James Carthew for Investment Week, 03 February 2022:
In 2021, the market switched from expectations of strong economic recovery to renewed growth fears and finished the year fixated on inflation and probable interest rate rises…
Uncertainty is increasing and 2022 may finally be the year that many chairs and managers of investment companies have been warning us about for some time now, when markets struggle to make headway.
It has been interesting to watch the growth of funds focused on wealth preservation in this context. The AIC’s flexible investment sector contains a number of multi-asset funds that prioritise this or the delivery of less volatile returns than equity markets…
Each of them has some exposure to equities and this part of their portfolio would not be immune to a sharp fall in markets…
Inflation has been a common theme in the reports of these funds for many years. There is a theory that it offers the only way out of the excessive debt that governments have run up…
The above funds offer a way of trying to protect your capital. What if you want wealth preservation and an income, however?
There are three funds explicitly designed to deliver this – particularly useful for people living off or supplementing their income from their savings/pension pot.
Momentum Multi Asset Value tries to take a value approach to selecting its underlying investments and also aims to augment returns through its asset allocation decisions. …
Aberdeen Diversified Income and Growth (ADIG) trades on a significant (15%) discount. That flatters its yield, which is over 5%. Its equity exposure is just 10% of its portfolio. Instead, its main focus is on private markets (unlisted) investments, which account for just under half the portfolio…
JPMorgan Multi Asset Growth and Income (MATE) was reorganised in 2021. Three years after launch, the trust was doing ok (outperforming ADIG and its performance objective) but the board felt it could do better. One significant change made was to the dividend, which no longer has to be covered from the company’s net revenue, so allowing the manager to invest freely in higher growth opportunities.
Read more here