Weekly wrap: Abrdn Property Income Trust, August’s movers

The City is traditionally quiet during the summer and last week there was no significant investment trust news to report. This week we have an update on an Abrdn property fund and some stats on the performance of trusts so far this month.

Abrdn Property Income Trust updates on wind-up

The trust announced in May its intention to wind itself up and return the proceeds to shareholders. It has already sold some assets but last week said it was assessing the potential for selling most of the rest of the portfolio in a single transaction. ‘It is likely that such a sale, were it to take place, would be at a discount to the NAV [net asset value], reflecting the value of a more immediate return of capital and the reduction of risk associated with individual sales over a longer period,’ it said in a stock exchange announcement. The shares currently trade at a discount of 25% to the most recent NAV. The announcement added: ‘There can be no certainty that a portfolio sale can be achieved on acceptable terms. The board will keep shareholders informed.’

Trusts struggle amid market turmoil

Markets have been volatile so far this month and investment trusts have been caught up in the volatility, which was sparked by a combination of an interest rate rise in Japan, fears that America’s central bank was leaving it too late to cut its interest rates and perhaps thin trading over the summer, which can exaggerate the impact of sudden changes in sentiment.

‘Very few equity trusts are in positive territory since 31 July,’ Numis, the broker, said in a note to clients on Monday. ‘Share price performance reflected overall market sentiment, with NAV performance, rather than discount movements, being the major driver of returns.’

It said ‘numerous’ trusts with exposure to Japan, smaller companies (both in Britain and globally) and technology were among the weakest performers. The worst performer was Geiger Counter, which invests in uranium assets; its shares have fallen by 12% and its NAV by 18.8% so far this month. CC Japan Income & Growth has lost 10.8% in share price terms and Lindsell Train 9.3%. Five Japan trusts, Fidelity Japan (–9.1%), Baillie Gifford Japanese (–8.7%), Schroder Japan (–8.6%), AVI Japan Opportunity (–8.3%) and Baillie Gifford Shin Nippon (–8.3%), come next.

Among the risers, Ruffer Investment Company, a ‘wealth preservation’ fund, has produced the best gain, a 4% increase in its share price since July 31, Numis said. Its NAV gained 4.6% over the same period. Global Opportunities Trust, whose share price rose by 3.4%, benefited from having a third of its portfolio in cash. Other defensive multi-asset trusts, such as Personal Assets and Capital Gearing, have also been resilient, as have several equity income funds. Shares in Invesco Global Equity Income, for example, rose by 3.6%.

Figures to 12.8.24. Share prices changes are in total return terms.

Important information - investors should note that the views expressed may no longer be current and may have already been acted upon. Before investing, please read the relevant key information document which contains important information about each investment trust. The shares in these investment trusts are listed on the London Stock Exchange and their price is affected by supply and demand. Investment trusts can gain additional exposure to the market, known as gearing, potentially increasing volatility. Overseas investments will be affected by movements in currency exchange rates. Reference to specific securities should not be construed as a recommendation to buy or sell these securities and is included for the purposes of illustration only. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.