Edinburgh Investment Trust

[MaraMan]

I am moving slowly from individual shares to IT's and have had some cash in my ISA that I have been feeding into to various things. I wonder if Edinburgh IT is a good opportunity at the moment? It's just changed manager to Majedie after Mark Barnett underperformed for a few years. The new managers have been repositioning the holdings, now holding only six of those previously held. The yield is under threat of course, but I doubt there is an IT in this sector that isn't. What does stick out though, because of it's difference to it's peers, is that it is currently trading at a 12.5% discount. By contrast Merchants is at + 0.1%, Murray Income at -3.5% and Law debenture is at - 5.3%. It looks to me as though they all swim in the same small pond and Majedie has had the opportunity to refocus the trust under the umbrella of Covid and Barnett's departure.

I am wondering if after years of underperformance this could be the time to take another look at Edinburgh IT. Would appreciate any thoughts etc.

MM

[Dod101]

There was a discussion recently on this Trust recently but I cannot remember on which Board, never mind the thread. I expect that someone who is better at finding this sort of thing than I am will be able to find it. Better that you read that than reiterate the comments here. I have held Edinburgh for upwards of 25 years.

Dod

[SalvorHardin]

There was a discussion recently on this Trust recently but I cannot remember on which Board, never mind the thread. I expect that someone who is better at finding this sort of thing than I am will be able to find it. Better that you read that than reiterate the comments here. I have held Edinburgh for upwards of 25 years.

I've found two discussion threads on TLF. The first from last December when the manager was removed, the second from last month when he left Invesco "by mutual consent":

"Edinburgh Investment Trust - Barnett sacked"

https://www.lemonfool.co.uk/viewtopic.php?f=54&t=20814

"Goodbye Mark"

https://www.lemonfool.co.uk/viewtopic.php?f=54&t=23461

Also a short thread from last November

https://www.lemonfool.co.uk/viewtopic.php?t=20351

[monabri]

There was a discussion recently on this Trust recently but I cannot remember on which Board, never mind the thread. I expect that someone who is better at finding this sort of thing than I am will be able to find it. Better that you read that than reiterate the comments here. I have held Edinburgh for upwards of 25 years.
Dod

I use Google...!

Try typing "Dod101 edinburgh investment" ( omit speech marks and I didn't use capitalisation) into the Google search box.

The article was the 3rd item listed.

[MaraMan]

Ok thanks all, clearly there is little appetite for it at the moment. Those aged discussions were on the past performance and the change of manager, I though am interested in the future and the discount, or maybe it's still true that as Dod says discounts mean little at the moment.
I will mull on.....

MM

[LittleDorrit]

Skimming this month's release of the annual report, I suspect that the persistance of the discount is in part due to the high gearing and presence of the £100m 7 3/4% debenture due to mature in September 2022.
There may be the chance for tenacious holders to benefit from an element of discount compresion over the next two years from this source alone.It certainly worked for Merchants.

[Dod101]

Skimming this month's release of the annual report, I suspect that the persistance of the discount is in part due to the high gearing and presence of the £100m 7 3/4% debenture due to mature in September 2022.
There may be the chance for tenacious holders to benefit from an element of discount compresion over the next two years from this source alone.It certainly worked for Merchants.

I do not think that the Debenture has got much to do with the discount. It had another even more expensive Debenture which matured a few years back but my impression was that they did not really feature as a consideration either way. In fact as LD is suggesting I think, the soon to be maturing Debenture ought to be drawing in investors on the basis that however it is replaced, it will show a very big saving in costs. I think it is more the somewhat unsettling effect of the change of manager and the unknown quantity which is Majedie. For the time being investors really only have the last two or three years of very uninspiring results to go on. Edinburgh, being a mainly UK income trust, will have the same problems as the rest of us with dividend cancellations and the need to use their Revenue Reserves to bolster their own dividend.

I am a holder but I cannot say that I would heartily recommend it as a buy at the moment.

Dod