Global Opportunities Trust sees solid returns through 2022. Company NAV grew 15.8% for the year ended 31 December while shares grew 7.9%, a solid return given the volatility in global markets. The positive returns appear to have narrowed the company’s discount which now sits at around 12%. This also marked the first full year for the company as a self-managed trust.
Dr Sandy Nairn, executive director commented;
“The extended period of negative real interest rates that followed the financial crisis of 2008 resulted in a more extreme and generalised overvaluation of asset classes than I have seen in living memory. It extended from equities to bonds, property and alternatives and to both listed and unlisted markets. This is what I, and others, have referred to as the ‘Everything Bubble’ and we know now that it reached a climax and finally popped at the end of 2021.
“We are moving into a world in which free money no longer drives all returns to unjustified heights. I believe that we are in a transition back to one where the traditional investing virtues will once again reign. This is not about value versus growth or other factors such as ‘quality’. It is simply about how much you are willing to pay for the characteristics and future of an asset. We look forward to the day where risk aversion rises to the levels that disregard for risk reached in the recent past. That will be the time that we again see an abundance of attractive investable opportunities.
“In my judgement we are not there yet, but the time is coming. We will try to remain patient and prudent until that time. Our proposition to shareholders is that, as and when those opportunities present themselves, the company will be willing and ready to use the flexibility that our investment policy creates to pursue them to the full. We are tactically, not permanently, bearish. We will seek to keep shareholders informed of our views as they evolve via the website and shareholders can also opt in there to receive these views electronically, should they wish to do so.”
On the outlook, chairman Cahal Dowds noted;
“Whilst it is highly likely that there will be significant rallies in asset prices as inflation falls in response to monetary policy, the world should continue to be viewed with caution. The probability of a prolonged recession appears much more likely than markets currently seem to be discounting, and as such the primary investment focus of the company remains one of capital preservation. In times of economic stress, pessimism sets in and liquidity tends to evaporate. However, notwithstanding this, the new investment flexibility enjoyed by the company will allow it to take any opportunities that may appear along this path.
“Whilst the company’s NAV rose substantially over the period, the share price movement lagged and the discount to NAV widened as a consequence. The board believes that the company now represents a unique proposition for investors and the company will be increasing its efforts to raise awareness, which we believe will attract new investors and help address the question of the discount. We would like to thank shareholders for their patience and support over the period and we look to the future with optimism.”
GOT : Global Opportunities Trust sees solid returns through 2022