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magazineBritish Empire Trust can still strike back
BRITISH EMPIRE TRUST (BTEM) 728p
Loss to date: 4%
Original entry price: Buy at 758p, 24 May 2018
Despite a year-to-date rebound, our ‘buy’ call on British Empire Trust (BTEM) is modestly in the red. We remain convinced the trust offers investors plenty of value, both within the underlying assets of the portfolio and with the shares trading at a 9.4% discount to NAV (net asset value).
Joe Bauernfreund-managed British Empire aims to achieve long term absolute returns by investing in undervalued assets. Since Bauernfreund took sole responsibility for the portfolio in 2015, he has concentrated the portfolio, sharpened the focus on ideas with an identifiable re-rating catalyst and is seeing opportunities with attractive discounts.
British Empire is a useful portfolio diversifier given the idiosyncratic nature of the strategy and the ‘very different return drivers’ from many of its peers, according to research group Kepler.
Kepler argues the underlying holdings of each investee fund are often ‘highly diversified’, meaning the portfolio isn’t as concentrated as it looks.
It points out that ‘the discount remains wide both in absolute terms, but also relative to other investment trusts’.
SHARES SAYS: Value investors should stick with British Empire Trust at 728p with Bauernfreund continuing to
find bargains and given significant re-rating scope.
Important information:
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell.
Shares is provided for your general information and use and is not a personal recommendation to invest. It is not intended to be relied upon by you in making or not making any investment decisions. The investments referred to in these articles will not be suitable for all investors. If in doubt please seek appropriate independent financial advice.
Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.
