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Opportunities for the optimistic investor

Opportunities for the optimistic investor: The cheap shares and investment trusts that could thrive post-lockdown

By ANNE ASHWORTH FOR THE DAILY MAIL
PUBLISHED: 22:01, 12 June 2020 | UPDATED: 10:29, 14 June 2020

Seldom has optimism been such a controversial state of mind. Anyone who dares to voice the hope that recovery may be possible is likely to be called delusional…

But stock market indices are anticipatory mechanisms. And despite some wobbles this week, they are sending out signals hinting conditions could improve, which may be worth heeding for those happy to be glass-half-full investors.

Here are some of the best opportunities to build an optimist’s portfolio in the UK, the US and in the energy sector…  

Clothing companies could lead this change, good for shares in Coats Group, the thread maker. In the near term, it may be boosted by a nationwide longing for something new to wear, if only because lockdown baking has widened waistlines…

Taylor Wimpey should benefit from the craving for a house with a garden among those locked down in a flat. The housebuilder’s shares – 101p at their nadir – have risen to 151.5p based on the apparent success of its virtual viewings service…

For a bet on smaller and medium-sized companies, James Carthew of QuotedData, the analysis group, suggests investment trusts such as Schroder UK Mid-Cap. Its holdings include rental homes group Grainger and Dunelm, the homeware retailer.

Aberforth Split Level Income provides exposure to entrepreneurial businesses, plus the prospect of an income. Both trusts are at discount, that is, their share prices do not reflect the full value of the trust’s holdings.

Anyone more interested in a thrill ride should consider oil and gas investment trusts trading at deep discounts. Carthew suggests Riverstone Energy which backs US and Mexican exploration and shale businesses. The trust is at a 23 per cent discount.

He adds: ‘If industries get a kick-start, copper, nickel and other materials will be needed. Blackrock World Mining trust – discount 12 per cent – would benefit from industrial revival.’

This could also improve the fortunes of CQS Natural Resources. This trust’s discount is 24 per cent – a reminder that it takes courage just now to be an optimist and that patience and plenty of spare cash are also required.

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