must cover the failures in my forever fund as well as the winners.

The laggards

Because I know that some of you enjoy reading about my pratfalls more than my profits, let’s start with the stand-out stinker from the first quarter (Q1) of 2024: Schroders Capital Global Innovation Trust (LSE:INOV). This investment trust turned £1,000 on 1 January 2024 into just £882 by 29 March 2024. Ouch!

This fund originally aimed to monetise biotechnology innovations from British universities, among other home-grown new technology, and is probably still best known for having been launched by the star fund manager Neil Woodford. After avoiding all his other funds because of their tobacco holdings, I liked the sound of helping to capitalise British science and invested 1% of my life savings at launch in April 2015, taking a 10-year view of what I expected to be an up-and-down volatile venture.

Well, I was half right because it has been down all the way since. Nine years later, nearly 90% of my money has disappeared and I can’t claim to be optimistic that its extended global mandate will make much difference.

Further afield, BlackRock Latin American (LSE:BRLA) was my second-worst performer in Q1, turning £1,000 into £897, although it is only fair to point out that it has turned £1,000 into £1,253 over the last year. Brazil is the country of tomorrow, just like it was yesterday, and perhaps it always will be.

Sad to say, Japan’s recent renaissance did not extend to the smaller companies specialist Baillie Gifford Shin Nippon Ord (LSE:BGS), which turned the same original investment into £920 by the end of last month. Like the other losers above, BGS demonstrates the importance of diversification or not having too many eggs in one basket.

The winners

That truth is timely for investors who are late arrivals at the American artificial intelligence (AI) and semiconductor chips-with-everything party. This made Polar Capital Technology Ord (LSE:PCT) my top performer in Q1 with an end value of £1,152 after hitting £1,522 over the last year.

I have been a shareholder in PCT for more than a decade and continue to believe that anyone who is serious about owning a stake in the future must have some exposure to its underlying holdings, such as Apple Inc (NASDAQ:AAPL), Microsoft Corp (NASDAQ:MSFT) and NVIDIA Corp (NASDAQ:NVDA). Having said that, I do feel some sympathy - and trepidation - for anyone buying them for the first time at current valuations. Don’t look down!

More surprisingly, and reassuringly, for this long-term investor, the marine leasing specialist Tufton Oceanic Assets Ord (LSE:SHIP), was my second-best performer in Q1 with an end value of £1,134. If only I had added to that 2% holding instead of foolishly trying DIY direct exposure to Moller Maersk (MAERSK-B) whose concentration on container ships proved much less buoyant than SHIP’s professionally managed exposure to a diversified portfolio of bulkers and tankers, transporting dry and liquid commodities.

Canadian General Investments Ord GBP (LSE:CGI) came third in the last quarter with an end value of £1,099 on the usual basis. Trading at an eye-stretching 40% discount, this Canadian $1.4 billion (£819 million) fund, founded in 1930, looks like a cheap way to catch up with Nvidia - its biggest exposure at 8% of assets – Apple and more esoteric top 10 holdings that include Canadian Pacific Kansas City Ltd (TSE:CP) railroad and West Fraser Timber Co.Ltd (TSE:WFG).

Nick Britton, research director of the Association of Investment Companies (AIC), commented: “Mega-cap US tech stocks continued to roar ahead in Q1. As a result, the investment trust sectors that did best were those with the most exposure to those companies: technology and North American equities.”

But no party can go on forever and some might end with a hangover. So my fourth-best fund in this quarter, Fidelity European Trust Ord (LSE:FEV), deserves a mention for delivering £1,097 after £1,219 over the last year.

Underlying holdings are led by the world’s biggest food company, Switzerland’s Nestle SA (SIX:NESN), Denmark’s weight-loss wonder drugs-maker Novo Nordisk A/S ADR (XETRA:NOVA), the Dutch microchip-making machines-maker ASML Holding NV (EURONEXT:ASML) and the Franco-Italian eyewear giant Essilorluxottica (EURONEXT:EL).

Such diversified quality gives this FEV shareholder confidence that I will remain happy to claim paternity rights for all my portfolio, whether the American technology party ends with a bang or a whimper.

Ian Cowie is a freelance contributor and not a direct employee of interactive investor.

Ian Cowie is a shareholder in Apple (AAPL), Baillie Gifford Shin Nippon (BGS), BlackRock Latin American (BRLA), Canadian General Investments (CGI), EssilorLuxottica (EL), Fidelity European (FEV), Microsoft (MSFT), Nestlé (NESN), Novo-Nordisk (NOVO), Polar Capital Technology (PCT), Schroders Capital Global Innovation (INOV) and Tufton Oceanic Assets (SHIP) as part of a globally diversified portfolio of investment trusts and other shares.

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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