Fund Profile

Disclaimer

Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by Gabelli Value Plus+. 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
Gabelli Value Plus offers exposure to value opportunities in US stocks trading at a discount to their value to an informed buyer...
Overview

Gabelli Value Plus+ (GVP) aims to achieve strong total returns through investment in a portfolio primarily of US equities. Managed by GAMCO, GVP utilises a disciplined proprietary investment philosophy known as Private Market Value with a Catalyst™.

As we discuss under portfolio, this investment process focuses on both the intrinsic value and strategic premium that a company offers to a potential informed buyer. The team of over 40 analysts look to evaluate and understand stocks from a bottom-up perspective, and identify such opportunities where they also believe there exists a catalyst to drive this value realisation.

A continuation vote will take place on 30/07/2020, and shareholder votes must be submitted before 28/07/2020.

If the shareholders vote in favour of continuation, it is proposed that the trust could adopt new policies regarding an enhanced dividend payout, as we discuss under the Dividend section. This would significantly enhance the levels of distributions were it to be adopted.

Similarly, proposals supporting continuation suggest a lower management fee be adopted (see Charges), and that buybacks be undertaken if the discount exceeds 10%. As we detail under Discount, the board in the previous financial year had in any event tended to support the share price with buybacks when the discount widened past this level.

Performance has been undoubtedly challenging, with both the small cap and value factors, which the trust’s process inherently lends itself to, facing severe headwinds over most of the period since the trust’s launch. As we note under the Performance section, changes in inflation expectations will likely continue to support or weigh on near-term returns.

Analyst's View

If the concern of shareholders pushing for a wind-up is over performance, this is understandable looking backwards. However, looking backwards is probably not optimal for understanding prospects for returns. GVP has operated in an environment where stock leadership has been increasingly narrow, and increasingly amongst the largest companies. Some factors, such as the rise of passive investing, have helped contribute to this of course, as has the perception of a move to a ‘new normal’ in the wake of the Covid-19 pandemic and policy.

The question for shareholders is whether and to what extent these factors will persist indefinitely. As we have suggested here, it may be too soon to expect a durable recovery in small caps yet, and further patience may be required. And a higher discount rate (i.e. higher nominal interest rates) would, in our view, potentially help to catalyse and initiate a sustained value recovery. But just because an imminent reversal may not be in the offing (and the word ‘may’ is pertinent here), this does not necessarily mean there does not remain a long-term case for allocation to small-cap value. We would suggest that ultimately US economic dynamism may indeed depend on such a reversal to the favour of smaller companies, and will ultimately require higher interest rates. ‘Should’ is, of course, not the same as ‘will’. But the continued outperformance of large-caps to perpetuity is ultimately likely unsustainable within the current social contract.

bull bear
Should benefit if inflation materialises Near-term headwinds to smaller companies likely remain
More immediate value realisation potential if trust discontinued, likely favourable dividend policy if not If vote is in favour of continuation, several large shareholders will likely look to exit weighing upon the discount
Differentiated portfolio and returns profile to typical US equity vehicle Challenges to relative returns from market structure remain
Continue to Portfolio

Fund History

22 Apr 2021 FAANGs for the memories
The massive outperformance of mega-cap tech last year could become a thing of the past if anti-trust legislation and negative sentiment starts to bite...
23 Jul 2020 Fund Analysis
Gabelli Value Plus offers exposure to value opportunities in US stocks trading at a discount to their value to an informed buyer...
14 May 2020 Sea change
While global giants like Amazon still hold the weather gauge, we examine the long term prospects for a shift in the prevailing wind...
13 Feb 2020 Choose your own adventure
Predicting the future is impossible, but identifying which trends have coincided in the past can give us clues about what may be to come...
06 Nov 2019 Times are a changin'? The case for a value resurgence
We are in the midst of the longest period of value underperformance since the 1920s. Could we be approaching a change in environment?
28 Aug 2019 Fund Analysis
An increasingly high conviction approach has seen the number of holdings fall at this US focused trust...
19 Sep 2018 Fund Analysis
Gabelli Value Plus+ Trust is a US equity trust differentiated through its active focus on undervalued companies across the market cap spectrum...
19 Sep 2018 Artificial Alpha
While there are some signs that we may be finally seeing the froth come off the growth-led market, we think investors need to be highly selective in choosing value strategies...
29 Jan 2018 Fund Analysis
A US equity trust managed by a highly-experienced team which has a long-term track record of delivering strong relative and absolute returns...
29 Jan 2018 What lies beneath
Following our research last year, we analyse the correlation between the performance of value stocks and bond yields and how many investors are unprepared for a change to the status quo...
29 Jun 2017 Brave new world
We find out how the outlook appears today to you, and ask the top managers in each sector, region and asset class where they see the opportunities in it...
21 Jun 2017 Fund Analysis
A newly launched but highly-differentiated US equity trust, run by an experienced investment team with a tried and tested value process...
28 Feb 2017 Don’t wanna be an American idiot…
After such a chaotic start to Donald Trump's presidency, we look at potential options for investors in the US equity space...
27 Feb 2017 Expert view: What next for the USA?
BlackRock North American Income fund manager Tony DeSpirito thinks we are entering a pro-growth environment...
26 Jan 2017 Value: The dawn of a new era?
Amid much speculation that the 'value' style of investing is making comeback, our research shows that the style has previously performed better during bond market sell-offs...
View all

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