I'm still umming and ahhing about whether to include this into our portfolio. My rationale is that I'd like to get some exposure to renewable energy investments and this seems to be the easiest way that I can currently think of to achieve that.
In mine and Mel's portfolio we have (so far) tried to combine some income type instruments (e.g. IMB, NG., LGEN, and the odd dodgy bond e.g. PMO1 and IPF1), along with some growth/value companies which we've tried to select having decent profitability and cash richness (e.g. TUNE, AMS, BVXP etc) and with others with both (we think) attributes (e.g. ULVR, DGE, GAW...).
The point I'm trying to make is that we are not looking at JLEN as an addition to a HYP or because we think it will set the world on fire with it's upside. Merely as an attempt to diversify (which may turn out to be a waste of time in our case).
In another thread Richfool replied as follows to an earlier post:
richfool wrote:These (alternative energy trusts) tend to be attractive to those seeking higher dividend yields, with a degree of index-linking. There is also the argument that they are less correlated with equities (in the event of a bear market). Note the use of the word less. I think there is a potential to be affected by government tax changes. The fact that JLEN holds wind, solar and waste disposal provides some diversification within those types of energy sources.
What I wanted to clarify was what is meant by less correlated with equities. Does this imply that this instrument JLEN is not wholly composed of "shares" in companies, but that some of the investment is in bonds/debentures with the composite firms?
Another question I wanted to ask, was whether now is a remotely good time to buy this. I want to say firstly that we have no experience at all of buying ITs, so whilst the current DY at 5.6ish looks o.k. the premium to NAV (about 12.6%) looks to be at a peak, and hence that this is perhaps a shade too pricey right now.
When I looked at the price chart with a 5Y period view selected it does indeed look as if this IT spends most of it's life at a premium to NAV, though right now excessively so.
(And as Richfool alluded earlier:
the descent below NAV was perhaps a result in the reduction of subsidies in 2015-2016)I bought a couple of years back, when the premium (to NAV) was lower, I think c 5% or 6%, and not long after the Government had reduced their subsidies, so they were somewhat out of favour for a time.
So given that Mel and I are currently trying to build a portfolio (rather than manage a retirement HYP), I'm currently viewing JLEN as maybe an interesting diversifying element, but at today's prices probably something to "just put on the back-burner" and perhaps only to revisit when the markets are looking depressed all round.
All opinions welcome,
thanks Matt
but presumably that's saying that the management of JLEN is not necessarily that shrewd and motivated, but just that at the moment they are well positioned to redirect subsidies £££ back to PIs.