The price gains we have seen on many investment trusts in the past few weeks suggests that it was reasonable to highlight the potential for discount narrowing couple of months ago, even if I was a week or two premature in doing so. Falling bond yields and narrowing discounts is a potent backcloth for investment trust investors, and an encouraging one for the equity markets too. With inflation figures falling, it seems likely that we will have another end of year equity market rally, absent further bad news on the geopolitical front. Although some of the movements have been striking, there rem...
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The Federal Reserve, the Bank England and the European Central Bank have all held their interest rates this week and given out the same message that it is too early to be thinking about interest rate reductions. The equity and bond markets have decided that it is not, responding positively to a growing belief that the current rate-hiking cycle has peaked. Investment trusts are in demand again on this change in sentiment.
Relief rallies all round Having highlighted a potential turning point in my last set of comments, it seems that, having crawled over the wording of the latest central bank an...
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Some quick thoughts on developments last week. The US equity market is going into third quarter results season and the S&P 500 index has reached a critical point from a technical perspective.
Big picture macro It has been another tough week in the financial markets. The rise in the yield on the US 30-year bond to above 5%, its highest level since the summer of 2007, is an ominous development. While the yields on short-dated Treasuries are largely determined by the Federal Reserve's policy actions, the price of the so-called long bond is influenced more by the views of international marke...
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My latest markets review comes in two parts. Part 1 (a 30 minutes video) runs through a number of market charts to show the latest big picture developments in graphical form. Part 2 summarises other interesting features of the third quarter in pdf format, with some comments from me.
How to see the review material Here is a link to the first video. Please let me know if you have problems accessing the video. Also attached, in pdf format, is a set of slides that look in more detail at movements in bond markets and the investment trust sector. Q3 2023 market review If there is one chart that su...
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The analysts at broker Stifel made a good point this week about the differential in discount rates that's opened up between alternative assets trusts and plain vanilla equity ones. Whereas until two years ago the ratings on alternatives were generally superior, and often traded at premiums, while equity trusts were less handsomely rated, the reverse is now the case. Has this switchback gone too far?
Discount opportunities continued The story of the past 18 months is neatly captured in the chart that Stifel uses and which I could have readily replicated from other sources. You can see that di...
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I have updated the list of large and liquid trusts that I think look to have good risk/reward potential on the basis of their current discounts and added a comment about this week's interesting announcement from the board of Hipgnosis Songs Fund (SONG), one of the 15 names. If as appears likely we are close to the current peak in the interest rate cycle, you would expect to see that reflected in an end to the persistent derating which has characterised the sector since early last year.
Discount opportunities continued So the kick to Hipgnosis Songs Fund (SONG) from the Round Hill Music deal ...
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I promised to give a list of trusts that I think look to have good risk/reward potential on the basis of their current discounts. If as appears likely we are close to the current peak in the interest rate cycle, you would expect to see that reflected in an end to the persistent derating which has characterised the sector since early last year.
I created this list a week ago and by good fortune included Hipgnosis Songs Fund, which has already benefited from the agreed bid for Round Hill Music Royalty Fund announced this week. I will keep an eye on the performance of these 15 trusts from here a...
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This is the latest in our regular feature for subscribers which highlights potential discount opportunities in the investment trust sector. The ideas come from research by Kepler Intelligence, the well resourced investment trust research company, and represents the author's opinions, not ours. Please note the disclaimer at the end of this article.
China - yes or no? It has been a peculiar few years for investors in Asia. A distant memory though it may seem, China’s hardline approach to the pandemic was initially lauded by lots of people across the world, writes David Kimberley. Combined with...
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This is the eighth in a new monthly feature for subscribers which highlights potential discount opportunities in the investment trust sector. The ideas come from research by Kepler Intelligence, the well resourced investment trust research company, and represents the author's opinions, not ours. The big picture environment will be important in validating or not these suggestions.
Time to feel the music? Hipgnosis Songs (ticker SONG) has emerged as one of the more popular investment companies in the alternatives space since its IPO in 2018, writes David Kimberley. The trust invests in the ri...
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This is the seventh in a new monthly feature for subscribers which highlights potential discount opportunities in the investment trust sector. The ideas draw on research from Kepler Intelligence, the well resourced investment trust research company, and represents the author's opinions, not ours. The big picture environment will be important in validating or not these suggestions.
Bargains in Uk commercial property? UK commercial property has not enjoyed the easiest couple of years, writes David Kimberley of Kepler Intelligence. The pandemic emptied offices and retail stores, leaving questi...
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