An Investment Trust as an alternative to a Unit Linked fund?

[Brendan Burgess]

The [broken link removed]is trading at a 20% discount to Net Asset Value.

This looks like an interesting way to get exposure to Irish shares as an alternative to an unit-linked fund or to the ISEQ ETF.

As an Investment Trust, it is traded like an ordinary share, so any gains or losses are subject to CGT.

It could well be wound up if the discount remains at 20%, leaving a one off return to the investors.

I gather that the fund management charge is 0.7%.

It is actively managed as distinct from a tracker, so that would put up the running costs.

Its portfolio is very well diversified:

CRH 12%
Total Produce: 6%
Dragon Oil 6%
DCC 5%
Bank of Ireland 5%
Fyffes 6%
FBD 5%
Andor 5%
Grafton 5%
AIB 5%

 

[Monksfield]

The Gartmore Fund has a very strong track record and in terms of Net Asset Value (all the fund manager is responsible for) it has been well ahead of the ISEQ over most periods.It was originally a Smaller Companies fund,which will have impaired comparison with the ISEQ.

Gervais Williams has been managing the fund for many years and has done an excellent job.I think the Gartmore Fund has been a well kept secret for the same reason as ETFs - no intermediary remuneration.

From a tax point of view it makes a very small distribution ( just as well as marginal tax rate applies).The fact that CGT applies may make this significantly more tax efficient for many people than the gross roll up regime on unit-linked funds and unit trusts.That is because most people have at this stage got substantial capital losses on bank shares etc which they can use to shield future gains.

I have been invested in the fund for a long time but have no other connection to Gartmore or any other reason to recommend it.