Interactive Investor

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

Our columnist assesses how the investment trusts in his portfolio performed during the past three months.

4th July 2024 09:01

by Ian Cowie from interactive investor

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It’s too early for an Indian summer but never too soon for shareholders to diversify internationally, with investment trusts bringing the world within reach. The idea is to diminish risk and maximise returns.

Never mind the theory, my modest portfolio showed how it works in practice during the second quarter (Q2) of this year that ended last month. Let’s lead with the losers because I know that some of you enjoy them more than my winners.

BlackRock Latin American (LSE:BRLA) had another terrible three months, turning £1,000 into just £876. No wonder some City insiders claim Brazil is the country of tomorrow - and always will be.

Sad to say, I have been a BRLA shareholder for more than a decade - having transferred stock from a paper-based broker at 310p per share in January, 2010. They traded at 354p this week. Dividend income of 6.6%, which has increased by an annual average of 4.8% over the last five years, keeps me hanging on in hope.

Gulf Investment Fund (LSE:GIF) was the surprise second-worst investment trust share in my forever fund during Q2, turning £1,000 into £892. The atrocities in the Middle East have hit valuations across the Arabian Gulf.

Despite negligible gains of less than 1% over the last year, GIF is still the top performer in the Association of Investment Companies (AIC) Global Emerging Markets sector over the last five years and decade. I remain hopeful that trend can resume and dividend income of 3.5%, rising by a remarkable 22% per annum, pays me to be patient.

Schroders Capital Global Innovation Trust (LSE:INOV) sits third-worst in this toxic cocktail, shrinking the usual £1,000 into £930. Originally set up to commercialise British universities’ scientific discoveries, this fund might yet benefit from an incoming government’s enthusiasm for picking winners with other people’s money.

Let’s hope they have more luck than the former star fund managerNeil Woodford, who launched this dud in April 2015, when I paid £1 per share. You can pick them up for 12p today but I went in on a 10-year view and might as well see it out.

There’s only so much pain my wallet can bear, so let’s look at some winners. India Capital Growth (LSE:IGC) and JPMorgan Indian Ord (LSE:JII) both enjoyed Q2, ranking third and fourth in my investment trust portfolio, turning £1,000 into £1,132 and £1,126 respectively.

The world’s largest democracy surprised pundits with a more slender majority than expected in its recent re-election of Narendra Modi as prime minister. However, India should continue to benefit from rising tensions between America and dictatorships such as China and Russia.

Coming down from the clouds of geopolitics and macroeconomics, it’s only fair to add that JII is my longest-held share and was my very first 10-bagger, when I paid 63p in June, 1996, for shares that trade at £10.16 today.

Tufton Oceanic Assets (LSE:SHIP) was my second-best investment trust shareholding, with a Q2 end value of £1,135. This marine-leasing specialist benefits from the fact that more than 80% of international trade travels by sea.

Better still, that percentage is rising, according to UNCTAD, the United Nations Trade and Development organisation. Here and now, SHIP pays 7.6% dividend income, rising by an eye-stretching annual average of 24%, but the shares remain priced 18% below their net asset value (NAV).

Tritax Eurobox (EBOX) came tops with a Q2 turn-out of £1,157. This specialist in Continental European warehouses and distribution hubs for all the stuff we buy online had been quietly delivering above-average dividend income.

Then, last month, EBOX said it was assessing a possible cash bid from the Canadian giant Brookfield Asset Management. This was due to expire on Monday but - by mutual consent - has now been extended to 29 July. Better still, EBOX says other expressions of interest have been received, so shareholders might yet enjoy the excitement of an auction.

Nick Britton, research director of the AIC, commented: “Perhaps surprisingly, India has been a standout performer in the quarter, despite the election not delivering the result the market might have preferred.”

Whatever happens next, investment trusts make it convenient and cost-effective to keep fingers in many pies, aiming to pluck out profits wherever they may arise. It might be raining here but somewhere the sun is shining.

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

Ian Cowie is a shareholder in BlackRock Latin American (BRLA), Gulf Investment Fund (GIF), India Capital Growth (IGC), JPMorgan Indian (JII), Schroders Capital Global Innovation (INOV), Tritax Eurobox (EBOX) an 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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