Sunniva
Kolostyak:
Welcome
to
Morningstar.
Today
I’m
joined
by
Peter
Hewitt,
the
manager
of
the
CT
Global
Managed
Portfolio
Trust,
which
is
a
trust
with
two
portfolios.
Peter,
thank
you
very
much
for
being
here
today.
You
do
something
you
call
cradle-to-grave
investing.
Would
you
like
to
tell
me
what
that
entails?
Peter
Hewitt:
Well,
cradle-to-grave
investing
is
a
grand
title,
but
really,
we
have
two
portfolios,
a
growth
and
an
income.
And
for
the
growth
portfolio,
that
probably
is
ideal
for
younger
investors.
So,
it
can
be
parents
investing
for
children,
younger
adults,
typically
who
are
focused
on
longer-term
growth,
and
let’s
hope
big
capital
returns,
principally
capital
returns,
over
the
long
run.
As
you
get
older
–
and
there’s
no
one
age
for
any
individual,
it
can
vary.
But
as
you
get
older,
you
tend
to
have
more
of
a
preference
for
current
income
and
that’s
where
the
income
portfolio
comes
in.
So
actually,
you
can
be
investing
in
the
managed
portfolio
growth
shares
for
a
long
time.
And
then
when
you
decide
it’s
time
for
some
more
income
and
maybe
a
bit
less
risk,
then
it’s
time
to
move
into
the
income
portfolio
and
we’ve
got
a
conversion
facility
that
you
can
do
that
once
a
year,
pretty
costlessly
actually.
So
that’s
cradle-to-grave
investing
for
when
you’re
younger
to
when
you’re
much
older
and
your
requirements
are
different.
SK:
So,
what
goes
into
the
different
portfolios?
What
makes
them
different?
PH:
Well,
in
the
case
of
the
growth
portfolio,
it
is
focused
on
capital
growth.
And
so,
I’m
looking
for
investment
companies
that
will
hopefully
deliver
big
capital
growth
over
the
long
run
and
I
do
invest
on
a
long-term
basis.
So,
for
example,
I’ve
got
three
key
themes
at
the
moment
that’s
reflected
in
the
portfolio.
The
first
one
is
I
am
quite
optimistic
for
what
I
call
secular
growth
investment
companies,
companies
that
specialise
in
technology
companies,
biotechnology,
healthcare
and
you’re
seeing
big
growth
there
at
the
moment,
artificial
intelligence
being
one.
And
so,
I
think
it’s
important
for
a
growth
portfolio
to
have
a
core
in
that
area
because
you
can
get
multiple
times
your
money
from
that.
I
also
like
private
equity
trusts
which
tend
to
be
invested
mainly
in
private
growth
companies.
They’re
selling
on
very
wide
discounts
just
now
and
I
think
offer
great
value
and
good
potential
for
capital
returns
over
the
longer
run.
SK:
Yeah,
and
I
know
you’ve
just
added
to
your
growth
fund.
PH:
Yes,
I
have.
I
mean,
I’ve
just
come
from
a
meeting
with
Augmentum
Fintech
(AUGM)
which
is
a
classic
example.
It
specialises
in
new
companies
in
financial
technology,
mainly
in
the
UK
but
also
Europe
and
I
think
it’s
got
big
potential
for
capital
returns.
The
shares
are
selling
at
a
35-plus
discount
to
the
asset
value
which
I
think
will
grow
quite
well
over
the
next
two
or
three
years.
So,
in
my
view,
that’s
a
big
opportunity
and
there’s
a
number
of
other
companies
in
the
private
equity
sphere
like
that.
Pantheon
(),
HgCapital
(HGT)
is
my
biggest
holding.
That
specialises
in
software
companies,
but
similarly,
it’s
had
great
returns.
So,
I
think
that’s
an
interesting
theme.
And
the
last
one
actually
is
UK
equities.
I
think
the
UK
market
is
unloved.
It
has
great
value.
It’s
very
inexpensive
in
comparison
even
to
Europe
and
certainly
to
America
and
actually
there
are
some
great
growth
companies.
So,
I
like
UK
trusts
with
a
bias
to
mid
and
small
cap
UK
companies
which
are
cheap
and
unloved
but
some
of
them
have
got
great
growth
potential.
So
actually,
all
of
these
themes
are
reflected
in
my
big
holdings
like
in
the
case
of
the
UK
Trust,
I’ve
got
Fidelity
Special
Values
(FSV),
Aberforth
Smaller
Companies
(ASL),
there’s
a
couple
for
you,
Aurora
Trust
(ARR),
that’s
another
good
UK
trust.
Private
equity
we’ve
touched
on,
HgCapital,
Pantheon,
Oakley
Capital
(OCI),
Augmentum
Fintech.
And
then
the
secular
growth,
I
would
say,
Polar
Cap
Technology
(PCT),
Allianz
Technology
Trust
(ATT),
Worldwide
Healthcare
(WWH),
Biotech
Growth
(BIOG),
that
is
what
I
want
to
have
a
holding
for
the
long
term.
Now,
for
the
income
portfolio,
I
do
try
and
reflect
some
of
these
themes,
but
almost
all
the
trusts
I
mentioned
there
don’t
pay
dividends.
So,
the
income
portfolio
currently
has
a
yield
of
over
6%.
So,
we’ve
kind
of
got
to
look
at
companies
that
have
decent
dividends,
but
similarly,
UK
Equity
Trust
()
has
a
lot
of
them
that
do.
So,
Law
Debenture
(LWDB),
Lowland
(LWI),
Mercantile
(MRC)
is
one
I’ve
been
buying
a
lot
of,
that
specialises
in
mid-cap
companies.
I’ve
got
some
private
equity
trusts
in
there,
NB
Private
Equity
(NBPE)
and
Apax
Global
Alpha
(APAX)
would
be
two,
and
even
one
or
two
secular
growth
trusts
that
pay
dividends,
and
I
would
highlight
International
Biotech
(IBT)
as
one
I’ve
been
buying.
So,
mainly,
there
are
two
or
three
trusts
that
are
in
both
portfolios,
but
ideally,
they
both
have
about
35
to
40
holdings,
and
yep,
there’s
different
objectives,
one
is
income
with
some
capital
growth,
and
the
other
is
all
out
capital
growth.
So,
there
you
are.
SK:
So,
another
thing
I
want
to
talk
about
is
the
end
of
the
tax
year,
and
we
have
kind
of
ISA
season,
as
we’d
like
to
call
it,
coming
up.
I
guess
my
question
to
you
is,
how
should
investors
who
often
tend
to
talk
about
stocks
and
shares
ISA
as
a
vehicle
for
equities.
Is
there
any
way
that
they
should
think
about
this
in
terms
of
trusts
and
funds?
PH:
I
think
actually
trusts
and
funds
investment
companies
really
should
be
the
kind
of
prime
way
that
an
individual
investor
certainly
initially
gets
exposed
to
the
stock
market.
If
you
buy
the
Managed
Portfolio
Trust,
actually,
you’re
buying
one
share,
but
you’re
really
buying
holdings
in
40
underlying
companies.
So,
there’s
a
level
of
diversification
there
that
means
even
if
you
buy
one
big
company,
something
unexpected
can
still
happen
to
it
and
be
reflected
in
a
horrible
share
price
performance.
Tends
not
to
be
the
case
with
investment
companies.
So,
it’s
a
good
first
step
into
the
stock
market.
It’s
holding
a
well-run
investment
company,
hopefully,
which
specialises
in
whatever
you
want,
capital
growth
or
income,
and
I
think
that’s
a
good
route
for
people
to
get
their
initial
exposure
into
the
stock
market.
SK:
You
mentioned
UK
stocks
being
unloved.
What
are
your
thoughts
on
the
potential
UK
ISA?
Do
you
think
that
would
move
the
needle?
PH:
I
mean,
that’s
a
difficult
one.
I
think,
at
the
moment,
it’s
still
not
very
clear
exactly
what
the
characteristics
or
rules
are
that
would
qualify
companies
for
a
UK
ISA.
If
it’s
just
being
listed
on
the
London
Stock
Exchange,
you
could
buy
an
investment
company
which
wholly
invests
in
US
stocks.
So,
you’re
not
really
benefiting
the
UK
there.
I
mean,
in
theory,
the
idea
is
quite
good.
I
think
how
it
works
out
in
practice
might
be
something
different.
So,
I
think
the
rules
have
to
be
clear.
If
they
are,
it
could
be
an
additional
benefit,
but
I
don’t
think
it’s
going
to
transform
overnight
the
companies
that
are
listed
on
the
London
Stock
Exchange,
which
I
think
are
undervalued
and
suddenly
result
in
them
getting
proper
valuations.
But
I
think
it’s
maybe
a
small
step
in
the
right
direction.
SK:
Peter,
thank
you
very
much
for
joining
me
today.
PH:
Thank
you.
SK:
For
Morningstar,
I’m
Sunniva
Kolostyak.
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