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Reaffirming Ratings on 3 Investment Trusts

Morningstar's closed-end fund team has reaffirmed its ratings on three investment trusts

Alanna Petroff 20 November, 2012 | 10:00AM

Morningstar's closed-end fund analysts have recently updated their research and reaffirmed their ratings on three investment trusts. Each of the trusts have market capitalisations above £100 million.

Martin Currie Global Portfolio (MNP)
Rating: Silver

This Silver-rated trust is currently trading as a very slim discount, indicating that investors like what they are seeing at the trust.

"Overall, we think there’s much to like here: an experienced manager supported by a talented pool of analysts; a board that’s committed to keeping the discount in the single digits; and an effective process that’s delivered strong returns," explains Morningstar analyst Szymon Idzikowski in his latest research report.

To see the latest research on this trust, click here.

Martin Currie Pacific Trust (MCP)
Rating: Neutral

Investors seem to be rather uncertain about future prospects for the Martin Currie Pacific Trust, as indicated through its wide discount. While Morningstar analysts have reaffirmed their Neutral rating, there are several features that they like about this fund.

"We like what we have seen so far at Martin Currie Pacific, but it’s still very early days," said Idzikowski in his latest research report. "The management pair of Andrew Graham and Paul Danes has been in charge only since May 2011. Further, they’re both relatively new to Martin Currie—Graham more so than Danes—and this is their first time running a fund together. It’s also their first time at an investment trust. Graham’s prior years running Asian and Japanese hedge funds at Sofaer Global Research gives us some comfort, as it means that the use of gearing shouldn’t faze him. However, gearing hasn’t been in use here since 2008 when the previous manager John Millar reduced risk leading into the financial crisis." 

To see the latest research on this trust, click here.

Securities Trust of Scotland (STS)
Rating: Bronze

Morningstar analysts believe the Securities Trust of Scotland has a bright future ahead of it, in part because of the trust's new manager, Alan Porter, and its investment team.

"Porter may be a new face at this fund and at Martin Currie, but he’s been analysing companies for two decades," said Idzikowski in his latest research report. "That said, we are a little cautious as this is his first time in charge of a global equity-income mandate, and also of an investment trust. But he’s well supported by a strong team of both investment managers and global sector specialists, of whom we have a high opinion.

To see the latest research on this trust, click here.

Morningstar's analyst ratings for funds and investment trusts range from Gold to Negative. The ratings indicate whether Morningstar analysts are optimistic about a fund’s/trust's future performance. A Gold rating indicates Morningstar analysts think highly of a fund/trust and expect it to outperform its peers and relevant index over a full market cycle of at least five years. Silver and Bronze ratings also indicate positive sentiment from Morningstar analysts. A Neutral rating indicates that Morningstar analysts believe a fund/trust isn’t likely to deliver standout returns but also isn’t likely to significantly underperform. A Negative rating indicates Morningstar analysts believe the fund/trust is inferior compared to its peers and has at least one flaw that is likely to significantly hamper future performance.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Securities Mentioned in Article
Security NamePriceChange (%)Morningstar
Rating
Martin Currie Global Portfolio Investment Trust167.00 GBX0.45
Martin Currie Pacific Trust Plc279.00 GBX-1.15
Securities Trust of Scotland plc142.75 GBX0.53
About Author Alanna Petroff

Alanna Petroff  is a financial journalist with Morningstar UK.