investmd Posted December 18, 2019 Share Posted December 18, 2019 Looking for advice on investing in GBP. I'm based in Canada and tend to invest in a) equities like BRK, FFH, BAM & b) managers with zero fee partnership structures - Pabrai Funds, Aquamarine, ROMC & Austin Value Capital. My wife has some money in the UK and she wants me to invest it, but she wants investment to stay in British Pounds. Looking for insights from this group of value investors as to what I can purchase in GBP that could compound at 8-15% over several years - equities that I could buy on the FTSE or bright managers in the UK with value add. Could stay consistent with my current theme or diversify. Thanks! Link to comment Share on other sites More sharing options...
kab60 Posted December 18, 2019 Share Posted December 18, 2019 I have positions in Cambria Automobiles, Vertu, Motorpoint, St. James Place and Clipper Logistics. All 20-35 pct above my basis. St. James Place and Clipper Logistics are the highest quality, and unfortunately Clipper might be taken private. If not it might crash and thus be a good opportunity. Cambria and Motorpoint are both quiet good companies, overall I prefer Cambria here due to valuation. Vertu is the lowest quality of my bunch but also cheap, again I would probably go with Cambria here. St. James Place is a quiet terrific business I think but takes a bit more to understand. Headline valuation looks expensive, digging a bit further I think it is cheap for a high ROIC, asset light and steady grower. Link to comment Share on other sites More sharing options...
thepupil Posted December 18, 2019 Share Posted December 18, 2019 You could buy AVI global, the old British Empire Trust*, which is a diversified closed end fund of funds that over time will generate the return of the ACWI ex US +or-, would be diversifying to your other holdings with its emphasizing s on Japanese special situations and discounted funds. It charges 85 bps + the underlyings have fees, so that is a warning and contradictory to your ask, I am more recommending it because it is truly set it and forget it and you’d be investing in the U.K. without really investing in the U.K. the U.K. has an abundance of diversified closed end funds that are of decent scale and charge not entirely egregious fees. https://www.aviglobal.co.uk/content/uploads/2019/11/AVI-Global-Trust-Annual-Report-2019.pdf *why did they ever change that cool name? Foreign & Colonial had to change their name. British Empire Trust did not! Link to comment Share on other sites More sharing options...
SharperDingaan Posted December 18, 2019 Share Posted December 18, 2019 You might want to temporarily just sell the GBP, for US/CAD - and have the currency sent out of the UK. Park the proceeds in US/CAD treasuries, Canada's, GIC's, etc for a year. On maturity, convert back into GBP - and send the currency back into the UK. The expectation being that Brexit devalues GBP, and that the disruption lowers the market values of most UK companies. You get more GBP upon repatriation, and the opportunity to buy the targets for less. And while you are waiting, the funds are not at risk in the UK - and not temporarily subject to any kind of capital control. SD Link to comment Share on other sites More sharing options...
investmd Posted December 18, 2019 Author Share Posted December 18, 2019 Thanks for insights kab60,thepupil & SharperDingaan. thepupil: agree 85basis points seems like for an ETF like fund - happy to pay good fees for good returns - 1-2% annual fees regardless of returns doesn't sit well given how challenging it is to beat the market by >2% SharperDingaan - interesting play you suggest. However, my understanding has been that the worst thing for the UK about Brexit has been the uncertainty. Now that there is a clearer picture that it is going to happen, could the Pound not strengthen? Link to comment Share on other sites More sharing options...
thepupil Posted December 18, 2019 Share Posted December 18, 2019 you could also buy Scottish Mortgage, 37 bps fee, liquid 7 billion pound market cap global growth fund. it's obviously done very well lately given its growthy/techy. I'm more biased to the AVI type of stuff. https://www.bailliegifford.com/en/uk/individual-investors/funds/scottish-mortgage-investment-trust/performance/portfolio/ There's templeton EM fund, for just plain old EM at a slight discount (and higher than ETF fee). F&C for global growth (similar to Scottish Mortgage) Again this falls in the "low cost, liquid, diversified investment in UK without investing in the UK". Here's a list of the UK closed end funds >200mm pound market cap in order of market cap SMT LN Equity SCOTTISH MORTGAGE INV TR PLC FCIT LN Equity F&C INVESTMENT TRUST PLC RCP LN Equity RIT CAPITAL PARTNERS PLC HICL LN Equity HICL INFRASTRUCTURE PLC ATST LN Equity ALLIANCE TRUST PLC 3IN LN Equity 3I INFRASTRUCTURE PLC INPP LN Equity INTERNATIONAL PUBLIC PARTNER UKW LN Equity GREENCOAT UK WIND PLC TRIG LN Equity RENEWABLES INFRASTRUCTURE GR MRC LN Equity MERCANTILE INVESTMENT TRUST MNKS LN Equity MONKS INVESTMENT TRUST PLC PCT LN Equity POLAR CAPITAL TECHNOLOGY TR TEM LN Equity TEMPLETON EMERGING MARKETS-O WTAN LN Equity WITAN INVESTMENT TRUST PLC FGT LN Equity FINSBURY GR&INC TRUST-ORD CLDN LN Equity CALEDONIA INVESTMENTS PLC CTY LN Equity CITY OF LONDON INVESTMENT TR WWH LN Equity WORLDWIDE HEALTHCARE TRUST P SEQI LN Equity SEQUOIA ECONOMIC INFRASTRUCT MYI LN Equity MURRAY INTERNATIONAL TR-O TRY LN Equity TR PROPERTY INVESTMENT TRUST SSON LN Equity SMITHSON INVESTMENT TRUST SYNC LN Equity SYNCONA LTD HVPE LN Equity HARBOURVEST GLOBAL PRIVA BPCR LN Equity BIOPHARMA CREDIT PLC PIN LN Equity PANTHEON INTERNATIONAL PLC ASL LN Equity ABERFORTH SMALLER COS-ORD JMG LN Equity JPMORGAN EMERGING MKTS-ORD FCSS LN Equity FIDELITY CHINA SPECIAL SITUA BNKR LN Equity BANKERS INVESTMENT TRUST GCP LN Equity GCP INFRASTRUCTURE INVESTMEN PNL LN Equity PERSONAL ASSETS TRUST PLC EDIN LN Equity EDINBURGH INVESTMENT TRUST BBGI LN Equity BBGI SICAV SA VEIL LN Equity VIETNAM ENTERPRISE INV LTD-C FEV LN Equity FIDELITY EUROPEAN VALUES PLC HGT LN Equity HGCAPITAL TRUST PLC HRI LN Equity HERALD INVESTMENT TRUST PLC JAM LN Equity JPMORGAN AMERICAN INVEST-ORD TMPL LN Equity TEMPLE BAR INVESTMENT TRUST JEO LN Equity EUROPEAN OPPORTUNITIES TRUST GSS LN Equity GENESIS EMERGING MARKETS BGSC LN Equity BMO GLOBAL SMALLER COMPANIES APAX LN Equity APAX GLOBAL ALPHA LTD AGT LN Equity AVI GLOBAL TRUST PLC OTV2 LN Equity OCTOPUS TITAN VCT PLC BRSC LN Equity BLACKROCK SMALLER COMPANIES HSL LN Equity HENDERSON SMALLER COMPANIES JII LN Equity JPMORGAN INDIAN INV TRUST FSV LN Equity FIDELITY SPECIAL VALUES PLC SDP LN Equity SCHRODER ASIA PACIFIC-ORD JFJ LN Equity JPMORGAN JAPANESE INV. TRUST BGFD LN Equity BAILLIE GIFFORD JAPAN TRUST LWDB LN Equity LAW DEBENTURE CORP PLC-ORD NESF LN Equity NEXTENERGY SOLAR FUND LTD PEY LN Equity PRINCESS PRIV EQTY HOLD LTD PLI LN Equity PERPETUAL INCOME & GROWTH-O FSFL LN Equity FORESIGHT SOLAR FUND PLC ICGT LN Equity ICG ENTERPRISE TRUST PLC SOI LN Equity SCHRODER ORIENTAL INCOME IEM LN Equity IMPAX ENVIRONMENTAL MARKETS BRWM LN Equity BLACKROCK WORLD MINING TRUST TPOU LN Equity THIRD POINT OFFSHORE INVESTM PSSL LN Equity POLLEN STREET SECURED LENDIN SCIN LN Equity SCOTTISH INVESTMENT TRUST BBH LN Equity BB HEALTHCARE TRUST PLC VOF LN Equity VINACAPITAL VIETNAM OPPORTUN SAIN LN Equity SCOTTISH AMERICAN INV COMP JLEN LN Equity JLEN ENVIRONMENTAL ASSETS GR JESC LN Equity JPMORGAN EUR SMALLER COMPANI TFIF LN Equity TWENTYFOUR INCOME FUND LTD MRCH LN Equity MERCHANTS TRUST PLC SLS LN Equity STANDARD LIFE UK SMALLER CO MUT LN Equity MURRAY INCOME TRUST PLC EWI LN Equity EDINBURGH WORLDWIDE INV TR ATT LN Equity ALLIANZ TECHNOLOGY TRUST PLC SLPE LN Equity STANDARD LIFE PRIVATE EQUITY UEM LN Equity UTILICO EMERGING MARKETS TRU OCI LN Equity OAKLEY CAPITAL INVESTMENTS BSIF LN Equity BLUEFIELD SOLAR INCOME FUND DGN LN Equity ASIA DRAGON TRUST PLC BGS LN Equity BAILLIE GIFFORD SHIN NIPPON THRG LN Equity BLACKROCK THROGMORTON TRUST HFEL LN Equity HENDERSON FAR EAST INCOME LT GABI LN Equity GCP ASSET BACKED INCOME FUND CGT LN Equity CAPITAL GEARING TRUST-ORD TRG LN Equity TR EUROPEAN GROWTH TRUST PLC JPGI LN Equity JPMORGAN GLOBAL GROWTH & INC NAS LN Equity NORTH ATLANTIC SMALLER COMP JCH LN Equity JPMORGAN CLAVERHOUSE IT SONG LN Equity HIPGNOSIS SONGS FUND LTD DIG LN Equity DUNEDIN INCOME GROWTH INV TR SIGC LN Equity SHERBORNE INVESTORS GUERNSEY SWEF LN Equity STARWOOD EUROPEAN REAL ESTAT NAIT LN Equity NORTH AMERICAN INCOME TRUST NBLS LN Equity NB GLOBAL FLOATING RATE INC RICA LN Equity RUFFER INVESTMENT COMPANY LD BIOG LN Equity BIOTECH GROWTH TRUST PLC/THE HONY LN Equity HONEYCOMB INVESTMENT TRUST P JEMI LN Equity JPMORGAN GLOBAL EMERGING MKT BHMG LN Equity BH MACRO LTD BUT LN Equity BRUNNER INVESTMENT TRUST PLC EAT LN Equity EUROPEAN ASSETS TRUST PLC LWI LN Equity LOWLAND INVESTMENT COMPANY DIVI LN Equity DIVERSE INCOME TRUST PLC/THE AAIF LN Equity ABERDEEN ASIAN INCOME FUND L ATR LN Equity SCHRODER ASIAN TOTAL RETURN JAI LN Equity JPMORGAN ASIAN INVEST-ORD ADIG LN Equity ABERDEEN DIVERSIFIED INCOME AAS LN Equity ABERDEEN STANDARD ASIA FOCUS BGEU LN Equity BAILLIE GIFFORD EUROPEAN GRO BCI LN Equity BMO CAPITAL & INCOME INVESTM PAC LN Equity PACIFIC ASSETS TRUST PLC BRGE LN Equity BLACKROCK GREATER EUROPE INV BGLF LN Equity BLACKSTONE/GSO LOAN FINANCIN USA LN Equity BAILLIE GIFFORD US GROWTH TR RSE LN Equity RIVERSTONE ENERGY LTD BRFI LN Equity BLACKROCK FRONTIERS INVEST JRS LN Equity JPMORGAN RUSSIAN SECURITIES CCPG LN Equity CVC CREDIT PARTNERS EUROPEAN HINT LN Equity HENDERSON INTERNATIONAL INCO JMF LN Equity JPMORGAN MID CAP INV TRUST SUPP LN Equity SCHRODER UK PUBLIC PRIVATE IIT LN Equity INDEPENDENT INVESTMENT TRUST FAIR LN Equity FAIR OAKS INCOME LTD BHGG LN Equity BH GLOBAL LTD-GBP SHRS BGUK LN Equity BAILLIE GIFFORD UK GROWTH FU SQN LN Equity SQN ASSET FINANCE INCOME FUN FAS LN Equity FIDELITY ASIAN VALUES PLC FEET LN Equity FUNDSMITH EMERGING EQ TRUST PCFT LN Equity POLAR CAPITAL GLOBAL FINANCI SST LN Equity SCOTTISH ORIENTAL SMALL COS PCGH LN Equity POLAR CAPITAL GLOBAL HEALTHC ANII LN Equity ABERDEEN NEW INDIA INVESTMEN ABD LN Equity ABERDEEN NEW DAWN INV TRUST HEFT LN Equity HENDERSON EUROPEAN FOCUS TRU LTI LN Equity LINDSELL TRAIN INV TRUST TIGT LN Equity TROY INCOME & GROWTH TR BPET LN Equity BMO PRIVATE EQUITY TRUST-O AEMC LN Equity ABERDEEN EMERGING MARKETS IN JPE LN Equity JPMORGAN ELECT PLC-MGD GRWTH SHIP LN Equity TUFTON OCEANIC ASSETS LTD MWY LN Equity MID WYND INTERNATIONAL IT TORO LN Equity CHENAVARI TORO INCOME FUND L NCYF LN Equity CQS NEW CITY HIGH YIELD FUND HNE LN Equity HENDERSON EUROTRUST PLC-ORD JPEL LN Equity JPEL PRIVATE EQUITY LTD SJG LN Equity SCHRODER JAPAN GROWTH FUND MNP LN Equity MARTIN CURRIE GLOBAL PORT HHI LN Equity HENDERSON HIGH INCOME TR-ORD JZCP LN Equity JZ CAPITAL PARTNERS LTD IBT LN Equity INTERNATIONAL BIOTECHNOLOGY JMC LN Equity JPMORGAN CHINESE-ORD VSL LN Equity VPC SPECIALTY LENDING INVEST JPS LN Equity JPMORGAN JAPAN SMALLER CO TR MTU LN Equity MONTANARO UK SMALLER COS INV SCRF LN Equity SME CREDIT REALISATION FUND KIT LN Equity KEYSTONE INVESTMENT TRUST FJV LN Equity FIDELITY JAPAN TRUST PLC JMI LN Equity JPMORGAN SMALLER COSIT PLC SCP LN Equity SCHRODER UK MID CAP FUND PLC UTL LN Equity UIL LTD CCJI LN Equity CC JAPAN INCOME & GROWTH TRU STS LN Equity SECURITIES TRUST OF SCOTLAND SCF LN Equity SCHRODER INCOME GROWTH FUND WPC LN Equity WITAN PACIFIC INVESTMENT TR USF LN Equity US SOLAR FUND PLC Link to comment Share on other sites More sharing options...
SharperDingaan Posted December 18, 2019 Share Posted December 18, 2019 SharperDingaan - interesting play you suggest. However, my understanding has been that the worst thing for the UK about Brexit has been the uncertainty. Now that there is a clearer picture that it is going to happen, could the Pound not strengthen? One month after Brexit, would you expect GBP to continue trading at a premium to the Euro?, as it does now, Or is it more likely that GBP trades at a discount to the Euro? - to promote badly needed trade, and the jobs that go with them. The current premium is approximately 9%. If it swings to an equal but opposite discount, it implies an 18% devaluation in GBP Devaluations typically occur over time, the populace often doesn't realize the significance, and 18% is relatively mild. If you have the ability, they should be taken advantage of. About once/decade the CAD/US FX rate becomes < 1.0000, versus the more 'normal' 1.3200 -1.3500 range; routine periodic trade based appreciation/devaluation of roughly 32-35%. Just a different POV. SD Link to comment Share on other sites More sharing options...
cameronfen Posted December 18, 2019 Share Posted December 18, 2019 SharperDingaan - interesting play you suggest. However, my understanding has been that the worst thing for the UK about Brexit has been the uncertainty. Now that there is a clearer picture that it is going to happen, could the Pound not strengthen? One month after Brexit, would you expect GBP to continue trading at a premium to the Euro?, as it does now, Or is it more likely that GBP trades at a discount to the Euro? - to promote badly needed trade, and the jobs that go with them. The current premium is approximately 9%. If it swings to an equal but opposite discount, it implies an 18% devaluation in GBP Devaluations typically occur over time, the populace often doesn't realize the significance, and 18% is relatively mild. If you have the ability, they should be taken advantage of. About once/decade the CAD/US FX rate becomes < 1.0000, versus the more 'normal' 1.3200 -1.3500 range; routine periodic trade based appreciation/devaluation of roughly 32-35%. Just a different POV. SD I don’t think premium or discount is the right thing to look at. What you really want is PPP adjusted premium or discount. For example I can always add or subtract 3 zeros on or off the British Pound and change UK prices by the same amount and nothing would change but the UK/Euro would swing to a premium or discount. Not sure what your analysis would be if you adjusted for PPP though... Link to comment Share on other sites More sharing options...
SharperDingaan Posted December 18, 2019 Share Posted December 18, 2019 PPP is a long term measure, and ASSUMES no further changes. Brexit is a continuous application with extreme change. A more practical independent measure is the 'Big Mac' Index, which is often closer to current FX values. https://www.bigmacindexconverter.com/ Plug in the numbers for GBP and Euro. GBP is at a premium to the Euro of ((100/91.26)-1)x100, or 9.6% About the same as the current GBP/Euro FX rate. SD Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now