Last checked at 14 Mar 2022 07:00
London, UK, 14 March 2022
Edison issues review on Premier Miton Global Renewables Trust (PMGR)
Premier Miton Global Renewables Trust (PMGR) has reported a strong performance for FY21 (to 31 December), with NAV and share price total returns of 19.8% and 30.7% respectively, compared with a 22.5% decline in its new benchmark, the S&P Global Clean Energy Index. The divergence is largely down to PMGR's greater exposure to generation and distribution, in a year when capital goods and technology companies struggled against a backdrop of higher input costs and deteriorating investor sentiment. Manager James Smith points to Chinese exposure and UK 'yieldcos' as points of interest, given China's push towards greater self-reliance, and the attractive inflation-linked revenues and high yields on offer in the UK.
PMGR's pivot from a broad utilities mandate to a focus on renewable energy has been beneficial for shareholders in the past three years, with manager James Smith's bottom-up and valuation-aware investment process feeding into a global portfolio of assets that should benefit from the current power price environment as well as the push towards energy security and net zero emissions. The dividend has been rebased to a lower level as a result of the smaller pool of total assets following the ZDP rollover in late 2020, but the FY21 dividend was fully covered by income and has scope to grow. Although the fund is small and highly geared (both of which may be seen in a negative light by potential investors), we see the current 17.5% discount to NAV as unwarrantedly wide given the trust's strong performance record under its refreshed mandate.
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