Page 20 - DIY Investor Magazine - Issue 27

SLOW AND STEADY WINS THE RACE
We take a look at MAJE, a trust which has seen a significant turnaround in performance and has the potential to continue delivering income and growth in 2021...
Disclosure – Non-Independent Marketing Communication.
This is a non-independent marketing communication commissioned by Majedie Investments. The report has
not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.
Majedie Investments (MAJE) is a self-managed investment trust offering exposure to a broad range of equity strategies
– via funds managed by Majedie Asset Management (MAM) – some of which cannot be accessed via any other means by private investors.
MAM, which also won the mandate for Edinburgh Investment Trust from Invesco in 2020, has assets under management of c. £8.2bn.
MAJE retains a 17.2% stake in the asset management company itself, which currently represents c. 16.7% of MAJE’s NAV (as at 31/12/2020). In addition to its holding in MAM, the portfolio is split across five funds offering broad geographic diversification across the globe. Predominantly this is through equities, and it includes long/short equity via the Majedie Tortoise Fund.
MAJEDIE INVESTMENTS ASSET ALLOCATION (%)
MAM UK Equity 28.5
MAM Tortoise Fund 11.6
MAM UK Income Fund 6.3
MAM US Equity Fund -
MAM Global Equity Fund 24.2
MAM International Equity Fund 8.1
pickers’ with a flexible investment process who are not afraid to choose stocks that might be out of favour. This means that they have been able to invest in companies which they believe are fundamentally undervalued, and offer an attractive risk/ return profile which should perform well in a variety of market conditions.
BUT HOW HAS THE TRUST FAIRED IN THE CHALLENGING 2020 ENVIRONMENT?
Although the underlying funds held by the portfolio have performed relatively well versus their benchmarks, in overall performance terms Majedie Investments has – like many trusts in 2020 – had a challenging year.
The trust’s portfolio bias toward the UK worked against it,
with Brexit uncertainty clouding global investor sentiment. However, the tables have turned in recent months as the market absorbed news that a Brexit deal was done, and news of a vaccine opened up the potential for a significant global economic recovery.
The last three months have seen performance improve dramatically and the trust has delivered NAV returns of 11.3% (to 31/12/2020), outperforming its peers and the MSCI World which have delivered NAV total returns of 11.1% and 7.9% respectively. We see this as a vindication of the trust’s contrarian positioning and a testament to the diversification benefits it offers.
MAM
16.7
Cash / Other 4.6 Source: Majedie, as at 31/12/2020 The managers are fundamental ‘stock-
DIY Investor Magazine | Mar 2021 20