Fund Profile

Momentum Multi-Asset Value Trust 26 April 2021

Disclaimer

Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by Momentum Multi-Asset Value Trust. 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

Momentum Multi-Asset Value Trust (MAVT), recently rebranded from Seneca Global Income & Growth Trust (SIGT), aims to achieve total returns of at least CPI + 6% p.a. net of costs over a typical investment cycle through investment across a range of asset classes and geographies. With a team-based approach, the managers of MAVT invest both in direct securities and via third-party fund managers, employing a unique value influenced decision making process across a wide range of assets.

The investment process is avowedly-value based, with the managers seeking out both companies and third-party managers unloved by the wider market. With very strong returns in recent months, the team’s view over 2020 that the market was underestimating the resilience and intrinsic value of significant parts of the market appears vindicated. As we discuss under portfolio and performance, the team had observed that valuation disparities were so significant within markets that even minor adjustments to market level views could have outsized impacts.

As well as noting that MAVT can operate as a standalone portfolio, the managers note that their inherently contrarian stance often sees the trust function as a portfolio diversifier. Presently their tactical outlook sees them leaning positively towards the UK, Japan and Asian markets, whilst noting they continue to find significant diversifying opportunities in specialist/alternative investment vehicles. These alternatives proved a steady source of income over 2020, as discussed under dividend, and MAVT’s board has confirmed it intends to match the previous financial year’s dividend, giving a prospective yield of c. 3.8% (as at 01/04/2021).

MAVT employs a discount control mechanism (DCM) which, as discussed under discount, the board has been highly active in operating. Accordingly, MAVT has consistently traded close to NAV.

Analyst's View

MAVT’s managers have consistently delivered ‘real’ returns to shareholders, with dampened volatility when compared to equity markets, through their multi-asset, diversified approach. The past few years have not been kind to value investors, but the team have managed to stay true to their process and philosophy whilst generating income and absolute capital gains. We had previously noted that a rise in inflation expectations and the prospect of economic reopening might prove a catalyst to value realisation in much of the portfolio, and thus it has proven in recent months. Yet, whilst the opportunity may not be as acute as it was towards the end of 2020, there still appears to us an ample hunting ground for MAVT and their preferred third-party managers to identify stock specific opportunities for the longer term.

With an attractive dividend yield of 3.8%, the ongoing commitment of the board to maintain dividends should be reassuring to income investors, backed by very substantial distributable reserves. That said, having highly diversified underlying income streams give us confidence that MAVT’s revenues should remain relatively resilient in any event.

Even if some of the macroeconomic tailwinds currently in place fall or reverse, so crowded does much of the global market remain (exacerbated by the rise of passive investment), that we believe explicitly value-led strategies such as MAVT remain valuable portfolio diversifiers, offering potentially asymmetric relative upside when the stars align. This has, we would contend, been seen in recent months with the significant outperformance of value but, more especially, less liquid value.

BULL BEAR
Access to niche, boutique, highly active fund management strategies and a focussed portfolio of UK value stocks
It remains to be seen whether this proves a ‘false dawn’ for value
Attractive, well-diversified yield, well supported by income and reserves
Gearing can exacerbate downside as well as amplify upside
Should act as a diversifier to mainstream equities with potentially high NAV beta to any macro acceleration
Scale of buybacks has been very substantial, and reduction in share count could potentially be a concern
Continue to Portfolio

Fund History

20 Apr 2023 Fund Analysis
MAVT offers a diversified source of inflation-protected income and growth…
10 Feb 2023 Wrong when it’s right
Economic data is balanced on a knife edge, but that hasn’t stopped the markets surging so far this year. With such a confusing picture to consider, we look at the opportunities lying elsewhere…
15 Sep 2022 Fund Analysis
MAVT’s diversified, multi-asset portfolio and attractive yield may provide a source of ‘refined value’ in volatile markets…
09 Sep 2022 A simple route to diversification and inflation protection
MAVT is neatly positioned to deal with the world’s economic problems…
12 Aug 2022 Buying the discount
Trusts spent over £1bn on discount control in the first half of 2022…
05 Aug 2022 A trust for a rapidly changing world
Momentum Multi-Asset Value looks well-placed to handle the shocks of 2022…
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...
18 May 2022 Riding out the storm
We look at trusts with tightly governed discounts which may appeal to investors in volatile markets…
18 Mar 2022 A trust for all seasons
MAVT has performed well under duress, will it do the same with some tailwinds working in its favour?
16 Feb 2022 Could inflation give a boost to value?
Momentum Multi-Asset Value may see some upside from higher prices…
19 Jan 2022 Fund Analysis
A ready-made multi-asset portfolio with an attractive yield and a contrarian, value style…
29 Nov 2021 Refined value, resilient performance
The team behind Momentum Multi-Asset Value Trust have stuck to their guns as contrarian value investors in recent years, and the resurgence of value this year has seen this pay off…
13 Oct 2021 Consistency is key
Marking its 25th anniversary, Momentum Multi-Asset Value Trust (MAVT) continues to deliver inflation-beating returns by investing in a highly differentiated range of assets, giving investors access to continually evolving holdings that they are unlikely to find in other funds…
21 Jul 2021 Every which way but loose
We break down the AIC Flexible sector into more useful segments…
12 May 2021 The nuances of value investing
With value stocks continuing their rise, distinguishing between different ‘value’ fund offerings can be challenging. Here, we look at a unique multi-asset value strategy…
26 Apr 2021 Fund Analysis
After a strong 12 months, the managers of the recently renamed MAVT are optimistic on prospects for value...
09 Apr 2021 New look, broader resources, same proven approach
The newly renamed Momentum Multi-Asset Value Trust continues investing in quality value opportunities across different sectors in the UK, with deeper and stronger resources at its disposal…
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...
25 Feb 2021 Flying under the radar
We take a look at SIGT, a trust which is might not spring to mind for UK exposure, but offers flexible and differentiated exposure to any UK recovery…
20 Jan 2021 A trust with hidden depths
We take a look at SIGT, a multi-asset trust offering a solid income from a truly diversified portfolio…
02 Dec 2020 Results analysis: Seneca Global Income & Growth
After a strong six months, we look at SIGT’s outperformance of its benchmark and whether it has the potential to continue to do so going into 2021…
25 Nov 2020 Britannia Redux?
UK equities have been despised for almost five years and could offer extreme rebound potential…
19 Nov 2020 Thinking outside the box
Kepler Trust Intelligence looks at the unique approach to value investing taken by Seneca Global Income & Growth Trust…
06 Oct 2020 It's not about following the herd
With a small number of stocks driving global markets, we discuss how SIGT can be used to aid and diversify returns...
30 Sep 2020 Fund Analysis
Seeking to achieve total returns of CPI +6% p.a., SIGT invests on a multi-asset basis with a value approach...
04 Apr 2017 Getting active...
David Thomas, chief executive at Seneca IM, highlights the benefits of active management and why the team at Seneca Global Income & Growth have a very distinctive value style...
02 Apr 2017 Fund Analysis
A highly-diversified global multi-asset portfolio that aims to generate long-term income and capital growth via a value-driven approach...
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