Interactive Investor

Syncona investment trust keeps place in ii ACE 40

29th October 2021 10:22

Jemma Jackson from interactive investor

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interactive investor has completed its formal review of Syncona and it remains on the ACE 40 ethical rated list.

interactive investor, the UK’s second-largest DIY investment platform, has completed its formal review of Syncona (LSE:SYNC) investment trust. After an extensive review of the trust’s approach and performance, it remains on the ACE 40 list.

The trust was typically trading on a relatively high premium and since addition to the ACE 40 in Autumn 2019, its share price has been volatile and the premium almost eroded, which was disappointing and triggered the ‘under review’ process.

Dzmitry Lipski, Head of Funds Research, interactive investor, says: “We have conducted a careful review of the risks associated with the trust, including the approach of the manager and portfolio composition as well as assessment of the sector.

“Syncona has a strong sense of social purpose through the companies it builds and finances to provide transformational treatments for patients with a goal to extend and enhance human life.

“Managed by a highly scientific and experienced management team, the trust aims to achieve superior long-term capital appreciation by focusing on founding, building and funding a portfolio of global leaders in life sciences.

“As companies go through various stages of clinical trials to product approval, the managers investment horizon is very long term and relies on building a high-conviction portfolio of high-growth companies diversified across therapeutic areas and the development cycle.

“But investors should note that as the portfolio is invested mainly in unquoted companies with significant exposure to three public holdings, the returns are likely to be volatile and substantially deviate from market indices.

“We remain positive on the trust outlook and see it as a strong choice for adventurous investors prepared to tolerate high volatility in the short term but potentially reap rewards over the longer term.

“Given its high portfolio concentration, exposure to unquoted companies and absence of a formal premium/discount control mechanism, the trust should form only a small, satellite holding in a well-diversified portfolio. This trust has always been classed as an ‘Adventurous’ ACE 40 option, and will very much continue to be so.”

The premium

interactive investor has always taken the view that despite the premium, some investors would still find this trust appealing for its focus on transforming patient’s lives, while noting that the performance since launch has been good.

It has always been flagged as an adventurous option and ii has always made clear that the shares of this investment trust may trade at a significant discount or a premium to net asset value for a variety of reasons, including the valuation of unlisted companies and market conditions.

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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