- Investors sought haven trusts over the past month
- Capital preservation trusts proving popular amid geopolitical instability
- UK-focused trusts disappoint as FTSE 100 stalls
Conflict in the Middle East, an ongoing war in Ukraine, stubbornly high inflation and interest rates… it is no wonder investors have been positioning portfolios for a rocky ride ahead.
Names with a reputation for low-risk investment strategies and a focus on corporate cash flows and dividends were popular in October, led by JPMorgan Global Growth & Income (JGGI).
More than 12% of all the investment trust purchases made over the past month on the AJ Bell platform were for shares in this trust, hardly surprising given its largely impressive performance track record.
It has bettered its Global Large-Cap Blend Equity benchmark over three, five and 10-year periods, and has been smashing it again over the past year, posting a 14.3% total return versus 3.19% for the benchmark.
UK MARKETS POOR IN 2023
That’s in contrast with City of London Investment Trust (CTY), also normally seen as a haven in troubled times.
While still popular with investors, it has underperformed its own UK Equity Income benchmark over the past year, returning 1.3% versus 4.6% from the benchmark, while returning -9% over six months, not helped by having large exposure to stocks in the FTSE 100 which has struggled of late.
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Vanguard's FTSE 100 ETF tracks the FTSE 100
The UK equity benchmark index is down nearly 2% year-to-date, while other indices have prospered. The tech-heavy Nasdaq Composite is up 30% this year, the S&P 500 is 14% ahead, while even Europe’s largest companies have posted positive returns. The Euronext 100 (Europe’s 100 largest companies) is up 5.2% in 2023 to date.
Elsewhere, capital preservation trusts proved popular, with RIT Capital Partners (RCP) and Personal Assets Trust (PAT) both featuring among the 10 most bought trusts in October, together accounting for roughly 9% of all investment trust purchases on the AJ Bell platform.
DISCLAIMER: AJ Bell is the publisher of Shares. The author (Steven Frazer) and article editor (Dan Coatsworth) own shares in AJ Bell.
