I guess this might be a possibility once fractional shares are rolled out on freetrade?
It has no bearing unfortunately - fractions or whole. SCRIP mandates need to be lodged at Nominee level. You can split the mandate (ie. pay 5021 shares cash and 2,321 shares stock) but it’s a constant election post ex-date by Freetrade. Outstanding settlement activity confuses matters further. It’s certainly do-able, I used to do this exact thing for a broker many years ago - but it was a faff, manual. It also has interesting tax consequences if outside of an ISA that are too boring to detail but require extra leg work.
In short : I’d not want to Freetrade to focus attention and time on this right now. They’ve ‘better’ things to do I would suggest. For one, getting the TRIG costs and charges disclosure correct… has been incorrect for some time … https://finki.io/video.html
Ah, SCRIP may not work then, but at least fractionals will allow you to use the dividend payout to buy new shares with.
How are the charges for TRIG wrong? They look fine comparing them against the KID?
Yep, but the KID’s out of date
I notice TRIG is often in the popular buys list of Freetrade.
Is there a more recent NAV available for this investment company? It’s currently trading at roughly a 15% premium to this June 2019 figure.
Some key points from the Sept '19 update. (Presumably October’s is due soon?)
Financial Highlights Six months to 30 June 2019
NAV per share: 115.0p (Dec 2018: 108.9p)
Earnings per share: 9.3p (H1 2018: 4.8p)
On track for 2019 target dividend: 6.64p per share
Profit before tax £122.2m
Earnings per Share 9.3p
Cash dividend cover 1.4x
Ongoing Charges Percentage 0.98%
Detail on management fees:
1.0% per annum of the Adjusted Portfolio Value of the investments up to £1.0bn (with 0.2% of this paid in shares)
Falling to (with no further elements paid in shares) 0.8% per annum for the Adjusted Portfolio
Value above £1.0bn
0.75% per annum for the Adjusted Portfolio Value above £2.0bn
0.7% per annum the Adjusted Portfolio Value above £3.0bn
One of the most exciting parts of investing is that it threads through literally everything in the world. New discovery in cell biology? There’s a pharmaceutical firm that’ll affect. Earthquakes (or Kaiju) in the Pacific? Japan’s Nikkei index might shake too.
So it’s not surprising that the global heating (thanks, Guardian!) has a huge influence on investing patterns.
When it comes to our potential impending doom, there can be two investing approaches.
- How can I invest in the beneficiaries of chaos?
- How can I invest in solutions?
The first approach might include companies like water traders or frackers.
The second obviously includes companies trying to power the world with less apocalyptic fuels like solar, tidal energy or wind.
One of the UK’s biggest investable options is The Renewables Infrastructure Group - or TRIG for short.
TRIG was launched in 2013 to bring an accessible way for UK investors to invest in renewable energy.
It isn’t an energy company itself, it’s actually something called an alternative investment fund, a type of investment trust. These funds invest in more unusual assets like hedge funds, art and antiques, wine & whisky or in this case wind and solar energy farms. ️
Founded in 2013, TRIG buys energy assets throughout Europe; it’s currently invested in 34 wind farms, 28 solar parks and one battery storage facility (crying sadly, by itself).
TRIG’s network of producers sell on energy to wholesale energy providers: legacy players like British Gas or E.ON.
The energy goes to consumers on renewable tariffs as well as sourcing the general supply. While providers have to buy a certain amount of renewables to supply customers on green deals, the amount bought for the general supply partly depends on the price renewable suppliers can deliver vs other sources, as well as the overall demand for energy.
They also sell on fixed contracts which are more controllable. And they have more opportunity with providers like Bulb and Octopus who build their proposition around green energy only.
The price of air and sunshine
It’s kind of magical to generate energy from air currents and sunlight. Then again, it’s also pretty crazy to make it from ancient plants and animals.
In either case, on the cost front, wind and solar are increasingly winning.
In the past, renewables were heavily supported by subsidies but the UK government somewhat curtailed these in 2016, which led TRIG to begin diversifying abroad.
The Epine wind farm in France, one of TRIG’s assets
However, improvements in generator and battery tech mean that renewables are now economically viable without support. In fact, wind and solar electricity are now cheaper than coal. Only natural gas hovers around a similar cost level and the expectation is that new tech will continue to drive down the cost of renewables.
It’s still worth noting that even though renewables are economically viable without subsidies, favourable policies certainly help, especially since the initial capital costs are high. And politics can change all the time.
Of the two renewables at TRIG, onshore wind is generally slightly cheaper compared to solar. Turbines are more efficient and productive than panels. But solar can be more reliable (the sun always rises).
Where fossil fuels currently win is storability: you can keep a gas canister around for a while before burning it. You can’t keep sunshine until you need it and it’s harder to store generated electricity. Better batteries are the big challenge here - ask Elon Musk - so it’s unsurprising that TRIG have invested in a battery project too.
Utilities are famously good at delivering cash flow to investors and indeed TRIG has tended to pay a healthy dividend. But because of the shift to renewables, there’s a growth story too.
Tilting at windmills ♞
TRIG does look like a neat way to get investment exposure to the up-and-coming green energy sector. However, it does carry a few risks too.
The big energy firms still have a huge amount of control and clout in the market. If they start to pursue renewables with rigour, they could muscle out smaller investment groups, limiting TRIG’s growth.
Technological progress can also be a double-edged sword for a capital-intensive company. On the one hand, there’s always something better to invest in and potential upgrades to your assets. On the other hand, if the pace of change outstrips the ability to upgrade, you risk being left with ageing assets vs superior competition. The actual assets are relatively illiquid so it’s less easy for managers to sell them and redeploy the money. That said, unlike an open-ended fund, as a trust TRIG doesn’t ever need to sell off assets to redeem shareholders selling their shares.
TRIG will have to manage its portfolio shrewdly to ensure they stay at the forefront of costs and innovation.
Finally, as with any closed-ended investment trust, investor enthusiasm can mean the share price races ahead of the net value of the assets it holds. In fact, the price premium on a share of TRIG vs net assets has increased recently. That said, it’s always harder to judge the value of non-market assets compared to a pool of stocks.
Clean and simple
Investing is all about calculating probabilities and navigating ambiguity. Here we have at least some certainty. Climate science is an unambiguous fact. So is the eventual depletion of fossil fuels.
That doesn’t predict the timeline or mean that wind and solar are the definite beneficiaries or even that TRIG is the best prospect in the sector.
Nonetheless, it’s one of the UK’s few ways to make a simple, direct and liquid investment in active green energy projects.
Freetrade does not provide investment advice and individual investors should make their own decisions or seek independent advice. The value of investments can go up as well as down and you may receive back less than your original investment. Tax laws are subject to change and may vary in how they apply depending on the circumstances.
I have some of these shares, when do you get charged the on going costs?
You don’t get charged. They usually just subtract it from the fund value on a continuous basis.
Thank you that makes alot of sense
Are there any plans to add any more alternative investment funds?
What is the difference between this one and the other solar and wind farm trusts in the app?
First Solar $FSLR
Foresight Solar £FSFL
Global Clean Energy £INRG
In addition to @ytsruh’s quick note, FSFL, BSIF and UKW are all investment trusts.
INRG is an ETF.
Some thoughts on renewable energy investments, both investment trusts and other businesses here:
Really helpful posts and links, thanks!
I’d like to invest in this, but the premium on Net Asset Value (NAV) suggests waiting could be prudent. I don’t normally try to time the market, but in this case it seems like a clear indication that I’d be paying over the odds. A few points from Morningstar:
- 12M average premium is 10.56% vs current premium of 16.64%. (This is based on an estimate of NAV though.)
- NAV has increased 11.6% in 12 months, while price is up 21.83%
- (In answer to my original question) TRIG report their NAV semi-annually.
To those of you buying now and recently, does paying this premium (not) concern you?
I normally only buy when ITs are showing a decent discount but my concern was that if I continued to wait, I would probably end up not investing at all (not being able to time the market and all that).
So I’ve been buying a bit each month since July - investment is currently showing an overall gain of 3.4%.
Buying in small chunks is clearly the answer, thanks. It’s only really practical for me on Freetrade
Can this get the label
energy in the app, so it gets reported in the sectors as such?
Great post, thanks.
Why is this trust the most popular of all on ? It’s almost always in the weekly top ten.