Bell Potter LIC Weekly: ESG integration, dispersion and performance

By Hayden Nicholson | More Articles by Hayden Nicholson

Pengana International Equities Limited (ASX:PIA)is a LIC with the objective to provide shareholders with capital growth from investments in an ethically screened and actively managed portfolio of global businesses, with the provision of regular and reliable fully franked dividends. Companies considered for inclusion within the investment portfolio will typically exhibit large and accretive FCF generation, compelling valuations, low leverage and compliance with internal ESG requirements. The strategy aims to generate consistent long-term returns whilst reducing volatility and the risk of permanent capital loss. We calculate a total shareholder return of 14.3% over the past year, compared to a pre-tax NTA return of 8.3%, which has aided in a significant reduction of the discount. Meanwhile the average total shareholder return and pre-tax NTA return across global equity mandates was 2.1% and 1.7%, respectively. In accordance with Pengana’s responsible investment process, a negative screening process initially seeks to avoid investable companies that derive operating revenues from direct and material business involvement in predefined sectors. Involvement in these screened activities is assessed by reference to reports sourced from Sustainalytics, an independent provider of ESG and corporate governance research and ratings (continued in report).

Bell Potter’s Indicative NTA tracks the ‘indicative’ movement of a LIC’s underlying NTA each month by monitoring the percentage movements of the disclosed holdings and using an index to track the movement of the remaining positions. The Indicative NTA works best with LICs that have a high percentage of investments concentrated in its Top 20, regular disclosure of its Top 20, lower turnover of investments, regular disclosure of its cash position and the absence of a performance fee. We have also included an adjusted indicative NTA and adjusted discount that removes the LIC distribution from the ex-dividend date until the receipt of the new NTA post the payment date. This report is published each Monday prior to the market open and is available on a daily basis. Intraday indicative NTAs will be available on request through your adviser.

For full details refer to the detailed report below or click here to download your copy.

About Hayden Nicholson

Hayden Nicholson is an ETF/LIC Specialist at Bell Potter Securities. Hayden provides comprehensive coverage of the ETF and LIC sectors, producing a range of highly regarded reports covering investment fundamentals, asset class structure and cost, and the role of managed investments in portfolios.

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