Donate to Remove ads

Got a credit card? use our Credit Card & Finance Calculators

Thanks to NotSure,csearle,brightncheerful,Dormouse,Silverstar64, for Donating to support the site

Portfolio Turnover At Herald Investment Trust

Closed-end funds and OEICs
LooseCannon101
2 Lemon pips
Posts: 172
Joined: November 5th, 2016, 2:12 pm
Has thanked: 227 times
Been thanked: 103 times

Portfolio Turnover At Herald Investment Trust

#359718

Postby LooseCannon101 » November 24th, 2020, 7:07 pm

'Herald Investment Trust (HRI) tends to hold positions for the long term with the manager topping and tailing positions along the way where it feels these have run ahead of themselves or represent good value. Portfolio turnover is typically in the region of 15% per annum, suggesting an average holding period of around six to seven years, but much of the sales activity occurs through mergers and acquisitions (M&A), while positions are frequently added to when companies are fundraising. The average holding period for the top 20 holdings is over 13 years. Open market buying and selling also takes place, but liquidity is lower in small caps and so opportunities to do this may at times be limited.'

I found the above information on the Herald Investment Trust website.

HRI is a £1.2bn investment trust specializing in relatively small technology companies, whilst FCIT is a £4bn investment trust not specializing in any particular sector.

I once asked Jeremy Tigue (then fund manager) about 8 years ago at F&C IT's AGM what our portfolio turn rate was. He replied that it was about two and a half years. HRI have an impressive record - 11.9% per annum total return over 26 years, whilst that for FCIT over the past 20 years is about 8%.

I wonder if the longer holding period for HRI is a significant factor in it's out-performance? I have never held HRI, but wish I did.

Backache
2 Lemon pips
Posts: 201
Joined: November 8th, 2016, 7:26 pm
Has thanked: 8 times
Been thanked: 75 times

Re: Portfolio Turnover At Herald Investment Trust

#359747

Postby Backache » November 24th, 2020, 9:07 pm

Herald is bittersweet for me, I have held it for a few years, but I sold Scottish Mortgage to buy it.

UncleEbenezer
Lemon Half
Posts: 6142
Joined: November 4th, 2016, 8:17 pm
Has thanked: 837 times
Been thanked: 1384 times

Re: Portfolio Turnover At Herald Investment Trust

#359781

Postby UncleEbenezer » November 24th, 2020, 11:49 pm

I have a small Herald holding (and a much larger Scottish Mortgage one).

It's an interesting one to hold, as it runs a permanent discount, but pays no dividend. If that should ever change it could be bonus-time for shareholders, but as things stand we can enjoy capital growth on paper but take a hit if we ever want to cash it in.

Part of its performance is the discount creeping into a single-digit percentage: something that could continue if sentiment favours it, but could also reverse sharply.

LooseCannon101
2 Lemon pips
Posts: 172
Joined: November 5th, 2016, 2:12 pm
Has thanked: 227 times
Been thanked: 103 times

Re: Portfolio Turnover At Herald Investment Trust

#360033

Postby LooseCannon101 » November 25th, 2020, 5:28 pm

Thanks for the replies.

I am more interested in portfolio turnover in a general sense for a variety of investment trusts. Herald IT just happened to fit the bill as compared to F&C IT which is my only holding.

If a fund manager has a minimum holding period of 5 years, it will concentrate his/her mind at the time of purchase on long-term prospects of that particular company. Only 'momentum junkies' would ever have an average holding period of less than a year.


Return to “Investment Trusts and Unit Trusts”

Who is online

Users browsing this forum: No registered users and 10 guests