Archived article

Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.

We remain convinced there’s hidden value within the investment trust

BRITISH EMPIRE TRUST (BTEM) 728p

Loss to date: 4%

Original entry price: Buy at 758p, 24 May 2018


Despite a year-to-date rebound, our ‘buy’ call on British Empire Trust (BTEM) is modestly in the red. We remain convinced the trust offers investors plenty of value, both within the underlying assets of the portfolio and with the shares trading at a 9.4% discount to NAV (net asset value).

Joe Bauernfreund-managed British Empire aims to achieve long term absolute returns by investing in undervalued assets. Since Bauernfreund took sole responsibility for the portfolio in 2015, he has concentrated the portfolio, sharpened the focus on ideas with an identifiable re-rating catalyst and is seeing opportunities with attractive discounts.

British Empire is a useful portfolio diversifier given the idiosyncratic nature of the strategy and the ‘very different return drivers’ from many of its peers, according to research group Kepler.

Kepler argues the underlying holdings of each investee fund are often ‘highly diversified’, meaning the portfolio isn’t as concentrated as it looks.

It points out that ‘the discount remains wide both in absolute terms, but also relative to other investment trusts’. 


SHARES SAYS: Value investors should stick with British Empire Trust at 728p with Bauernfreund continuing to
find bargains and given significant re-rating scope.

‹ Previous2019-05-23Next ›