Manager's Comment for February 2015
Strong performance across most of our geographic universe has once again been offset by the strength of Sterling, which continued to rise against most developed market currencies. There were strong performances in local currency terms from a number of holdings. Hudson’s Bay in Canada jumped 20% over the month, as it announced two transactions as part of their strategy to unlock value from their extensive property assets. This comes on top of a rise in price in November 2014 on the news of a revaluation of their 5th Avenue, New York store. Initiatives by management to narrow the gap at which the company trades relative to its NAV have led to a 57% increase in share price thus far this financial year.
The biggest detractor from performance was Hitachi, although part of the overall loss was offset by the currency hedge on the Yen, which weakened against Sterling by 4.8% over the month. Investors reacted negatively to Hitachi’s Q3 results as earnings fell short of plan in one of its key divisions, which caused some concern over the ability of management to continue to deliver on its growth plans. It is trading on a discount to its sum of the parts of c. 25% and on a low earnings multiple of c. 12x and we think the shares should recover.
Cash at month end was 8.2% and the weighted average discount on the portfolio was 24.5%.
Retail Investors advised by IFAs
The Company currently conducts its affairs so that its shares can be recommended by Independent Financial Advisers (“IFAs”) in the UK to ordinary retail investors in accordance with the Financial Conduct Authority (“FCA”) rules in relation to non-mainstream investment products and intends to continue to do so. The shares are excluded from the FCA’s restrictions which apply to non-mainstream investment products because they are shares in an authorised investment trust.
British Empire Securities and General Trust plc
British Empire Securities and General Trust p.l.c. (British Empire) is a closed-end investment trust with shares listed on the London Stock Exchange in the FTSE 250 Index. The investment objective is to achieve capital growth through a focused portfolio of investments, particularly in companies whose share prices stand at a discount to estimated underlying net asset value. British Empire shares can be purchased and held in a Stocks & Shares ISA or a Share Saving scheme through the investment managers, Asset Value Investors.
Asset Value Investors is an employee owned management company founded in 1985 to manage the assets of British Empire, which was a £6 million trust at that time. Today, British Empire has assets of over £856* million and is managed by John Pennink and Joe Bauernfreund.
- Newsletter March 2015
- Newsletter February 2015
- Newsletter January 2015
- Newsletter December 2014
- Half Year Report 2014
- Annual Report 2013
- Brochure Stocks & Shares ISA/Share Plan
- Key Features ISA/Share plan
- AIFMD Investor Disclosure Document
Price Performance December 2003 to December 2013 †
How a typical investment of £7,200 performed over the last five years ‡
British Empire Securities and General Trust has had an average annual NAV total return of 12.2%* since 1985.