Pausing on equity reductions
Over the last couple of years, Seneca Investment Managers (Seneca IM), the manager of Seneca Global Income & Growth Trust (SIGT), has been reducing the trust’s equity weighting, in advance of a global recession that it now expects in 2021. Consistent with this view, the manager has increased SIGT’s weighting to gold and reduced net gearing (3.3% as at the end of September). Whilst it may make further equity reductions, we are now much closer to the point where these will cease, and it has decided to press pause for now (SIGT is now significantly underweight equities relative to its long-term allocation). Seneca IM expects its multi-asset strategy to strongly outperform equities in the downturn, although during such a period the trust would struggle against its absolute return-orientated benchmark.
Seneca Global Income & Growth Trust is an investment trust company. Co. invests in a diversified portfolio principally comprising U.K. and overseas equities, fixed income, property and other specialist assets. Co.'s investment manager is Seneca Investment Managers Limited. The valuation of the investment portfolio as at Apr 30 2017 was £72.9 million consisting of listed and unquoted investments.
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