Some random thoughts about individual trusts and markets.
Market overview
If the global economy is to avoid the hard landing that the markets seem to have convinced themselves it can, then it will be running in the face of some very strong historical experience. It is not just the inverted yield curve that has been flashing a warning about trouble ahead; all the leading economic indicators in the most widely followed series American investors follow have been suggesting a recession is coming, as the chart below suggests.
This series of the ten most important leading indicators that dates ...
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I am experimenting with a series of shorter videos covering specific asset classes and investment trust sectors. The notes this week include a video taking a fresh look at the bond market.
Bond market review This is the link to a short (14 minute) video looking at recent movements in the bond market. Anyone who is banking on an imminent peak in interest rates will have to be patient. The latest inflation figures in the UK and further resilience in the US economy means, if the markets are to be believed, that both the Bank of England (certainly) and the Federal Reserve (not quite so certa...
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I am experimenting with a series of shorter videos covering specific asset classes and investment trust sectors. The notes this week include the first of these, together with a short summary of my current thinking about the market cycle.
Market overview Once again I have reason to be grateful for technical analysis, which has kept me from making too grievous a mistake in thinking about the equity and bond markets so far this year. The essential message from the charts has been; don't rush to judgment and in particular don't buy too readily the argument that both equity and bond prices are...
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As promised I have posted here a topdown pictorial summary of market and investment trust performance in the first half of 2023, drawing on slides from a range of different sources. In due course I will record a video looking at trends and individual security performance in more granular detail.
To access the slides click on the link (not on the image) and use the password H12023. I am grateful to all the brokers and research houses which provide me with this raw material.
Q2 2023 market review as pdf
A reminder that without knowledge of your individual circumstances and t...
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I have added some further comments to some of the news that I summarised in the weekly podcast. Look out for my review of the year to date. It will be appearing shortly, for subscribers only.
MidWynd International The board of MidWynd International (MWY) surprised some market participants by announcing that, following the impending retirement of managers Simon Edelsten and Alex Illingworth later this year, they are taking the management contract away from Artemis and awarding it instead to Lazard Asset Management’s global quality growth team - this despite Artemis having earlier said that...
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The oldest story in the business
The oldest story in the investment business is that it is unhelpful to be sharing a consensus opinion. The behaviour of markets since the autumn last year has been a classic case in point. Those who were gloomy about equity markets and expected the declines of the first nine months to continue after the first leg of the rally from October onwards have been proved wrong as the equity markets have powered ahead, admittedly on narrow leadership, while all the predictions that bond yields would have to fall soon have also been confounded. Here we are - nine months...
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Private equity
The great debate about listed private equity trusts goes on. With some of the biggest trusts trading on persistent 40-50% discounts, the share prices either represent tremendous bargains or are advertising a warning that the sector is heading for a painful meeting with reality - but which is it? As regular readers will know, although I have long held a shareholding in HG Capital (HGT), I have never had much enthusiasm for private equity as a class. While happily acknowledging that private ownership in the right hands is often a superior business model, and the returns have b...
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Jonathan Davis This week's profile features Fidelity Special Values, managed by Alex Wright, a UK equity trust with a long track record, dating back to the days of Anthony Bolton. My Q and A is with Russell Napier, a historian and market strategist who made his name in Asia before returning to Edinburgh, where he is chairman of the MidWynd investment trust and Keeper of the splendidly named Library of Mistakes, a charitable project designed as a centre for the study of financial history, from which we can all learn, not least at a time like this.
Thoughts on the current market situation Th...
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Polar Capital Global Financials has had a very eventful two years. It was launched in 2013 with a seven-year fixed life but in April 2020 shareholders voted to extend it indefinitely although 39% opted to have their cash returned in a tender offer. The trust's shares have risen by over 70% since then and the number in issue has risen from 123m to 312m, thanks to regular share issuance, a C share offer, and a placing completed this past week. Polar Capital Global Financials is the only trust in the AIC's Financials sector and it has marginally outperformed its benchmark since its IPO. Financial...
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Launched just under five years ago, LXi REIT is one of the new breed of specialist property trusts. Rather than specialising in a single industry, it seeks out UK commercial properties that can be leased for at least 20 years until their first break clause and that have inflation-linked or fixed rental uplifts. Since its IPO, LXi's net asset value has compounded at 12.0% a year, well ahead of its 8% minimum target. While LXi did have to reduce its dividend a little due to the pandemic, it's rebounded strongly since and a 5% increase has been pencilled in for the year ending March 2023. On 20 J...
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