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Drop?

lse:edin

#1

Why the continued drop? Overreacting?

I have held Edin for over 25 yrs and traded to in and out. With disc now on 7% this looks like a good top up opportunity for long term holders

Az


#2

Az, I doubt that the SP drop is due to overreaction. The SP performance over the last year is one of the worst in the UK Equity Income sector. The NAV performance over the same timeframe is even worse.

There would have been some reputational damage from the Provvie unfortunate situation/managerial error of judgement (delete as appropriate) and this may have caused the discount to widen, but removing that from the equation the NAV performance (which IMO is how the fund manager should be judged) has been terrible over the last year.

Investors may have just got fed up with the performance and the Provvie situation may have been the straw that broke the camel’s back - it certainly was with me.

I continue to hold MRCH, SHRS and LWI in the sector, all of which have performed far better than EDIN recently. FGT is classed in the same sector by Trustnet and has also out-performed, but I would agree with PIE-EATER that its focus is different and it is not a valid comparison).

IMO Mr Barnett will need to do some portfolio reshuffling to get the fund performance back on track.

I never say “never” in investment and EDIN remain on my watch list, but as things stand the discount to NAV will need to get to double figures before I become interested again.

Competition in the UK Equity Income sector is intense, but for the last few years making a decent gain out of it has been like shooting fish in a barrel. However, IMO this situation is changing and going forward the fund managers will need to earn their fees.

Mark Barnett has significant ground to make up and I am currently content to watch from the sidelines while holding other ITs in the sector.

As ever, all IMO.

WD