Short positions... more criticism for Chrysalis

⬛ Analysts have “derided” the move by the Jupiter-run Chrysalis Investments trust to buy shares in Starling Bank that were being sold by Jupiter open-ended funds, says Investors’ Chronicle. Starling was already Chrysalis’s thirdlargest investment and the £20m of shares that it’s buying will take its stake to 15% of net asset value (NAV) – one of the larger single-stock holdings among investment trusts, say analysts at Winterflood. This presents “a risk which investors should monitor closely, particularly given [Starling’s] youth, single-country exposure and vibrant competitive landscape”. Analysts at Stifel cut their rating on Chrysalis from “hold” to “sell”, saying that “our main concern is the limited cash that Chrysalis has on its balance sheet”. The Starling purchase and other followon investments will reduce cash to 4% of NAV, Stifel estimates. ”We think this is a low cushion as we do not know how much cash existing companies may need in the next year or two.” ⬛ More than £19bn of money is sitting in funds that have consistently lagged their benchmarks – almost twice as much as six months ago, says The Times. The latest “Spot the Dog” report from investment platform Bestinvest shows that 44 funds have lagged their sector for three successive 12-month periods and trailed by at least 5% overall, up from 31 in June. “There were six funds with more than £1bn of investors’ cash on the list, some of which have been there for a long time.” Halifax UK Growth, Scottish Widows UK Growth and Halifax UK Equity Income funds, all managed by Schroders for Lloyds Banking Group, accounted for £7.2bn of the total. Schroders has run these since April 2020 and “investors can legitimately ask why the funds show no signs of turning around”, says Bestinvest.