Inflation & Investment Trusts - Sep 2022
Inflation has now persisted beyond most people's 2021 expectations for a “short term blip” following the COVID crisis, and investors are increasingly under pressure to generate positive real returns in the first highly inflationary (i.e., >5%) environment since 1991. We expect a degree of asset price volatility to continue across all asset classes for quite some time.In this note we look at the factors behind the current inflationary environment, evaluate which ones are likely to persist and which may fall away quickly, and estimate the relevance/importance of each.
We conclude that the best opportunity for downside protection, as well as potential returns, comes from the only free meal in investing: diversification. By this we mean diversification across & with asset classes, across geography, and across strategies. We believe that this can be most effectively achieved through the use of investment trusts.
Aberdeen Diversified Income and Growth Trust is an investment trust, which invests via quoted and unquoted investments. Co.'s portfolio consists of investments from a range of asset classes. Co.'s portfolio may include equity-focused investments, alternative diversifying assets (including, but not limited to, high yield bonds and loans, emerging market debt, asset backed securities, property, infrastructure, commodities, absolute return investments, insurance linked, farmland, royalty-based investments and aircraft leasing) and low return assets such as gold, investment grade credit, tail risk hedging and government bonds. Co.'s investment is managed by Aberdeen Fund Managers Limited.
AEW UK REIT is a closed ended real estate investment trust company. Co. invests predominantly in a portfolio of smaller commercial properties in the U.K. Specifically, Co. invests in freehold and leasehold properties across the whole spectrum of the commercial property sector (office properties, retail warehouses, high street retail and industrial/warehouse properties). AEW UK Investment Management LLP is the investment manager of Co.
BlackRock Commodities Income Investment Trust is an investment trust company. Co.'s principal activity is portfolio investment.
Henderson High Income Trust is an investment trust company. A substantial majority of Co.'s assets are invested in ordinary shares of listed companies with the balance in listed fixed interest stocks. Co. invests predominantly in companies listed in the U.K. Co. has appointed Henderson Investment Funds Limited to act as its Alternative Investment Fund Manager, which delegates investment management services to Henderson Global Investors Limited.
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.
Primary Health Properties is a holding company and a real estate investment trust. The principal activity of Co. is investment in primary healthcare property in the U.K. and Ireland. Co.'s properties are leased principally to general practitioners, government healthcare organizations and other associated healthcare users.
Renewables Infrastructure Group is a closed-ended investment company, investing in and managing a portfolio of investments in renewable energy infrastructure project companies. Through its subsidiaries, The Renewables Infrastructure Group (UK) Limited, and The Renewables Infrastructure Group (UK) Investments Limited, Co. invests in operational renewable energy generation projects, primarily in onshore wind and solar PV segments, across the U.K. and Northern Europe. InfraRed Capital Partners Limited is Co.'s Investment Manager.
Ruffer Investment Company is a closed-ended investment company. Co. is externally managed by Ruffer AIFM Limited, a U.K. investment manager. Ruffer AIFM Limited is also the Alternative Investment Fund Manager of Co. Co. predominantly invests in internationally listed or quoted equities or equity related securities (including convertibles) or bonds which are issued by corporate issuers, supra-nationals or government organizations.
Schroder European Real Estate Investment Trust PLC. Schroder European Real Estate Investment Trust plc is a United Kingdom-based closed-ended investment company. The Company is engaged in property investment in the Continental Europe. The Company's objective is to target a dividend yield of 5.5% based on the euro equivalent of the issue price at launch. The Company's objective is to provide a regular and attractive level of income together with the potential for long-term income and capital growth. The Company's properties are located in Paris, Berlin, Stuttgart and Hamburg. The Company intends to invest in a portfolio of institutional grade income-producing properties with low vacancy and creditworthy tenants. It will invest principally in the office, retail, logistics and light industrial property sectors. It may also invest in other sectors, including, but not limited to, leisure, residential, healthcare, hotels and student accommodation. Schroder Real Estate Investment Management Limited is the Company's investment manager.
SDCL Energy Efficiency Income Trust PLC. SDCL Energy Efficiency Income Trust PLC is a United Kingdom-based closed-ended investment company. The Company is focused on providing investment solutions for energy sectors for the betterment of environment and infrastructure. Its investment business is primarily focused on clean energy and energy efficiency project finance. The Company also provides its services and solutions for healthcare, manufacturing, transportation and retail sectors.
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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