by Val Cipriani, Investors Chronicle, March 18, 2025:
Shares in capital preservation investment trusts have stayed broadly flat during the latest market sell-off, providing better shelter than during the 2022 bear market.
The three defensive wealth preservation trusts, Capital Gearing (CGT), Personal Assets (PNL) and Ruffer Investment Company (RICA), had around 30 per cent of their portfolios in stocks as of 28 February, low enough to cushion against the worst of the volatility..
The trusts aim to protect shareholder capital while growing it over the long term. However, in 2022, with bonds and equities falling in tandem, the trusts struggled to keep their wealth preservation promise..
Capital Gearing currently relies on bonds to protect its portfolio, with 21 per cent in government bonds and 36 per cent in index-linked government bonds..
Personal Assets and Ruffer have big bond exposures too but also invest in gold..
James Carthew, head of investment companies at QuotedData, said it “would be hard” to recommend Ruffer, whose board has “allowed” a persistent near-5 per cent discount..
Multi-asset Caledonia Investments (CLDN) also has an eye on capital preservation and was trading at a 31.8 per cent discount as of 14 March. Carthew said that RIT’s and Caledonia’s higher discounts are commonly thought to reflect their exposure to private assets, but “there is no real logic to this, given that these assets sit in closed-end structures and liquidity risk is reflected in NAV valuations”.
Read more here