by Jennifer Hill from interactive investor, 17th July 2023:
Wealth preservation investment trusts are popular with DIY investors and for good reason, but a range of other defensive strategies are worthy of consideration, finds Jennifer Hill.
The gathering of storm clouds tends to have investors running for cover but with sudden swings in the investment climate more commonplace than ever, it is best to have some shelter in place before the rain starts lashing.
Flexible investment trusts like Capital Gearing, Ruffer Investment Company and Personal Assets have strong long-term track records in both protecting and growing capital, but investors should consider casting their nets wider to other defensive strategies, provided they are sufficiently differentiated…
Ecofin Global Utilities and Infrastructure
QuotedData points to the defensiveness of the utilities and infrastructure sectors given steady demand as well as the structural growth potential amid the need to transition away from fossil fuels and upgrade existing infrastructure. It yields 4%.
“Although fluctuating power prices and windfall taxes can have an impact, the manager of Ecofin Global Utilities & Infra suggests that earnings guidance for utilities is conservative and thinks that valuations are undemanding, which lends some downside protection,” says James Carthew, head of investment companies at QuotedData.
Pantheon Infrastructure
For direct exposure to infrastructure assets Carthew recommends Pantheon Infrastructure. It makes co-investments primarily in digital infrastructure, such as data centres, fibre and telecom towers, with the aim of generating predictable and often inflation-linked cash flows to return 8%-10% per annum to shareholders.
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