Canadian General Investments (CGI) £21.94

Gain to date: 2.4%

We flagged an opportunity to get into this North American-focused investment trust, which is listed in both the UK and Canada, at a big discount in April 2024 citing its impressive long-term track record and the nous of its manager  Greg Eckle.

WHAT’S HAPPENED SINCE WE SAID TO BUY?

In share price terms, not a lot really as the stock is just a smidge higher than where we flagged its appeal. However, given some intervening volatility in the wider financial markets that’s nothing to sniff at and the trust’s latest results (6 August) revealed NAV (net asset value) growth came in ahead of the benchmark so far for 2024.

Year-to-date NAV returns were 18.6% versus 12.3% for the S&P/TSX Composite Index as of 31 July. As well as Canadian firms, the company has holdings in tech giants Nvidia (NVDA:NASDAQ), Apple (AAPL:NASDAQ) and Amazon (AMZN:NASDAQ) so the portfolio may have suffered a bit of damage since the end of July. 

Established in 1930 and run by Toronto-based Morgan Meighen & Associates since 1956, the trust flags that for the 50 years to December 2023, a $10,000 investment in CGI would have grown to almost $2.3 million, representing a compound average annual return of 11.5% versus the benchmark results of $831,000 and 9.2% respectively over the same period.

WHAT SHOULD INVESTORS DO NOW?

We remain convinced the near-40% discount to NAV should eventually narrow at this trust, at least to its more typical level of around 30%, despite its inability to buy back shares and a concentrated shareholder base which puts some constraints on liquidity.

The manager and the trust have a strong record over the long term and Canada’s merits as an investment destination are still underappreciated given its abundant natural resources, strong financial sector and emerging technology space. 

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