October 2017 – Trades, Tips and Funds

Today’s post is another in the series of monthly roundups of the interesting investing tips I’ve come across, plus a summary of any trades that I make. Welcome to October 2017.

Trades

My trades this month have largely focused around tidying up the SmallCap Growth AIM portfolio (SGAP) in the wake of the IHT AIM portfolio I put together last month.

• I don’t want to hold the same stocks in both portfolios, if I can help it.

There’s a separate set of articles explaining the process I followed, but they haven’t been published yet.

Below is the list of trades that I have made so far:

• Sells – SGI, ANCR, CRAW, PGH, BRK, BRY, MANX, FIF, LTHM, JHD, DTG, ASY
• Buys – NEXS, HAT, NWF, SPSY, JIM, IGR

I’ve also started putting together a global defensive portfolio to offset the IHT portfolio.

I’ve bought three investment trusts for that one:

1. RICA – Ruffer Investment Company
2. RCP – RIT Capital Partners
3. CGT – Capital Gearing Trust

So that’s twenty-one trades in October.

Tips

Mike Tubbs looked at the firms behind the next generation of anti-cancer drugs.

• Unfortunately, none of the nine companies he mentioned are UK-listed, so I think I’ll stick to the biotech investment trusts.

Richard Beddard recommended that investors avoid IPOs, and stick instead with proven stock-market aristocrats.

He chose thirteen companies in all:

1. Unilever (ULVR)
2. Johnson Matthey (JMAT)
3. Next (NXT)
4. Vp (VP)
5. Portmeirion (PMP)
6. Smiths Group (SMIN)
7. Daily Mail (DMGT)
8. Taylor Wimpey (TW)
9. Associated British Engineering (ASBE)
10. Tate & Lyle (TATE)
11. Elecosoft (ELCO)
12. Volex (VLX)
13. Inch Kenneth Kajang Rubber (IKK)

Over on Research Tree, James Rippon had a good article about the production and economics of lithium.

• He included four stocks to watch in that space.
• The only pure play was Bacanora Minerals (BCN), which is already on our list of Exposure Stocks.

But the other three companies might be of interest to some readers:

1. Savannah Resources (SAV)
2. Kodal Minerals (KOD)
3. European Metal Holding (EMH)

Funds

Jonathan Compton looked at how to profit from the fact that the world is getting fatter.

• He mentioned two UK-listed funds and three UK stocks, but I’ve decided to file his article under funds.

The two funds were:

1. Lyxor MSCI World Health Care ETF (HLTG), which I’ve added to our list of exposure stocks, and
2. Worldwide Healthcare Trust (WWH), which is already on our list of Investment Trusts.

The three stocks were:

1. AstraZeneca (AZN)
2. Smith & Nephew (SN), and
3. Britvic (BVIC)

Max King also looked at healthcare trusts.

• His top tip was Worldwide Healthcare Trust, which is already on our IT list.

He also mentions the Biotech Growth Trust (BIOG), Polar Capital Healthcare Trust (PCGH) and the BB Healthcare Trust (BBH).

• All three were already on our list.

Matthew Partridge wrote about activist funds, but we had already come across the two UK-listed funds that he mentioned:

1. Crystal Amber (CRS), listed under the hedge fund section of the investment trust list, and
2. Gabelli Value Plus+ Trust (GVP), listed under the US section of the list since it has a geographical focus.

There’s also a US listed ETF that tracks 50 activist hedge funds – Global X Guru Activist ETF (ACTX on Nasdaq).

Nick Sudbury recommended the Fidelity Special Values trust (FSV).

• This is a turnaround specialist that was already on our list.

Nick also looked at small-cap funds and came up with five:

1. Blackrock Smaller Companies (BRSC)
2. River & Mercantile UK Micro Cap (RMMC)
3. Aberforth Smaller Companies (ASL)
4. Standard Life UK Smaller Companies (SLS)
5. Henderson Smaller Companies (HSL)

All of these were already on our list.

David Stevenson announced in MoneyWeek that he’ll be putting together two income portfolios in the coming months.

• He thinks that interest rates will remain low (below the long-term normal of 5%), with even the US struggling to get past 2.5% before the next recession.

He plans to diversify so that not all the assets will be vulnerable to the same risks (for example rising interest rates).

• There will be a mix of sovereign and corporate borrowers, and there will also be international diversification.
• But he will look for international assets that pay sterling dividends, in order to reduce FX risk.

These are the two portfolios he has planned:

1. The balanced portfolio will target 4.5% pa, with underlying investments in the range between 3.5% and 5.5% pa.
   • They will be unit trusts and ETFs.
2. The adventurous portfolio will target 5.5% pa, with underlying investments in the range between 4.5% and 6.5% pa.
   • These will be less liquid instruments, including complex investment trusts and corporate / retail bonds.
   • They will be less vulnerable to rising interest rates, but could be more volatile.

I’ll keep you posted as the portfolios develop.

That’s it for today.

• It’s been a little bit frustrating, as almost every trust we found was already on our lists.
• With the “glass half full” hat on, you could say that means that the lists are pretty good.

Until next time