BMO Managed Portfolio

Last updated 09 October 2019

With Income and Growth shares, the BMO Managed portfolio offers different solutions to investors with different objectives through investment in a diversified portfolio of investment companies...

Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by BMO Managed Portfolio. 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.

BMO Managed Portfolio

BMO Managed Portfolio Trust is a UK investment trust which has two share classes with discrete investment portfolios invested in closed-end investment companies. These are selected by Peter Hewitt, a highly experienced manager who has spent many years researching the closed-ended investment company sector. The Growth shares are focused on achieving capital growth, while the Income shares are focused on providing an income yield above that of the FTSE All-Share Index, along with some capital growth.

Both portfolios invest in a diversified range of over 25 investment companies, looking to ensure the underlying assets cover a range of geographic areas, investment management groups and sectors. They have been managed by Peter since launch in 2008; having managed the assets (which were previously held in F&C’s managed portfolio service) for over a decade, this gives him 20-plus years experience picking investment companies for these portfolios.

Peter is seeking to invest in investment companies which have managers with identifiable long-term performance records and whose managers’ interests are as fully as possible aligned with those of the underlying investors. A total-return mindset is adopted with regard to returns, and some downside protection in more adverse market conditions is desired whilst seeking to ensure the portfolios are exposed to long-term secular growth trends.

Since launch, the Growth portfolio and Income portfolio have seen significant outperformance against the benchmark FTSE All-Share index, with NAV total returns of 112% and 124% respectively, against a return from the benchmark of 91% (as of 31/05/2019, the end of the company’s most recent financial year). The Growth portfolio has outperformed the benchmark in nine of the 11 financial years since launch in 2008, whilst the Income portfolio has outperformed in eight of these periods. Currently, the Growth shares trade on a slight premium to NAV of 2.3%, whilst the Income shares are on a discount of c. 1.3%.

The Income shares dividend has increased each year for the last eight years, with the dividend having grown by 35% in total since launch. Presently the investments within the Income portfolio are yielding c. 4.4%. Any net income generated by the Growth portfolio is transferred to the Income portfolio, which concurrently returns an equivalent level of capital. This helps to benefit the income available for the Income shares and the capital growth of the Growth shares.

A share conversion facility is provided, whereby investors can annually switch between the Income shares and Growth shares (subject to minimum and maximum conversion thresholds) without incurring capital gains tax.

Callum Stokeld
Callum joined Kepler as an investment trust analyst in July 2019. Prior to this he worked as a senior investment analyst on a range of multi-manager, multi-asset portfolios, having previously worked at IFA firms in roles focused on oversight of fund selection and asset allocation. He graduated from the University of Glasgow with an honours degree in Law.

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Key facts

Investment objective

The trust aims to provide capital growth for Growth shareholders in each case through investing principally in a diversified portfolio of investment companies. It aims to provide investors in the Income shares with an attractive level of income, with the potential for income and capital growth principally in a diversified portfolio of investment companies

As at: 

07/10/19

Group/Investment

BMO Managed Portfolio Growth / Income

Ticker

BMPG / BMPI

Management Company

BMO Asset Management

Manager Name

Peter Hewitt

Association of Investment Companies (AIC) Sector

Flexible Investment

12 Mo Yield

0.0 / 4.5

Dividend Distribution Frequency

None / Quarterly

Latest Market Capitalisation

£73,850,252 / £58,901,141

Latest Net Gearing (Cum Fair)

0% / 8%

Latest Ongoing Charge Ex Perf Fee

1.01% / 1.08%

Turnover Ratio

10.18% / 8.97%

Shares Outstanding

35,504,929 / 44,320,705

Premium

1.01% / 1.08%

Daily Closing Price

208p / 134p

Source: Morningstar, BMO Asset Managment

Disclaimer

This report has been issued by Kepler Partners LLP.  The analyst who has prepared this report is aware that Kepler Partners LLP has a relationship with the company covered in this report and/or a conflict of interest which may impair the objectivity of the research.

Past performance is not a reliable indicator of future results. The value of investments can fall as well as rise and you may get back less than you invested when you decide to sell your investments. It is strongly recommended that if you are a private investor independent financial advice should be taken before making any investment or financial decision.

Kepler Partners is not authorised to market products or make recommendations to retail clients. This report has been issued by Kepler Partners LLP, is based on factual information only, is solely for information purposes only and any views contained in it must not be construed as investment or tax advice or a recommendation to buy, sell or take any action in relation to any investment.

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This is not an official confirmation of terms and is not a recommendation, offer or solicitation to buy or sell or take any action in relation to any investment mentioned herein. Any prices or quotations contained herein are indicative only.  

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