Trustnet asks fund pickers which aggressive portfolios deliver steady returns in the long-run
By Eve Maddock-Jones, Reporter, Trustnet, 2 March 2022:
Market volatility is expected to stay higher for longer and for the bolder investors there are several more adventurous options for delivering consistent returns long-term.
The past few months have been tough for investors, with a rotation out of growth and into value challenging investors to look outside the narrow areas they had being relying on for returns over the past decade.
This market shift was driven by the highest inflation in years and central banks’ programme of raised interest rates and monetary tightening to combat it. This came after years of stringent Covid measures stalling economic growth and months of supply chain issues…
Given this some investors may want to build their portfolio around more conservative options, but others might prefer to take that volatility on headfirst, embracing some higher levels of risk into their core portfolios…
Edinburgh Worldwide
… James Carthew, head of investment companies QuotedData picked the Edinburgh Worldwide trust.
Led by FE fundinfo Alpha Manager Douglas Brodie and deputy managers Luke Ward and Svetlana Viteva, the trust steps slightly away from Baillie Gifford’s house style of highly concentrated portfolios.
While it is still invested in growth, it holds between 75 and 125 companies that have a lower than $5bn market capitalisation at the time of initial investment.
Carthew said that the team “aims to identify tomorrow’s winning businesses when they are still relatively small, and hang onto them as they become successful.”
The recent shift out of growth in markets has caused the trust’s returns to slump, something that has been widespread across funds that employ this investment style. But this has created a major buying opportunity for investors, according to Carthew, with the trust now running on an 8.81% discount.
He added that the recent performance dip should not put investors off the trust since it has proven itself over the long term “as the best-performing global smaller companies trust over five years and in fact is the best performing of all global trusts over that period barring Scottish Mortgage.”
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