WAVERTON REAL ASSETS FUND: The fund is the cornerstone of portfolios


WAVERTON REAL ASSETS FUND: £300m fund is cornerstone of portfolios

The Waverton Real Assets investment fund does not seek to extinguish the proverbial lights of investing. It sees itself as a steady whirlwind, offering respectable income and return on capital through thick and thin.

It’s an investment formula that seems to be proving popular judging by the inflows into the fund. Launched in late 2018, the fund now has assets of over £300m and has provided investors with a respectable income – around 4% per annum with dividends paid quarterly for those who want it – and a return on capital.

Since its launch 37 months ago, the fund has delivered total returns (capital plus income) of around 19%. Compared to the FTSE All-Share Index, it provided slightly lower returns, but the run was smoother – not falling as far in March 2020 without taking full advantage of the market.

The fund is managed by Luke Hyde-Smith, assisted by Matthew Parkinson. “We see it as a building block of the portfolio,” Hyde-Smith says. “It provides investors with sources of income that they would struggle to obtain on their own, while trying to increase the capital value of their investments.”

With 48 farms, the sources of income are varied, but the focus is very much on real estate and infrastructure. Together, these asset classes represent more than 60% of the fund’s portfolio. Holdings are through publicly traded investment trusts, individual stocks, exchange-traded funds and actively managed funds.

Traditional commercial real estate funds – which invest in a multitude of commercial, office and industrial properties – do not feature in the portfolio. Hyde-Smith prefers holdings that benefit from transforming the way people shop.

This means the fund holds key stakes in investment firm Urban Logistics, which owns industrial units that tenants can use to manufacture and distribute goods in the last mile of the supply chain. The main tenants are Amazon and the logistics companies Culina and Unipart. The rental income the trust generates from its tenants feeds a dividend to shareholders such as Waverton in the order of four percent.

Another large fund portfolio is Tritax Big Box, which leases fulfillment centers from companies such as Amazon, Morrisons and Ocado. Another top 10 holding is Supermarket Income Trust, which owns stores that allow large supermarket companies to offer in-store shopping, click-and-collect services and online grocery distribution centers from around the world. last mile for home delivery – all under one roof.

“It’s a super confidence and a real achievement,” says Hyde-Smith. “It was listed on the stock exchange in 2017 and now has a market value of over £1billion. For investors, it provides steadily growing income based on the rental contracts it has entered into with customers. Over the past four years, the trust’s annual dividend has fallen from 5.5 pence per share to 5.86 pence. For the current fiscal year, payments are up from last year.

A recent purchase was Atrato Onsite Energy, a trust that installs solar panels on commercial buildings, allowing tenants to reduce their energy bills. “It’s time,” says Hyde-Smith, “given soaring energy prices.” Other asset classes the Waverton fund invests in include commodities – with exposure to copper and forestry and a stake in Shell.

Shares of Waverton Real Assets can be purchased on all major wealth management platforms. Total annual charges are just over 0.6% and investors can choose to take quarterly income or roll the income into their portfolio. The stock market identification code is BF5KV17.



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