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Fund Profile

CT Global Managed Portfolio 07 September 2023

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
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Overview

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.

Analyst's View

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.

Bull

  • 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

Bear

  • 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
Continue to Portfolio

Fund History

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 share classes, the BMO Managed portfolio offers different solutions to investors with different objectives through investment in a diversified 'fund of funds' wrapper...
25 Sep 2019 One-stop shop: how multi-asset trusts offer superior diversification
Investment trusts are particular suited to this mode of investing. We examine their advantages over open-ended funds and highlight the trusts which do it well…
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