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To achieve capital appreciation by investing in small quoted companies listed on the LSE or traded on AIM and to achieve relative outperformance of its benchmark, The Numis Smaller Companies Index.
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Phyl, I am helping my children build their respective SIPP accounts and have bought a few moments ago 670 shares for elder son. It is correctly showing as a buy.
It is very difficult to know when to buy shares directly in equities when the long haul of building a portfolio starts and sometimes it is better to use an investment trust. There are 2 direct holdings in his portfolio - both blue chips (RDSB and LGEN) - but the remaining 3 holdings are Investment Trusts. I've tried to balance the monetary values of these evenly.
With professional press suggesting that investors are likely to enjoy the greatest growth from UK markets, my reasoning for an investment in MTU is that smaller companies are more sensitive to market changes than large ones so there is a greater chance of growth.
Once the capital value of the SIPP reaches £10,000, it is likely that a third direct holdings will be purchased, again a blue chip but he is at least a couple of years away from such event unless something very spectacular happens.
My purchase today is showing as a sell.
May (for me) has always been an exciting month with wild and ramdom swings in prices in indvidual holdings that mirror the weather. Overall, the result measured in terms of wealth invested has usually been to end the month little changed from the start. And this year is no different. 6% movement for some holdings on a daily basis in the absence of news has been a common feature.
This week I have been up on the hills above our home looking at timber. We had mist, bright sunshine, hail, snow, drizzle, fog strong wind and sunshine on Monday with a 20 degree range of temperatures, from -3 to 17 and settled at 14.
Tuesday had fine start that deteriorated to sleet and thunder followed by warmth and sunshine as the day wore on and today after a misty start there was no wind and temperature rose to 18.
My investments have pretty well mirrored the turbulent times. For those of a certain vintage, perhaps you will remember the late Bob Beckman who gave a morning roundup on LBC in the 1970's..... The market is behaving like an elevator with a lunatic at the controls.
Has anything really changed?
Hi Alas, I'm currently 8% up with MTU. I only wish the same could be said for my SIPP investments! To be fair, I'm still up but my BG American & Global Discovery funds are sliding into negative territory as is my JPM Japanese trust. I've also recently invested in VMID & that's 6% up so the UK based funds are doing ok. I agree with you the stronger companies will get stronger at the expense of weaker ones. My gut feel is that the markets (mostly!) are trading far to high considering the climate almost euphoric in fact & my concern is the bubble will burst. Hope not but it's a real possibility. I'm thinking about retirement in this next year or two so could do with some growth coming through on my portfolio! Anyhow, I think MTU will continue to go from strength to strength & now considering this for my SIPP as I've been encouraged by its performance so far.
Phyl, I've been around a good many decades in building my portfolio making plenty of errors in that time. Although I have only really seen recessions from the late 1970's, a global pandemic that has lasted not just 18 months, but also still has many countries in its grip is unfamiliar to all of us.
My gut feeling is that there is going to be a trigger point when those companies that do survive are going to rise very strongly and other areas that are overheated are likely to fall equally dramatically. I am very worried about the residential property market - way out of control with lending above that in 2008 and continuing to rise that has been fuelled with low interest rates and re-ignited with Stamp Duty breaks. I'm preparing to put our primary residence on the market with a fancy price tag and move into the apartments above our offices.
Businesses that fail are sometimes quite good for economies - it improves the prospects for those that survive and allows for the hiring of the best former employees. The Government seem more optimistic as Covid 19 is currently under control in the UK so their focus will be on re-building the economy that was deliberately trashed. Economic growth of 7% might mean interest rates rise - bad for housing but good for savers. All a balancing act, but I am very optimistic for an improving summer and strong return for the remainder of the year. We appear to be at a turning point after a difficult year so far with many false starts in individual stock picks.
Hi Alas, just bought into MTU myself this past week on the same basis as you. Only 700 shares for my ISA but considering also for my SIPP. This trust appears to be just as opportunistic as any other. I'm slightly up as I write although the SP is a tad lower so far today.
I've taken the opportunity to buy 1,000 shares this morning for elder son in his ISA. As those of influence in Goldman Sachs and other substantial players believe that there is likely to be better growth in UK and especially in smaller companies, it makes sense to have exposure through a broad and well managed IT.
Of course, I am a little biased in that I hold shares for self in a tiny dealing account and my SIPP, for my wife in her SIPP and for my wife in her ISA.
oldandtired/ well that's the discount well and truly eliminated . glad I held on.....wavered a few times .prospects for the sector should be improving now Brexit looks like a resolution in sight
There is a good post on advfn today about mtu (reproduced below).
The company is taking no steps whatsoever to address the huge discount (over 21% today) at which mtu trades. This is the biggest discount in the smaller companies sector. The discounts of other smaller companies have fallen significantly over the last 18 months but mtu's discount has stayed stubbornly high. Mtu's nav has actually outperformed the sector over the last year.
The company has a number of options to reduce the discount:
1. Convert to a unit trust or oeic.
2. A tender offer to buy back some shares at say a 5% discount to nav. This will increase the nav for the remaining shares and allow investors to get out at a decent price.
3. Announce that they will set a maxiumum target for the discount of say 10% by buying shares in the market and cancelling them. This will also increase the nav for the remaining shares.
If you think the company will take any of these steps, the shares are a raging buy. The shares are probably a buy anyway if the discount shrinks close to the average for smaller company investment trusts. This might actually happen anyway because of reversion to the mean.