Fund Profile

CT Global Managed Portfolio 09 April 2024

Disclaimer

This is a non-independent marketing communication commissioned by Columbia Threadneedle Investments. 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.

Overview
Easing rates may act as a catalyst for CMPG’s and CMPI’s underlying holdings to re-rate…
Overview

CT Global Managed Portfolio Trust (CMPG/CMPI) is a well-diversified and benchmark-agnostic trust of investment companies strategy. The trust boasts two separate share classes: one is focused on generating capital growth, and the other on income. This dual share-class structure offers investors an annual opportunity to exchange between share classes at net-asset value, without currently incurring any additional costs or UK capital gains tax.

The trust is managed by long-standing investment trust specialist Peter Hewitt. As discussed in Portfolio, Peter has been positioning the portfolios to capture the extreme value found across the investment trust universe and increasing his exposure to key secular-growth themes he believes will drive long-term returns. These themes include technology and technological innovation, alternative sources of growth and income through assets in private equity and infrastructure sectors, and the absolute and relative value available across UK equities. Having exposures to these themes negatively impacted performance over the past couple of years as high interest rates weighed on investor sentiment and saw discounts widen. However, since the end of October 2023 expectations of easing rates and a softer landing have seen the growth portfolio show early signs of a rebound (see Performance).

As discussed in Discount, both share classes trade close to par, thanks to the discount-control policy, which has seen the board actively buying back and issuing shares when appropriate. The trust’s income share class also offers an attractive yield of 6.9%, which benefits from an income transfer mechanism between the two share classes (see Dividend).

Kepler View

Since the end of October 2023, rising optimism around easing macroeconomic conditions and interest-rate cuts towards the end of 2024 has contributed to CMPG outperforming the benchmark. In our view, the combination of improved investor sentiment and a narrowing of discounts across some of the hardest-hit sectors of the past couple of years could see this trend continue. As a result, we believe Peter’s increased exposure to these areas and to secular-growth themes could pay off – as they have in the past in the right environment.

We think CMPI’s high yield of 6.9% is particularly attractive, even when compared to the competitive yields currently available elsewhere in the market. The support provided by the income-transfer mechanism, the trust’s own revenue reserves and the reserves of the underlying trusts also offer some security on future dividends. Furthermore, we think the trust’s income is likely to benefit from Peter’s increased allocation to alternatives. We also think the ability for investors to transfer between the trust’s income and growth shares makes it a suitable candidate to be a ‘core’ strategy, perhaps amongst a broader portfolio of assets, which allows investors to reallocate as their investment needs evolve over the long term.

Bull

  • Income share class has an attractive and well-supported yield
  • Exposure to secular-growth themes may re-rate as macroeconomic conditions ease
  • Annual share class conversion facility allows shareholders to change portfolio requirements cheaply

Bear

  • Gearing on underlying trusts and income share class can exaggerate downside risks, as well as upside
  • Performance may lag if tighter macroeconomic conditions and negative investor sentiment persist
  • Trust of investment companies structure leads to higher look-through charges
Continue to Portfolio

Fund History

12 Jun 2024 How do you like them apples?
We do our best to categorise the trusts in the Flexible sector, many of which share little common ground...
09 Apr 2024 Fund Analysis
Easing rates may act as a catalyst for CMPG’s and CMPI’s underlying holdings to re-rate…
10 Jan 2024 Definitely maybe
Fund flows and discounts may shed some light on a once-in-a-generation opportunity…
18 Oct 2023 Computer says no
Markets are fixated on replacing humans with AI, rather than maintaining them with biotech. Could this be an opportunity to rotate profits?
07 Sep 2023 Fund Analysis
Attractive valuations across growth markets offer a good opportunity for CMPG/CMPI investors…
12 Jul 2023 Many hands make light work
We break down how multi-managers have performed over the past five years and their positioning for the inevitable uncertainty that lies ahead…
14 Dec 2022 Fund Analysis
The flexibility of a dual-share class strategy can provide a core solution for long-term investors…
06 Jul 2022 A game of two halves
In the second article of our series on the AIC Flexible Investment sector we see how performance has stacked up during two years when markets were poles apart...
30 Mar 2022 You say tomato…
Do it yourself or put it into a global fund and leave it to the experts - our analyst debate the merits of each approach...
16 Feb 2022 Fund Analysis
A ready-made portfolio of investment trusts with growth (BMPG) and income (BMPI) flavours…
21 Jul 2021 Every which way but loose
We break down the AIC Flexible sector into more useful segments…
24 Mar 2021 Shoot to Thrill: ISA targets for long term growth
We all intend to invest for the long-term but can often be distracted by the news...
10 Mar 2021 Spring Conference '21
Audio and presentations from 21 of the UK’s leading investment trust managers…
04 Mar 2021 Slides and Audio: BMO Managed Portfolio
Download the presentation and listen to the audio from our 'Ideas for your ISA' Spring Conference on 04 March...
04 Mar 2021 Fund Analysis
Offering both Growth (BMPG) and Income (BMPI) share classes, BMO Managed Portfolio Trust allows shareholders to switch annually between share classes in a tax efficient manner...
10 Feb 2021 Eye of the Pfizer
Mining shares have rallied in recent months. With further potential, what impact could this have on the relative returns of active UK Small cap strategies...
20 Jan 2021 Kepler's top-rated investment trusts for 2021
We update our annual quantitative ratings for investment trusts…
03 Sep 2020 Fund Analysis
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...
09 Oct 2019 Fund Analysis
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...
25 Sep 2019 Master of all trades: the best multi-asset trusts on the market
Investment trusts are particularly suited to multi-asset strategies. Our research identifies the leaders in this increasingly popular field...
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