Currencies

Ecofin Global Utilities & Infrastructure trades at a discount that seems to reflect its history rather than current prospects

Buy

THIS column has noted several times the “hangover” effect at certain investment trusts: discounts lingering even after the disappearance of the circumstances that gave rise to them.

In other words, the fundamentals may have moved on but the share price hasn’t. Naturally, this can give rise to buying opportunities.

Something of the sort seems to have happened at this week’s trust, Ecofin Global Utilities & Infrastructure, which is trading at a discount of almost 15pc. It also yields about 5pc. The portfolio has been radically reshaped in the past year and, while it’s easy to understand why it merited a discount in its earlier guise, there seems to be far less justification now, according to one investment trust veteran. Until September last year the portfolio was

known as Ecofin Water & Power Opportunities and included many unlisted holdings, which caused unease among some investors. All of the unlisted holdings have now been moved to a separate vehicle called EF Realisation, giving Global Utilities & Infrastructure a much more “mainstream” feel, said Richard Curling, who holds the shares in his Jupiter Fund of Investment Trusts.

The trust’s holdings include firms involved in the electricity, gas and water markets, and companies that own infrastructure assets such as roads, railways, ports and airports. Wellknown names such as SSE and United Utilities, the British utilities, GDF Suez, the French giant, and Ferrovial, the Spanish transport group, feature among the top 10 holdings.

“The holdings are well diversified both geographically and by type, with about half the trust’s money in relatively dull regulated firms, 20pc

Ecofin Global Utilities & Infrastructure The trust used to invest in unlisted firms but is now more mainstream