Around the World in Eight Ideas - Investment Trust Opportunities Beyond the UK
Although the UK now represents a paltry 3.5-4.0% of global equity indices, home bias in the domestic stock market is estimated at c 25% across institutional and retail investors. This persists across asset classes: in the Investment Association universe of open-ended funds, 28.1% of total AUM at the end of September 2023 was invested in UK sectors. This leaves a significant amount of investors' assets exposed to overseas markets that may be unfamiliar and harder to access. In such a situation, the temptation may to follow the c £110bn already invested in UK-based global equity ETFs. But do these truly offer diversification, when the weighting of the US in these indices is between 60% and 70%? In this note we argue that in order to achieve meaningful diversification, investors need to go beyond the obvious.
Baillie Gifford Shin Nippon is an investment trust company. Co. invest principally in small Japanese companies. Co. may invest in U.K. and overseas domiciled pooled funds, including U.K. listed investment trusts, that invest principally in Japanese securities. Baillie Gifford and Co Limited, a wholly owned subsidiary of Baillie Gifford and Co, has been appointed as Co.'s Alternative Investment Fund Manager. Baillie Gifford and Co Limited has delegated portfolio management services to Baillie Gifford and Co.
BlackRock Frontiers Investment Trust is an investment trust and its principal activity is portfolio investment. Co. invests in the securities of companies domiciled or listed in, or exercising the predominant part of their economic activity in, Frontier Markets. Investment may also be made in the securities of companies domiciled or listed in, or exercising the predominant part of their economic activity in, more developed markets but with significant business operations in Frontier Markets. BlackRock Fund Managers Limited (BFM) is Co.'s Alternative Investment Fund Manager, and BlackRock Investment Management (UK) Limited is Co.'s Investment Manager under a delegation agreement with BFM.
BlackRock North American Income Trust is an investment trust and its key activity is portfolio investment. Co. invests in a diversified portfolio of mainly large-cap U.S. quoted equities. Co. may also hold other securities from time-to-time including, inter alia, convertible securities, fixed interest securities, preference shares, non-convertible preferred stock and depositary receipts. Co. may also invest in listed large-cap equities quoted on exchanges outside the U.S., and in securities denominated in U.S. dollars and non-U.S. dollar currencies. Co.'s investment manager is BlackRock Investment Management (UK) Limited. As of Oct 31 2017, Co.'s investment portfolio totaled £113.7 million.
Polar Capital Global Financials Trust is an investment trust company. Co. invests primarily in a portfolio consisting of listed or quoted securities issued by companies in the financial sector operating in the banking, insurance, property and other sub-sectors. Co. has contracted Polar Capital LLP to act as the Alternative Investment Fund Manager.
Capital Access Group advises companies on effective engagement with investors. Our experienced team offers market-leading access with hard-to-reach investors, including smaller institutions, pension funds and private client fund managers. These under-serviced investors are located not only in London but across the regions of the UK and Europe. We have an unrivalled knowledge of this extensive audience, to whom our published research is distributed, as well as to larger institutions. We offer this service as part of an integrated investor communications strategy to promote a company’s investment story.
Our clients, ranging from AIM to FTSE 100 companies, benefit from our professional, long-term relationships with investors. Not only do we identify and target investors, we contact them directly and relay their views back to clients with analysis, interpretation and advice. This ensures that our clients are in control of their investor engagement. The objective is to improve the reach and engagement with investors, which in turn strengthens the share price.
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