By Dave Baxter, Investors’ Chronicle, September 23 2022:
It’s testament to the sheer uncertainty of recent times that not a single UK investment trust has launched in the first eight months of 2022. That compares with 16 over the course of 2021 and six in an unpredictable 2020. Some analysts reckon it might even mark the first such eight-month dry spell since the 1980s…
Need a dedicated allocation to Chinese private equity in your portfolio? There’s a trust for that. Interested in targeting a 4.5 per cent yield by investing in farmland – or getting inflation protection via exposure to supported housing schemes? Done…
This tells us just how specialist the humble investment trust has become over time. Nowadays, investors typically seek to use its closed-ended structure as a home for niche, promising and often highly illiquid assets – and shun new offerings that focus purely on listed stocks. Numerous as the existing equity trusts are, our chart below shows just how clearly vehicles with a more exotic remit have dominated the initial public offering (IPO) scene in recent years. Liontrust’s surprise failure to launch an environmental, social, and governance (ESG) equity trust as part of its popular sustainable investing franchise last year demonstrated clearly enough that investors nowadays tend to demand something more obviously differentiated – be that by asset class or thematic focus. Conversely, the ease with which the likes of renewable energy infrastructure trusts have conducted rounds of secondary fundraising this year gives another indicator that demand remains particularly strong in some of these idiosyncratic areas…
The one-stop shop
Plenty of investment trusts with a global remit differ significantly from the underlying market: take the high-octane nature of Scottish Mortgage Investment Trust (SMT), the emphasis the AVI Global (AVI) investment team puts on engagement with its investee companies, or the concentrated nature of Lindsell Train Investment Trust (LTI), not to mention its chunky exposure to the underlying fund management business of the same name. For the sake of argument, we will instead focus on those large trusts that might each be viewed as a one-stop shop for investors, or at least as a solid core holding: F&C Investment Trust (FCIT), Alliance Trust (ATST), Witan (WTAN), Bankers (BNKR) and Brunner (BUT)…
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