Page 22 - DIY Investor Magazine Issue 24

BUYING SO FAR
This year, I’ve added a little Acorn Income and Bluefield Solar Income (before corona took centre stage) and some Smithson.
I haven’t sold any trusts or funds and have no plans to do so; when this crisis has passed, I will take a look at my position weightings and take a view whether to shift anything - I wouldn’t expect any major changes.
DICEY DIVIDENDS
One thing I do like to do is reinvest my dividends and use the cash to tweak my position sizes and top up anything that seems to have fallen unduly harshly; that could be curtailed for the remainder of 2020, as I’m expecting a few holdings to cut their dividends.
Some have referenced futures pricing in dividend cuts of 30% across the UK market, but I can’t find a free online source for this information.
I’d be surprised if my holdings cut that far; my UK smaller company funds would seem the most vulnerable but no trust has announced anything yet, either with regards to future dividends or those already announced but yet to be paid.
Nine of my trusts, roughly half of my total number of positions, are due to announce dividends in late April or May so the picture should be a lot clearer then.
THE WIDER WORLD OF INVESTMENT TRUSTS
Little to report - the average trust discount has gone from 1.4% at the end of 2019 to 8.5% at the end of Q1; however, it did spike a lot higher in mid-March.
Gearing has risen a bit, due to the underlying value of investments falling, but only from 7% to 9%, so absolute borrowing levels have reduced a little.
New issues have completely dried up, with just one IPO taking place; Nippon Active Value joined the market
on 21st February, just as prices started to decline, and raised £103m.
As of 20st March, it had only invested 29% of the cash raised so it has held up better than most’; it expects to take 6 months to deploy it all.
AIC has published a list of the longest-serving trust managers and their thoughts on how to invest now, plus an interesting look at the way the investment trust industry has changed over the last two decades.
They have also updated their list of dividend heroes and the next generation with over 10 years of increases; both lists could be a little shorter this time next year.
KEEP SAFE
Our kids have been off school for three weeks now and we’ve settled into a fairly regular routine; there have been some virtual classes to break things up and the food shops seem to be mostly back to normal, but with every passing day, we’re getting closer to the end of this crisis.
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DIY Investor Magazine | Apr 2020 22