I posted on the AJOT thread:
"Takeover bid for Daibiru at 50% premium to add 2.7% to AJOT's NAV"
We may have some Daibiru in AGT, I have not checked yet. |
 AVI Japan Opportunity (AJOT) offers investors a highly active approach to Japanese investing. This is not only due to the highly concentrated portfolio of high-quality Japanese equities the trust owns, but also through the large amount of active engagement campaigns the team run. Currently, 85% of AJOT’s portfolio is undergoing some form of deep engagement by the team. A key strategy of the managers is to work with companies on creating shareholder value and correcting undervaluations by addressing poor corporate governance, encouraging better utilisation of cash (e.g. shareholder returns, M&A, capital expenditure), improving shareholder communications and working on corporate strategy including a takeover event.
AJOT’s team, in our view, implement an onerous investment process which requires deep expertise and skill, as they aim to proactively create and unlock shareholder value of their investments through active engagement. Not only does this mean AJOT’s investment process is a clear differentiator (and source of potential alpha) from many of its Japanese fund peers but, in conjunction with its highly concentrated portfolio, it makes it a strong source of diversification for many investors, even if they have a pre-existing Japanese equity allocation.
Since its inception in October 2018, AJOT has handily outperformed its benchmark, the MSCI Japan Small Cap Index. Over the last 12 months AJOT’s active, idiosyncratic approach to investing has borne fruit, and it is the second best-performing trust in its peer group over the period.
Besides its attractive diversification characteristics and strong performance, we also believe that AJOT is a good option for ESG-conscious investors looking to gain exposure to Japan. Activist approaches like AJOT’s will be pivotal in righting many companies’ poor ESG practices, making AJOT an important driver for better ESG practices.
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Kepler Partners
70 Conduit Street
London
W1S 2GF |
AJOT is also buying Wacom (tablet manufacturer), which is mentioned in the AGT newsletter as buying across the AVI funds. |
The newsletter for October is out. |
AVI are not criticising TPIL investment performance it is the lack of engagement and the refusal to explore ways to close the discount. Having conducted a small but persistent buyback programme themselves AVI have demonstrated that the expense can reap good rewards. TPIL argues that it doesn't need telling how to run its own business, it knows best, that money is well spent in other ways rather than being forced to close the discount. But maybe TPIL needs a dose of its own medicine. And the discount is much too wide, it ought to want to narrow it. I would not be surprised if other "value" investors want to see more effort from TPIL on this and are ready to support AVI in changing their boardroom. You are supposed to listen to major shareholders not rubbish them. Much rather they find a way forward, it would be a shame if AVI concluded with an exit. |
The spat is also mentioned here at the start of a more generic article on AGT. |
Fail to understand why they persistently target tpou, while in their portfolio there are far worse for far too long holdings like tfg, that they never utter a bad word about, while seeing the value of tfg falling from their old top ten to a top 30 holding now. |
Uh oh! Did they pick the wrong target...!!! |
AGT has a "Japanese basket" and that basket, while not being a direct holding in AJOT (I assume AVI cannot buy its own trust for AGT) it is very highly correlated to AJOT's holdings. The Japanese basket is roughly a quarter of AGT, so you already own AJOT indirectly.
Buying AJOT allows you to add a bit more of Japanese "value", while having the same risk as AGT: Same manager, skills and approach as AGT has.
AJOT has taken its time to lift-off and is still a relatively small trust. They did not get to the desired size at launch but went ahead anyway. I am glad to have been patient with it, but there is still some way to go for it to perform as plannned.
And yes, the trust side of LWDB is a big collection of UK blue chips which are milked for their dividend and a value-ish approach too. After all, this is what it says on the tin. Income is not supposed to be adventurous. LWDB has had a good run of late surfing on the return of value. |
Thanks for the ideas LWDB is interesting but really a lot of the same old FTSE stuff in the trust that i have over other trusts.
AJOT hmmmm not proven yet but definitely interesting I will look a little closer. I do actually have a few JSGI for a little Japanese exposure in the portfolio. Whist Japan seems to be shunned by most (demographics / xenophobia etc... ) They have got some world leading companies and from the outside seem a very very tech savvy lot to me. It's definitely diversification, for me at least.
marktime thanks. I do have some ETF global trackers. These are basically 60-70% US.
SMT! I was going to buy some at just over £8 when they fell back a little a while back. Doh i talked myself out of it. I agree with you in 10 years time who knows what the world will be like ( The guys at SMT ? Probably got a better idea than me).
I don't know about you when i have a price in my head like the SMT £8ish I do find it really really hard to buy much higher up.
I don't think it was buffet but someone else good with words said something along the lines of.
"Twice a stupid stock price is still just a stupid stock price".
Probably in relation to Tesla. But the wise men at SMT seemed to do very well out of it. |
mbu69 yesterday I was taking stock of my portfolio performance over the last five years, congratulating myself on an approx. 13.2% annual return rate compared to about 6.5% pa from a FTSE100 tracker or about 4.5% pa from the Aviva pension I rescued my funds from.
And then I was reminded of Warren Buffett's bet that a passive index tracker over ten years would beat almost all active fund managers. He was right. But, he meant the US S&P 500 index tracker which has returned an average 16.5% pa over the last five years. We could have performed so much better if only we had invested in or tracked the right markets eg US or global growth and large caps.
If your investment focus is on the wrong markets or index eg UK large caps you are probably going to do OK with a top manager but history says you will underperform a passive bet on global and/or US growth. If you don't have the skills to pick the right companies there are plenty of investment trusts with good records who do ... just look at the Baillie Gifford stable for some examples ... or as Warren Buffett says in the long run you might as well just pick a couple of trackers from the Vanguard iShares range. Buffett is usually right.
Personally I don't think any 10 year porfolio is complete without SMT, but recently I have reduced my holding there in favour of AGT (where there is a deep embedded discount versus a sometimes frothy premium)
In 10 years time what themes and where do you think will be the most vital busy markets, electric cars or luxury goods, the UK or Europe or the US or China or Japan or India?
One word of caution though. Even looking back over 20 or 30 years we haven't had a global economy entering what looks like a significant inflationary cycle on the way. In those circumstances different asset classes or equity sectors are expected to perform better than others. The inflationary cycle should hopefully be transient though.
If in doubt exposure to a diverse range of assets and equity sectors is always advisable. Large cap trackers is one way, or trusts with managers with a knack for spotting the next growth theme. Even so it is sensible to also have stakes in property, commodities, energy and utilities, financials and consumer retail. |
I would say LWDB (Law Debenture), which is selling itself as quality + income.
Like FCIT and WTAN, it has been around for donkeys years.
They are now 80-90% UK, 10% US.
The odd thing about LWDB is that you actually own a company with a more run-of-the-mill IT attached to it. LWDB tends to trade at a premium and emits shares every now and then.
I hold FCIT, WTAN, LWDB and of course AGT as building blocks in my portfolio. FCIT/WTAN being the "boring but safe" bits.
You could also do worse than looking at AJOT, another trust run by Bauernfreund at AVI. AJOT is also usually trading at a premium. |
vacendak, Very droll.
I'm new here. I've held ( and still do hold ) quite a few income orientated trusts but in the last couple of years have only really been try to buy quality ( good historic total return trusts ) and a few index trackers. I'm hoping i won't need to cash in for 8-10 years.
I've got a few of these
FCIT
BUT
BNKR
WTAN
BGCS
and of course VWRL
I know these are large trusts and they have cross holdings. But in my head i like to think that adding new ones is diversifying.
Any more ideas ? |
I predict that on January 17th, 2022 Joe Bauernfreund will make a catastropic mistake and the share price will drop by 80%. |
Always interesting to read the AVI Global annual report and what they have as their top holdings. They are a good trust with a sound investment style that is good for a total return in excess of 10% per annum long term. |
In full, and always an interesting read: |
An unchanged final dividend of 10.5p in early January before the 5:1 split. A bit stingy but we are not here for the income, nor for the return from £32M or so spent on buybacks although it seems they are helping to close the discount without much improvement to NAV.
Thinking I might top up my holding at the time of the split, AGT has been performing really well and looks set to continue ... given the nature of the underlying investments do you think it might hold up through the inflation cycle better than, say, equally high performing small cap or growth trusts? |
Yes, it did not take long. |
Here's the sub-division we expected. 5 new shares for every 1 current. |
Break a few thumbs, telling people "We know where you kids go to school...", or "Nice family you have..." then the 15% discount will narrow.
I love funds that are actively managed. :) |
How amusing, the biter bit.
Like AGT the Third Point fund is up over 40% so far this year, so they are doing something right, the discount around 15% is unwelcome though. It will be interesting to hear what AVI are trying to achieve and how. |
Getting "active" with TPIL today. |
NAV 1st November 2021 was as follows:
Net Asset Value -- Debt at market value: 1,159.04 pence |
27th October 2021
Net Asset Value -- Debt at market value: 1,140.88 pence |
Now that the NAV is above 1,100 the ticks up look bigger and bigger. A +11p change is "only" 1% now. :)
Still some way behind more generic "globals" over 10 years like FCIT (Foreign & Colonial) and WTAN (Witan) and only closing on FCIT at 5Y. That being said, AGT has done very well over the past three years indeed, so kudos to the manager. |
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