Caledonia's investment team collectively has more than £20m invested in the trust, placing it among the managers with the most invested in their investment trusts. Over recent years, this investment trust has struggled to keep pace with its sector. However, over the long term it has a good record of preserving investors' wealth (read more) and continues to be an Investors Chronicle 'buy' tip. In June 2011, we had said "there is value locked in. And, with management seeking to improve investment returns and bump up the dividend, the shares retain their attraction". See our tip.
Caledonia's share price is on a discount of around 25 per cent to the trust's net asset value, around the widest it has been in three years, which could present a buying opportunity. "Caledonia does appear to be an anomaly," says Iain Scouller, head of the investment funds team at broker Oriel Securities. "The trust published interim results to 30 September showing that net asset value (NAV) was down by 13.4 per cent over the period, in line with the decline in the FTSE All-Share index (-13.5 per cent). This performance has also been in line with the fund's peer group. We continue to believe that there is significant scope for a discount re-rating, especially if the portfolio restructuring starts to deliver improved performance. We recognise that this may take some time, but we think the quicker the portfolio reorganisation is completed, the better."
Meanwhile, the trust's interim dividend has been increased by 5.4 per cent and the trust has very healthy revenue reserves, equivalent to more than eight times the cost of the annual dividend – one of the highest reserves in the investment trust sector.
Caledonia's underlying investments include a number of other funds, but its total expense ratio remains relatively low for a fund of funds, at 1.55 per cent.
CALEDONIA INVESTMENTS (GB0001639920) | |||
| PRICE | 1,409.11p | GEARING | 103% |
| AIC SECTOR | Global Growth | NAV | 1,849.99p |
| FUND TYPE | Investment trust | PRICE DISCOUNT TO NAV | -25.04% |
| MARKET CAP | £816.14m | 1-YEAR PRICE PERFORMANCE | -23.91% |
| SET-UP DATE | 18-Jul-60 | 3-YEAR ANNUALISED PRICE PERFORMANCE | 3.30% |
| TOTAL EXPENSE RATIO | 1.55% | 5-YEAR ANNUALISED PRICE PERFORMANCE | -5.41% |
| YIELD | 2.67% | MORE DETAILS | www.caledonia.com |
Source: Morningstar.
Performance data as at 16 January 2012.
TOP 10 HOLDINGS (as at 31 December 2011)
| HOLDING | PERCENTAGE |
| Close Brothers | 11 |
| British Empire Securities | 7.8 |
| Cobepa | 7.7 |
| Bristow Group | 6.7 |
| AG Barr | 3.6 |
| Avanti Communications | 3.3 |
| London & Stamford Property | 3.3 |
| Oval | 2.9 |
| Satellite Informations Services | 2.7 |
| Capital Today China | 2.5 |
Geographic breakdown
| REGION | PERCENTAGE |
| UK | 56 |
| Europe | 18 |
| Asia | 14 |
| North America | 11 |
| Other | 1 |
