CT Global Managed Portfolio 07 September 2023
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.
The growth share class (CMPG) has an objective of achieving capital growth. The income share class (CMPI) has the objective of providing an attractive level of income with the potential for income and capital growth.
CT Global Managed Portfolio Growth/CT Global Managed Portfolio Income
Association of Investment Companies (AIC) Sector
Dividend Distribution Frequency
Latest Market Capitalisation
£83,821,126 / £56,510,163
Latest Net Gearing (Cum Fair)
-7% / +9%
Latest Ongoing Charge Ex Perf Fee
1.07 / 1.17%
37,587,949 / 50,455,503
(Discount)/Premium (Cum Fair)
-2.3 / -0.2%
Daily Closing Price
223p / 112p
CT Global Managed Portfolio Trust (CPMG/CPMI) offers a long-term investment solution for both growth and income investors. The trust is managed by the highly experienced Peter Hewitt, who uses well-diversified investment companies to build both portfolios. His overarching investment strategy is to identify high-quality companies, exposed to secular growth themes which he believes are likely to drive long-term returns.
As discussed in Portfolio, following a period of de-risking and focus on capital preservation, Peter has begun to lean back into high-growth areas, specifically healthcare and artificial intelligence. He believes these high-growth sectors will deliver strong returns over the long run with the likes of Polar Capital Technology Trust (PCT) and Allianz Technology Trust (ATT) entering the top ten holdings within the growth portfolio.
Generating Performance over the past couple of years has proven challenging as investment trust discounts have widened out in the face of rising interest rates and risk-off investor sentiment. However, this has led to valuation opportunities, particularly in the UK, leading to a significantly increased allocation of 37% in the growth portfolio, including the introduction of several small and mid-cap focussed funds.
The income portfolio’s Dividend yield is an attractive 6.4%, as of 01/09/2023. This is bolstered by the net income transfer mechanism which means any net income received by CPMG is transferred to CPMI, which is then available for distribution. As both CPMG and CPMI’s holdings are investment companies, they can also retain income in reserve, providing support to the payout during tougher periods meaning CT Global Managed Portfolio Trust effectively has two layers of reserves. The Discount control mechanism also keeps discount volatility to a minimum. In addition, on the annual conversion date, investors can exchange between share classes at net asset value. CMPG and CMPI currently trade on narrow discounts of 2.3% and 0.2% respectively.
We think CT Global Managed Portfolio Trust’s highly diverse trust of investment companies approach and the dual share class structure make it an attractive long-term savings vehicle for investors who prioritise growth or who prioritise income. Its structure also allows investors to shift between them without currently incurring UK capital gains tax, which could be useful for those nearing retirement and looking to shift into income-producing assets from growth equities. Furthermore, the income and growth transfer mechanism allows Peter to deliver an extremely attractive income for CMPI shares.
Although Peter’s long-term tilt to growth means the trust has underperformed as interest rates have sharply risen, we believe the market reaction has been overdone and has thrown up a range of attractively valued, high-quality opportunities. Peter’s focus on quality is central to the strategy and through his gradual increase of key growth markets such as artificial intelligence and the relatively undervalued UK smaller companies sector, we believe it exposes investors to the attractive growth potential historically associated with these sectors should macroeconomic conditions ease.
- Exposure to key secular growth themes may enhance longer-term performance should macroeconomic conditions ease
- Income shares provide a secure and attractive yield
- Annual share conversion facility provides flexibility for investors
- Performance may continue to lag if inflation and interest rates remain stubbornly high
- Trust of investment companies approach results in high overall cost of investment
- Gearing on income shares can exaggerate the downside, as well as the upside