AVI Global Trust Ord
Why is this fund on our radar?
AVI Global Trust has a highly distinctive strategy which aims to find undervalued companies that fit into one of three basic categories: investment companies which are trading below the value of their assets, holding companies with complicated structures that are cheaper than the sum of their parts, and asset backed companies which are cheap for structural reasons (this latter category is mainly comprised of Japanese companies). While it invests with a global remit, it is very different in terms of its country, sector and company composition from a global equity index. The managers look for a catalyst that could see the cheap investments re-rate. This could mean an upcoming event or change in market environment, or it can mean opportunities for activism. They are experienced activist investors, and will encourage company management teams to take actions they think will lead to the value of their companies rising in the market. The trust made our list because it scored the best out of all global equity trusts on all the metrics we looked at. We also think it offers a very distinctive way to make money from global investing which is impossible to replicate with a passive investment.
Skip to Our VerdictPerformance
A key factor to bear in mind with this trust is the investment process has led it to have a long-term underweight to the USA compared to a passive investment or the typical global equities fund. This is because the managers don’t find so many of the undervalued opportunities they are looking for in that country rather than a decision not to invest in it. It is striking therefore that the trust has performed well over the past five years, as of October 2025. US equities have done very well in this period, making the trust’s outperformance impressive. In particular, the trust did very well in 2023, with a broad range of companies boosting the portfolio due to idiosyncratic reasons. However, in 2024, when very few stocks delivered the majority of global index returns, the trust did lag. We think the trust’s positioning could be appealing in the light of the high valuations in American shares and the possibility that US outperformance could end. The trust could help balance heavy exposure to the US in a passive or more conventional equity fund, which will typically be 65%-70%.
calendar year performance
Past performance is not a reliable indicator of future results
The strategy means that returns should be dependent on the situations and outcomes at specific companies, and the returns from individual positions can be ‘lumpy’ when events or other catalysts come good. By buying cheap companies, the managers can in theory reduce the downside from their positions, although we note overall the trust tends to be very exposed to market crashes and may underperform. That is because investors tend to sell indiscriminately in these events. As an investment trust, AGT can also take out long-term debt, and has tended to run with a geared position of up to around 10% in recent years, and this will exaggerate market moves in both rising and falling markets.
Portfolio
The trust’s portfolio is spread across three categories. Closed-ended funds, like investment trusts, are bought when they are trading on significant discounts to the value of their portfolios and the managers see a way for those discounts to narrow. These tend to be UK or Europe listed. Holding companies, typically family-owned, make up a second category. The managers look for situations where corporate activity could unlock this value, for example by spinning out companies from a group, a controlling shareholder changing their stake or an overhaul of the structure of the holding company. Often these are European. Finally, the trust also owns a basket of Japanese companies chosen because they have very high levels of cash and/or obvious ways in which corporate action could see their valuations. Japan has been reforming its corporate governance culture since 2013, and leaning ever more heavily on companies to boost their valuations. The managers have started to find opportunities in South Korea too, which is embarking upon a similar corporate governance overhaul. The chart below shows the weighting to these areas as of the end of September 2025.
sector allocation
Activism is an important part of the investment strategy, which means using a shareholders’ voting power and influence to persuade companies to carry out actions which can create value by boosting share prices or returning cash. Important themes in the portfolio include private equity, those companies not listed on the stock market, where the team have been very successful in recent years in encouraging such shareholder-friendly actions.
Our Verdict
We think this trust offers something very different, with a distinctive active strategy that can’t be replicated in a passive investment. The strategy offers a way to take advantage of idiosyncratic opportunities across global markets in a way that should be less dependent on overall market direction to generate returns. In recent years, the US has outperformed significantly, and this has been a headwind for the approach. However, the managers have managed to keep pace and even sometimes exceed global equity markets. We think it could do particularly well if European, Japanese and UK markets start to outperform the US’.
The portfolio should be expected to evolve over time, but holding companies and investment companies should remain key areas of focus, with asset-backed Japanese companies also seeming likely to be a multi-year position. AVI are specialists in these fields, with a good track record of adding value through their activism. Investors do need to bear in mind the fact that the strategy and the gearing mean in market crashes AGT will likely perform poorly too, but it has a track record of recovering those losses when markets rally, for the same structural reasons.
Key Risks
- The portfolio has underperformed in falling markets in the past
- As an investment trust, a widening discount and gearing may magnify any losses
- Structural underweight to the US can work against it at times
