Rights & Issues Investment Trust Ord

UK Smaller Companies

Rated Fund 2018-19. Concentrated portfolio for adventurous investors

Crowned the Best UK Growth Trust in Money Observer’s 2018 investment trust awards, this is a self-managed trust.

It has been run by Simon Knott, a low-pro­file ‘deep value’ investor, for almost 35 years. He has a fantastic long-term record, with the trust’s net asset value per share rising 600% over the past decade.

The manager owns a chunky amount of the shares, which provides some alignment of interests between the board and shareholders. However, it also entails a high level of key man risk. The trust’s annual report recognises Knott as ‘crucial to performance and the loss of the investment director could adversely affect performance in the medium term’

The portfolio is also highly concentrated, with almost all of the assets invested in 20 investments. Knott believes that rigorous risk analysis of his investments helps to control risk despite the concentrated portfolio. He keeps turnover low, which helps to minimise costs and achieve investment consistency.

In 2017, when stock markets were riding at record highs, Knott conceded to struggling to find companies to buy at such elevated levels, choosing instead to spend money on buying back the trust’s shares. This has narrowed the trust’s discount to net asset value. It was approaching 28% in early 2016, but stood at 7% at the end of 2018, boosting returns.

Given such a strong run and the high level of risk inherent in this trust, David Liddell, a director of IpsoFacto Investor, an online investment advisory service, reckons it “should be avoided by the more risk-averse”.

Narrative and ratings content all as of 01 January 2019.

See all Money Observer rated funds
Name
Rights & Issues Investment Trust Ord
Manager
Discretionary Unit Fund Managers
Type
Closed Ended Investment Company
ISIN
GB0007392078
Sector
UK Smaller Companies
Launched
31/07/1962
OCF
0.46 %
3 Year Sharpe
0.84
Yield
1.5 %
Benchmark
FTSE AllSh TR GBP
Fund Size
£ 148.1 million
NAV
2,079
Gearing
89
Discount Premium
-7
The objective is to exceed the benchmark index over the long term whilst managing risk. It will invests in equities with an emphasis on smaller companies. UK smaller companies will normally constitute at least 80% of the investment portfolio. UK smaller companies include both listed securities and those quoted on the Alternative Investment Market (AIM). The investment portfolio will normally lie in the range of 80% to 100% of the funds of shareholders, and therefore gearing will normally be between negative 20% and 0%.
Holding %
Scapa Group PLC 11.29 %
Treatt PLC 10.42 %
Hill & Smith Holdings PLC 10.14 %
Vp PLC 9.97 %
RPC Group PLC 9.22 %
Colefax Group PLC 7.29 %
Macfarlane Group PLC 7.22 %
Renold PLC 4.46 %
Spirax-Sarco Engineerin 4.43 %
Electrocomponents PLC 3.88 %
Region %
United Kingdom 100.00 %
Sector %
Industrials 37.94 %
Consumer Cyclical 27.78 %
Basic materials 27.55 %
Technology 6.02 %
Name
Discretionary Unit Fund Managers
Address
EC2R 8JR, London, United Kingdom
Legal Structure
Closed Ended Investment Company

Managers

Simon Knott
Joined 01/01/1984

Data provided by Morningstar.

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