Your vote counts: the investment trust AGMs in August 2022

Kepler Trust Intelligence picks out two investment trust AGMs of note.

After a busy July, next month looks set to be a quieter period for annual general meetings (AGMs) in the investment trust world. Just 12 closed-ended funds will be holding AGMs, including five from the venture capital trust (VCT) sector.

We also continue to see a return to physical events, with only three trusts giving online access to their AGMs in August.

One of the more notable trusts holding its AGM next month is JPMorgan Global Core Real Assets (LSE:JARA). The trust launched in 2019 and invests primarily in a mix of real estate, infrastructure and transportation.

In an extremely tough period for investors, JARA has managed to deliver share price total returns of 20.6% over one year (to 26 July). The trust has held up well, owing in part to a sizeable portion of its income being index-linked and may benefit from inflation as a result. Investments in liquified natural gas carriers have also performed well, with demand for these vessels surging after Russia’s invasion of Ukraine.

JARA’s AGM will take place on 5 August, with the two key votes focusing on the trust’s discount and dividend policies. With regard to the former, JARA will vote on whether to continue a policy that enables the board to approve share buybacks of up to 14.99% of the trust’s shares. This has not been needed thus far, as the trust has traded at a premium for long periods. Indeed, the trust has traded at an average premium of just over 1% in the last 12 months.

The current policy, which the board is seeking to have approved again, is to pay a quarterly dividend, with a target yield of 4% to 6%, based on the trust’s initial issue price of 100p.

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Another trust holding its AGM next month, which has also managed to perform well in 2022, is NextEnergy Solar (LSE:NESF). The trust primarily invests in UK-based solar energy infrastructure, with a particular emphasis on providing regular dividends to shareholders.

The trust has delivered share price total returns of 11.8% over the past year (to 26 July). Like JARA, about 60% of the trust’s income is derived from inflation-linked sources, mainly due to government subsidies that are tied to the retail price index.

A move towards assets that looked more likely to withstand inflationary pressures, as well as record power prices, have likely been the drivers behind of NESF’s performance this year. The trust also upped its dividend target by 5% at the end of June.

At the trust’s AGM, shareholders will vote to approve its dividend policy, as well as share buyback and issuance measures. The latter point is potentially significant, as the proposed measures will allow the trust to issue new shares without first offering them to existing shareholders. NESF is looking to raise more money to invest in battery storage and solar park facilities.

However, it is currently trading at a discount, which may make the process trickier than it has been for the trust in the past.

Source: AIC - Association of Investment Companies.