Ian Cowie: a year since the war, this is how my ‘forever fund’ has fared

Our columnist picks apart a ‘brutal 12 months’ for his forever fund to reveal his best and worst investments since Russia invaded Ukraine.

Next week will mark the first anniversary of Russia’s invasion of Ukraine, Europe’s worst war since 1945, and an existential shock for stock markets. But the good news is that investment trusts diminished risk by diversification and, perhaps surprisingly, across all members of the Association of Investment Companies (AIC), produced a marginally positive 0.65% average return since the close of trading on February 24, 2022, when fighting began.

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Never mind the industry averages, though, what about the 20 investment trust shares in my “forever fund”? It’s been a brutal 12 months, with double-digit winners and losers.

So, without further ado, let me fess up to the worst of Cowie’s Clangers followed by a brief review of investment trust winners from the first year of conflict.

Schroder UK Public Private Trust (LSE:SUPP) (stock market ticker: SUPP), probably still better-known as Woodford Patient Capital, after the failed former “star fund manager”, remains the standout-stinker. SUPP, which sits in the AIC “Growth Capital” sector (please don’t laugh) has nearly halved by falling 48% since the Ukraine war started, according to independent statisticians Morningstar. The only reason I am hanging on is the forlorn hope something of value might emerge from its unlisted portfolio.

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Tritax EuroBox (LSE:BOXE), the continental warehouse specialist, is next worst among my current investment trust holdings with a 30% slump since the start of the war. But, as I first invested in EBOX last December at 66p, and they currently cost 70p, it’s no skin off my nose. Better still, these share are yielding 6.2% dividend income.

Vietnam Enterprise (LSE:VEIL), the self-descriptive country specialist, is third from the bottom with a one-year decline of 20%. But, once again, it could have been worse, because I sold all my VEIL shares last October for 542p, having originally paid 404p in July, 2018, and reinvested the money in VinaCapital Vietnam Opportunity Fund (LSE:VOF) at 426p. Morningstar reckons VOF has fallen 2.5% since the war started but a 2.9% dividend yield pays me to be patient.

On the upside, the clear winner is Ecofin Global Utilities & Infrastructure (LSE:EGL), which generated total returns of 24%, aided by surging energy prices, to sit just outside my top 10 holdings by value. EGL’s biggest underlying holding is NextEra Energy (NYSE:NEE), which claims to be the world’s biggest producer of wind and solar electricity.

Closer to home, EGL also holds shares in another self-descriptive investment trust, Greencoat UK Wind (LSE:UKW). I first bought shares in what was then called Ecofin Water & Power Opportunities (EWPO) at 122p in March, 2011, and then invested more heavily at 152p in September, 2019. They cost 218p this week and yield 3.6% dividend income.

India Capital Growth (LSE:IGC) came second over the last year, with a total return of 22%. This specialist in medium and smaller companies in the world’s biggest democracy seems to be winning from rising worries about China, the world’s biggest dictatorship.

Companies including the technology giant Apple Inc (NASDAQ:AAPL) are transferring production from China to India. Coming down from the clouds, it remains a very bumpy ride at IGC. For example, shares I bought for 121p in September 2021 cost only 123p this week and they yield no income.

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International Biotechnology (LSE:IBT) grabs the bronze medal in this post-war analysis with total returns of 20%. Better still, this self-descriptive investment trust in the AIC’s “Biotechnology & Healthcare” sector yields 3.9% dividend income.

Less happily, IBT’s board of directors announced this week that its fund managers, SV Health, wish to focus on other activities, so they might have to find new managers. Fortunately, the stock market does not seem too distraught about this unexpected development, with shares I bought for 653p in April 2020 currently costing 713p.

Nick Britton, head of intermediary communications at the AIC, told me: “The average investment company delivered a small positive return over this period, but within that average there is a gulf between winners and losers.

“Several equity sectors have delivered double-digit returns, while tech companies and property have suffered. It goes to show the difficulty of predicting events, or how markets will react to them. Keeping a diversified portfolio is a tried and tested way to cushion the worst of the blows that markets may throw at us.”

Few people predicted the invasion of Ukraine last February and it remains unclear whether we are nearer to the end or the beginning of this conflict. Truth is often said to be the first casualty of war but, with a globally diversified portfolio of investment trusts, there is no need for my life savings to become collateral damage.

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

Ian Cowie is a shareholder in Apple (AAPL), Ecofin Global Utilities & Infrastructure (EGL), India Capital Growth (IGC), International Biotechnology Trust (IBT), Tritax Eurobox (EBOX) and Schroder UK Public Private Trust (SUPP) as part of a globally diversified portfolio of investment trusts and other shares.