Except in the UK where the veteran bond manager argues neither offer enough value to investors.
UK gilt yields climbed to their highest level in decades earlier this year, offering investors a yield of more than 4% but veteran bond manager Richard Hodges cannot see a good reason to invest.
The FE fundinfo Alpha Manager argued that gilts and sterling corporate debt offer little real value to investors. Instead, he has found the most attractive government bonds in regions outside the UK.
For example, he pointed to Romanian and South African sovereign debt, which offered yields of around 6.3% and 11% at the time of writing, well above what you could get in the UK. “Imagine the level of volatility you can realise but still achieve a positive return”, he explained.
It led the manager of the Nomura Global Dynamic to proclaim that he would invest in “government bonds over investment grade credit all day, every day”.
Performance of fund vs sector over the past 10yrs
Source: FE Analytics
Below, he also talks to Trustnet about why Russia was one of the worst calls he made in years, why flexibility is so important to the fund, and why large allocations towards high yield bonds are inappropriate in today’s market.
What is the fund’s process?
We identify and purchase bonds that will deliver attractive total returns in the prevailing environment. We like to describe our approach as ‘unconstrained’, but its more accurate to say we are highly flexible with very few constraints in terms of geographical reach or credit rating.
We use simple hedging techniques to control the exposures to credit risk and duration, aiming to reduce volatility through periods of market stress.
What differentiates your fund from its peers?
When we describe ourselves as ‘flexible’ we really mean it and we try to actively move the fund to benefit from the changing environment.
Sometimes we make changes slowly, but when unusual opportunities present themselves (for example at the start of the pandemic), we will move quickly to try and capture them.
From time to time, we will actively hedge the fund through periods of volatility. While other fixed income funds have access to the same hedging tools as us, we rarely hear competitors use them in the same way.
You have a very low allocation towards high yield. Is this a structural or tactical decision?
High yield bonds currently have very tight spreads, despite an increasing need for high yield firms to refinance that debt in the years ahead. We find better opportunities elsewhere, such as emerging markets or in the subordinated debt of European banks.
In the past, we have had allocations to high yield of more than 30% (at the risk of being a broken record: when we say we are flexible, we mean it) but it is not appropriate for the current fixed income market.
Duration is around five years – is this about average?
It is but it has changed significantly and we have had duration as high as eight years before. For example, after the Brexit vote in 2016, the protective hedges we had in place to guard against volatility included US treasury options that went rapidly into-the-money pushing duration to 10 years intraday.
By contrast, back in 2021, when major central banks told us that inflation was ‘transitory’, we thought differently, and built a short position in two-year and five-year US treasuries that pushed our Fund duration as low as two years.
2017-2021 were very strong years for the fund. What worked so well?
It was a wide range of environments, with a wide range of drivers for the fund. In 2018, the Fed hiked rates, which caused a poor environment for all fixed income markets, which is where our hedging came to the fore.
By contrast in 2019, risk assets were very strong and positions in European sovereign bonds (Portugal and Italy) were our best performers.
In 2020, hedging was vital in smoothing volatility when risk assets plunged during the pandemic. We also pivoted into investment grade credit, which offered extraordinarily positive returns for the first time in the fund’s history.
As risk markets then recovered, we moved ahead of markets into higher yielding, riskier assets in both credit and emerging markets.
Why did the fund struggle more than its peers in 2022?
One word: Russia. We held 5% of the fund in Russian sovereign bonds, which yielded 9% and the country had a debt to GDP ratio of 19%, while every analyst was certain that no invasion of Ukraine was on the horizon.
We were wrong. Following the invasion, sanctions from the Russian bank forced us to mark the bonds to zero and we rapidly had to exit our roubles hedges, which were hedging an exposure we no longer had.
What do you do outside of fund management?
My golden retriever has an insatiable desire for walks, even when the weather is atrocious, and I spend most of my time satisfying that demand.
Government bonds and gold are the main beneficiaries, while US stocks and European companies tend to struggle.
US president Donald Trump’s attack on the world order through his punitive global tariff tirade has shocked markets. Trustnet has written a lot this week about what fund managers think about the news, the likely winners and losers and how to diversify in a turbulent market.
The scale of these tariffs cannot be overstated. According to John Plassard, senior investment specialist at Mirabaud Group, if they are applied until 2026 US inflation will be 2.1 percentage points higher over 12 months, with a knock-on effect on 60% of commodities.
US growth will falter until the middle of next year due to weaker consumer activity and higher costs, with around 600,000 job losses in America’s retail, logistics and consumer sectors.
But the damage will not just be kept to the US. In the eurozone, for example, these measures could reduce GDP growth by between 0.3 and 0.5 percentage points, he said.
A chart from Robeco underscores how few areas investors will have to hide if global trade is adversely affected. It shows that only US government bonds, gold and, to a lesser extent, corporate bonds have a negative beta with global trade. This means that historically, when global trade has contracted, these asset classes have performed well, so they could be considered as hedges against a slowdown in trade flows.
The US dollar is broadly flat, although there are question marks over whether it will hold up this time around, or if it too could come under pressure.
Meanwhile, the worst areas to invest currently appear to be Europe, commodities other than gold, real estate and the US stock market – so pretty much everywhere else.
For investors who want to buy into asset classes that should do well going forward, Ed Monk, associate director at Fidelity International, had some suggestions.
He noted that bonds are already showing signs of strength in the short timeframe since Trump’s announcement on Wednesday.
“The yield on 10-year US treasuries is now just a fraction above 4%. It was 4.5% as recently as 18 February, the day before the peak in the S&P 500. Yields on similar bonds issued by other governments have also fallen,” he said. UK, German and French government bond yields are also down slightly, which means their prices have risen.
One option he suggested is the iShares Overseas Government Bond Index Fund, which tracks an index of global government bonds for a low charge of 0.11%. Another of interest could be the Colchester Global Bond Fund, a portfolio of mainly government bonds with a particular focus on investments that are sought after in times of uncertainty.
Then there is gold, which continues to shine. It has been the best asset to add to a portfolio over the past year and shot higher again in dollar terms this week after the announced tariffs.
It is already at record highs thanks to the uncertainty injected into financial markets this year and tends to perform best when fear is at its highest, said Monk.
“A straightforward way to gain exposure to gold is via the iShares Physical Gold ETC. For a low cost of 0.11% it will closely replicate the performance of the gold price.
“Another option is to buy a fund of gold mining company shares, such as the Ninety One Global Gold Fund. The fund is correlated to movements in the gold price but is affected by other factors as well.”
While I do not advocate for making snap decisions based on short-term noise, these tariffs are likely to have big and long-lasting implications for markets moving forward. Whether it be bonds, gold or even cash, it is certainly worth considering adding some diversification to your portfolio if you have not done so already.
What if Trump's tariffs were a shock tactic, designed to maximise leverage ahead of behind-the-scenes trade negotiations?
Let's face it, Donald Trump's tariff announcements came as a shock – for the stock markets, for future economic growth, for geopolitical relations and for central banks torn between a slowdown in global economic growth and expectations of rising inflation.
One thing is certain: there will be a before and after 2 April. And the markets, like the global economy, will have to absorb the shock.
How can investors navigate such an environment?
That depends to some extent on whether tariffs remain in force or whether America’s trading partners come to the negotiation table.
Scenario one: Customs duties are maintained
If 2 April marks “the day America takes back control”, as Trump has declared, we can now ask ourselves at what price. If the tariffs are applied until 2026, here are the main impacts:
There are three major strategic implications to Trump's decision on Wednesday evening under scenario one:
In short, scenario one is not just an announcement of tariffs but a breakdown of the global trading system. Supply chains, monetary policy, inflation expectations and valuation models all need to be recalibrated.
Scenario two: Trump’s tariffs are a shock tactic ahead of trade negotiations
What if Liberation Day was just a bluff that worked too well? The question deserves to be asked.
The markets are beginning to assess a second, more nuanced scenario: Trump's tariffs are a shock tactic, designed to maximise leverage ahead of behind-the-scenes trade negotiations.
Here are the major implications of scenario two:
Here are the economic implications of scenario two:
The investment implications of scenario two re as follows:
But make no mistake: even in scenario two, the rules of the global game have changed. The genie of economic nationalism is out of the bottle.
How do you invest in such an environment?
When the world's great balances are upset, when international trade becomes a battlefield of tariffs and when financial markets sway to the rhythm of political declarations, the ‘3D’ rule stands out more than ever: diversification, diversification and diversification.
But beware: it is no longer simply a question of diversifying your equity portfolio between Europe, the US and Asia. We now need to think in terms of economic regimes: structural inflation, the return of protectionism, the fragmentation of blocs. This calls for a new portfolio architecture that is more robust, more flexible and more resilient.
What does this mean in practical terms?
Firstly, diversifying asset classes: beyond listed equities, hedge funds help to capture volatility, private equity strategies remain attractive from a long-term perspective and gold is once again an essential building block in times of geopolitical and monetary tension.
Secondly, we need to diversify our sector exposure, focusing on the structural winners of a potential new cycle while reducing our exposure to sectors dependent on a globalisation that is faltering.
Finally, it means diversifying currencies and regulatory zones, because investing in 2025 also means protecting against political shocks. Legal, fiscal and monetary stability are becoming asset classes in their own right.
It is vital not to stand still in a changing world. Be global, agile, multipolar... and above all, accept that tomorrow's portfolio will not be like yesterday's. ‘Diversification, diversification, diversification’ is no longer just an option: it's a condition of financial survival.
Ultimately, 2 April will go down as a turning point in the history of world trade. Trump's announcements sent shockwaves through the world, with markets under stress, inflation on the rise and trading partners on the defensive. The certainties of globalisation are shattered, replaced by a logic of economic confrontation. In this new environment, every investor will have to rethink their bearings and their portfolios.
John Plassard is a senior investment specialist at Mirabaud Group. The views expressed above should not be taken as investment advice.
Every alternative asset class studied would have lowered a portfolio’s volatility over 12 months.
Markets have been thrown into chaos after Donald Trump’s ‘Liberation Day’ caused global stocks to drop amid rising uncertainty and a deteriorating geopolitical picture.
Investors may view now as a good time to diversify, particularly away from the US market, which has come under pressure already so far in 2025. Indeed, the S&P 500 is down 6.7% in sterling terms so far this year. Of the main market indices, only two – Europe and the UK – are in meaningfully positive territory, as the below chart shows.
Performance of indices in 2025 so far
Source: FE Analytics
While one option may be to increase the allocations here, as some have suggested, there are alternatives to consider. As such, Trustnet has looked at how portfolios can be changed by adding a new asset to the mix.
To do this, we have taken a traditional 60/40 portfolio in equities and bonds, represented by the MSCI World and Bloomberg Global Aggregate index respectively, as a baseline for a balanced investor.
We then took a proportionate amount from each allocation and added a 10% weighting in different asset classes. For gold, we used the S&P GSCI Gold Spot index. We also looked at hedge funds (HFRI Fund Weighted Composite index), infrastructure (FTSE Developed Core Infrastructure index), oil (S&P GSCI Brent Crude Spot), private equity (IT Private Equity sector) and property (IT Property – UK Commercial sector).
We analysed each portfolio’s performance over one, three, five and 10 years, as well as the difference in the volatility and maximum drawdown (the amount an investor would have lost if buying and selling at the worst possible times).
Over the past 12 months, adding almost every alternative asset class would have benefited investors, except oil, which would have lowered returns. All the asset classes we looked at would have reduced the maximum drawdown and lowered the overall volatility of a portfolio, as the table below shows.
Source: FE Analytics
In the shorter timeframes (over one year and three years), the best addition to a portfolio would have been gold. Returns from a portfolio with 10% in gold were almost double that of a traditional 60/40 portfolio over 12 months, with investors making 6.4%, and were four percentage points ahead over three years.
The gold price has rocketed over the past few years as uncertainty surrounding the US government, war in Europe and the Middle East, and a generally fractured global landscape have caused investors to look towards safe havens.
Performance of index over 10yrs
Source: FE Analytics
This week, gold rose again after US president Donald Trump’s ‘Liberation Day’ in which he unveiled a bevy of new tariffs on countries around the world.
However, Adrian Ash, director of research at BullionVault, noted the rise was only in dollar terms as the currency sold off. The spot price fell in euro and sterling terms.
“Longer term, however, the reasons behind gold’s stellar start to 2025 are only stronger now that Trump has announced his tariffs. Weaker trade, higher input costs and shrinking margins are badly hurting the stock market, while geopolitical mistrust is deepening. Such a gloomy outlook for economic growth offers the perfect backdrop for further gains in gold,” he noted.
The precious metal has proven popular with investors, especially so far in 2025, when funds specialising in gold were among the most bought portfolios in the first quarter.
Over longer timeframes, oil has been the best place to put additional cash, with the spot price rising significantly since the Covid pandemic in 2020 and up some 95% over the past decade.
Performance of index over 10yrs
Source: FE Analytics
Last month, Nick Kirrage, manager of the Schroder Income fund, said oil will not stray too far from its current level from this point onwards but remains a compelling investment case nonetheless.
Adding 10% of a portfolio to an oil exchange-traded fund tracking the Brent crude spot price would have added around 14 percentage points over the past decade, with much of this coming in the past five years. However, it would also have increased maximum drawdowns and volatility as the asset class is not a traditional safe haven.
Next up was gold, which would have added around 8 percentage points over 10 years, while infrastructure and private equity also enhanced returns and lowered volatility (although the maximum drawdown was higher on both).
Only property and hedge funds failed to add meaningfully to a 60/40 portfolio over the long term, although the former has been a strong addition over the past year, while the latter has served investors well in the medium term.
Following Liberation Day tariffs, Hargreaves Lansdown explains which funds are appealing defensive picks.
‘Liberation Day’ is here, bringing a tidal wave of new tariffs. US president Donald Trump has issued reciprocal tariffs on most of the US's major trading partners, ranging from 34% on China (and more in some Asian countries) to a relatively light 10% on the UK.
Markets have generally not responded well, with most global stock markets opening in the red. For some experts, this new wave of tariffs was the start of a trade war.
Victoria Hasler, head of fund research at Hargreaves Lansdown, reminded investors that the best course of action is to “sit tight and ride out” short term volatility, but also noted there could be opportunities to get defensive now ahead of future uncertainty. Below she identified three defensive funds that “remain relevant and are in some ways more compelling” in this more unstable market.
Invesco Tactical Bond
Hasler said: “Bonds are as still as attractive as they were at the start of the year." Both 10-year gilts and US treasuries maintain yields above 4% and, while they could fall in the future, the Hargreaves team remains “bullish on bonds”.
“By looking at bonds now, there is potential for capital gains in the future, as well as being rewarded with inflation-beating income in the near term, and the potential to diversify portfolios.”
As a result, a fixed-income fund such as the Invesco Tactical Bond fund could be an attractive option. It aims to deliver a strong long-term total return through a combination of both capital growth and income. Over 10 years, it is up 30.3%, beating the IA Sterling Strategic bond sector average of 27.9%.
Performance of fund vs sector and benchmark over the past 10yrs
Source: FE Analytics
Manager Stuart Edwards and Julien Eberhardt aim to alter the funds’ investments based on their interpretations of the “bigger economic picture”, she said. In times of volatility, the managers will try to shelter the fund and seek stronger returns when more opportunities become available.
Because the managers have very little constraints on where they can invest, Hasler said it was a good choice for exposure to the wider bond market that “takes away the hassle of deciding what type of bond to invest in and when”.
Artemis US Smaller Companies
While tariffs will be challenging for many businesses, Hasler explained domestically driven smaller companies in the US had the potential to benefit. She pointed to the Artemis US Smaller Companies fund, led by veteran stockpicker Cormac Weldon, as a compelling option in this space.
Weldon and his team aim to identify the sectors that are benefitting and struggling from the economy's overall performance and adjust their strategy accordingly.
Over the past decade, it is the best-performing fund in the IA North American Smaller companies sector, up 179.7%, beating the Russell 2000 by more than 70 percentage points.
Performance of fund vs sector and benchmark over the past 10yrs
Source: FE Analytics
While it slipped into the bottom quartile over the past 12 months, Hasler said the manager's approach should allow it to “take advantage of new or changing policies that Trump puts in place”.
However, Hasler warned that US smaller companies were “not a trade for the faint-hearted” as they may be more susceptible to market volatility than their larger counterparts. Nevertheless, she concluded: “Once tariffs are in place, we think the more positive story could start to come through.”
Troy Trojan
Hasler identified the Troy Trojan fund, led by FE fundinfo Alpha manager Sebastian Lyon and co-manager Charlotte Yonge, as another compelling option given the current market volatility.
Hasler explained that the fund was a classic defensively minded portfolio that aims to steadily grow investors' money over the long term and limit losses when markets fall, rather than “trying to shoot the lights out”.
Over the past decade, it is up 66.5%, a third-quartile result, but has delivered a top-quartile return over the past 12 months.
Performance of fund vs sector and benchmark over the past 10yrs
Source: FE Analytics
Hasler explained this was because of the fund's significant gold allocation, “which has acted as a safe haven during times of uncertainty”. Indeed, the price of gold has surged to more than $3,000 this year, while gold funds were some of the best-performing strategies in the first quarter.
Additionally, the fund has other defensive allocations such as cash, index-linked bonds and established companies with sustainable earnings, which can provide further protection in challenging markets. As a result, the fund can “take advantage of the attributes of gold without putting all of their eggs in one basket”.
Man Group expects increasing dispersion to create mispricing and investment opportunities in the high-yield market.
This is a complex moment for the global economy. After a relatively benign period, the policies of the US administration threaten to destabilise its fragile equilibrium. The uncertainty surrounding the implementation of tariffs and the resolution of geopolitical tensions continues to create a difficult backdrop for financial markets.
The impact of tariffs is unpredictable and there are likely to be implications for both sides. Tariffs are not a zero-sum game. Certain sectors are particularly vulnerable, such as auto makers, which have long and complex supply chains. Some of the tariff impact has been priced through currencies but the overall impact is erratic and hard to forecast.
We always adopt an opportunistic, stock picking approach to the high-yield market but we believe this approach is particularly apt for this environment. Individual sector selection has been very important over the past 12 months and we believe dispersion is only likely to increase. This means we will see more effective pricing of credit risk and greater differentiation than there is today. We are positioned to exploit this trend in 2025, rather than taking any significant macroeconomic views within the portfolio.
In aggregate, valuations in the high-yield sector are very rich but this belies significant differences beneath. For example, credit spreads in the US are among the lowest we’ve seen in recent history. The market is priced solely for an optimistic outcome for the US economy. Given the unpredictability of the new US administration, we believe a range of outcomes is plausible, and investors need to tread very carefully. In contrast, the European market is pricing in at least some potential for slowing growth. With that in mind, we are finding far more opportunities in Europe over the US.
Over the past 12 months we have benefited from exposure to sectors such as real estate and financials. The areas we are currently most active are those where there has been a lot of dispersion. This is a simple concept, reflecting the gap between the widest spread name in a sector over the tightest spread name in the sector, but it is illuminating on the market’s view of the forward credit quality of individual businesses.
At the moment, the greatest dispersion is in areas such as media, telcos, real estate and energy, and this is where we are focusing our attention. We have sought to commit the most capital to sectors that are trading at cycle-wide valuations. Today, some of the most cyclical sectors – leisure, automotive and consumer focussed sectors – are actually trading at cycle-tight valuations. We’re avoiding those areas, yet we see low tracking error funds extremely exposed to some of these cyclical sectors.
Although valuations are high, fundamentals in high-yield are stronger than they have been for some time. Much of the higher risk and more complex lending has moved into leveraged loans and private credit, which have seen significant growth as borrowers have raised capital outside the high-yield market.
While this has improved the fundamentals of high-yield, there are cracks starting to appear in leveraged loans and private credit. This is creating opportunities, with bond holders able to refinance the debt at substantial discounts and then improve the terms of the lending. However, it requires strong structuring expertise and is not an option open to everyone.
It is possible that there will be a fall-out from some of the more problematic lending. There is a maturity wall ahead and the longer rates are at these levels, the more problematic those refinancing issues are going to become. However, ultimately it leads to asset class volatility. That will drive dispersion and create attractive options for opportunistic investors.
Today, there are some opportunities emerging from cross-border deals. We are seeing activity in the financial sector, across both banks and other financials. For example, we have seen bank-owned fund managers buying insurance-owned asset managers, a consolidation trend that can continue. In the right environment, this can generate strong bond returns. However, these opportunities are relatively selective.
For the most part, it is single name ideas that are driving returns. The spread duration of the fund – the extent to which its price changes for a given change in its credit spread – is much lower than the overall market as we want to create a stable risk-adjusted yield without taking on too much market risk.
We cannot say with any certainty how the next 12-24 months are likely to evolve in financial markets. However, with valuations where they are, coupled with the prevailing uncertainty, we believe dispersion is going to pick up, and we want to be actively exposed to the mispricings that shift will create.
UK investors are encouraged to take out their tin hats.
As Donald Trump’s tariffs on all trading partners rewrite the rules of global trade, winners and losers are emerging, according to experts.
The UK, which will be subject to tariffs of ‘only’ 10%, appears to be a relative safe haven. ‘Tin hat stocks’, such as UK property and insurance companies, have the resilience to cope with the current turmoil, according to Simon Edelsten, chief investment officer of Goshawk Asset Management.
Gilt yields have fallen, which “makes UK debt interest lower, which is good, but also reflects lower growth prospects, which is bad”, Edelsten said. “Economically sensitive sectors such as banks and commodity stocks may not cope so well.”
James Henderson, co-manager of the Lowland Investment Company and Law Debenture, chipped in: “There will still be sectors for smart stock-pickers that will be relatively unaffected. Domestically focused UK companies are on such low valuations that this will be just noise for many of them.”
Dan Coatsworth, investment analyst at AJ Bell, agreed that the FTSE 100 still has some life in it, thanks to its more defensive names. “The FTSE 100 might have been in negative territory but it fell half the amount of Germany’s DAX index,” he said.
“GSK and AstraZeneca were among the rare risers on the FTSE 100 as they clawed back recent losses and also fell under the category of defensive stocks now high up investors’ shopping lists. Diageo was another riser as investors were relieved that tariffs on goods from the UK weren’t as punishing as previously feared.”
In the days and months ahead, Coatsworth believes utilities and tobacco could do well. “Energy expenses are unavoidable and tobacco is highly addictive, meaning those hooked on nicotine are more likely to prioritise the last pennies in their wallet on such products,” he said.
Energy transmission specialist National Grid, tablet seller Haleon and cigarette/vape maker British American Tobacco were also among the biggest risers on the UK stock market.
Among the losers, Coatsworth listed JD Sports, which is increasingly US-focused and was among the biggest fallers on the FTSE 100, and Dr Martens, which is one of the many companies reliant on Vietnam (where Trump imposed a sky-high 46% tariff) for a lot of its products. The company will now be looking hard at alternative sources, he said.
Performance of indices over the year to date
Source: FE Analytics
Outside the UK, revisions to European earnings have not been following share price action, according to Charles-Henry Monchau, chief investment officer at Syz Group. This means that EU stocks are getting more expensive, limiting upside potential, he said.
As for the US, it has mainly faced negative consequences from its own policies, with US and tech-based indices falling.
And yet, Derren Nathan, head of equity research at Hargreaves Lansdown, still sees some opportunities in the US and believes investors can’t ignore the world’s largest stock market.
“The largest US companies have an impressive track record of outperformance, which we believe reflects a favourable legal framework and tax regime, as well as high levels of innovation. While that might present some opportunity, it’s also wise to consider diversifying into different sectors,” he said.
His picks for investors looking to profit from US weakness include medical technology provider GE Healthcare. It possesses “huge volumes of data generated by medical imaging tests, with plenty of scope for artificial intelligence to improve patient outcomes and efficiency – an opportunity the company is pursuing aggressively”, he said.
He also backed Nvidia, not just for its chips, but also for the CUDA software platform that enables users to optimise the hardware.
Finally, Uber has plenty of runway for growth and is “transitioning into a global transportation powerhouse, offering food delivery and freight services”, he said.
Rathbones’ David Coombs thinks it is too early to aggressively add to equities, but he is keeping “plenty of cash to take advantage of any outsized moves in high conviction names”.
For George Maris, chief investment officer and global head of equities at Principal Asset Management, today’s news “fundamentally reinforces how we assess risk and opportunity”, reminding investors that the key is building resilient portfolios.
“This is done not merely by investing in stable companies, but by focusing on companies able to shape their destiny regardless of the macroeconomic backdrop. Unpredictable environments make it crucial to invest in businesses able to withstand volatility, adapt to emerging opportunities and risks, and generate economic value,” he said.
“This is the foundation of private capital investing – buying at an attractive price and selling at a disciplined price. The same principle applies in public markets.”
US tariffs will have ‘immediate and lasting’ consequences on inflation and growth.
US president Donald Trump has unveiled a raft of new tariffs on countries he believes are taking advantage of America. The scale has been massive, with new tariffs of almost 50% for many Asian countries, 20% for Europe and a milder 10% for the UK, which the president referred to as a baseline charge.
World leaders responded by talking about countermeasures, retaliation and the need to protect national interests, which is “fighting talk” according to Neil Birrell, lead manager of the Premier Miton Diversified Fund range.
“Let’s be clear; the US has started a trade war,” he said.
The immediate reaction of financial markets was a run for safe-haven assets such as gold and government bonds, and a big fall in equity markets and the US dollar.
For Birrell, this shows how problematic these decisions will be for US consumers, with “a fall in the stock market having a real world impact on their wealth, as they are so invested in it”.
But there will be worldwide repercussions too, such as increased costs and inflation, reduced economic activity, reduced company profitability and damages to consumer and business confidence.
“The health of the US domestic economy is very important to the well-being of the world economy. The US has been showing signs of weakness recently and there is nothing in what is going on now that will help it in the short and medium term. As for the long term, correcting trade imbalances should be good for the domestic US economy, but at what short-term cost?” he asked.
“It is hard to know how this will play out. The problem is the unpredictability of the future at present and markets don’t like uncertainty. The sooner there is a clear line of sight, the better.”
On the face of it, the UK has got off lightly, according to Simon Edelsten, chief investment officer at Goshawk Asset Management. But the details are “still vague; the maths behind it unfathomable”.
“Cars made in the UK will probably be sold into Europe rather than the US. The next largest UK export to the US is pharmaceuticals. No one is sure from Trump’s ramble whether the tariffs cover all pharmaceuticals. A US citizen taking a drug made by, say, GSK, is unlikely to switch to a cheaper medication, so will just have to pay the higher price,” he said. “Overall, for businesses, chancellors and US consumers, there is nothing good (or even coherent) about these tariffs.”
Rathbones’ David Coombs said this was “classic Trump shock-and-awe” and merely a negotiating tactic.
“Governments around the world scramble for a response. Australia and the UK call for calm heads, while the EU and Canada are more combative. This is clearly a negotiating tactic,” he said.
“On balance, I think common sense will prevail and some concessions will be made to the US, which will allow Trump to claim victory for the ‘rust belt’. However, the next few weeks will be challenging, with risks and opportunities aplenty.”
Birrell agreed that there is “some room for negotiation”, however, the impact is “immediate and lasting and it’s just a case of how bad the scarring will be”.
The main consequence, he said, is that an element of these tariffs will be permanent, as the US administration needs to raise revenue to fund tax cuts.
Seeing the glass half-full, James Henderson, co-manager of the Lowland Investment Company and Law Debenture, admitted we are heading into “new territory”, but to him the picture is “not all bleak”.
“The reason inflation has been so low since the 70s is because of globalisation, which has brought a lot of prosperity to much of the world. You cannot retreat from globalisation without feeling the negative impacts,” he said.
“But it is easy to overreact. Equity markets are shaken today, but with the threat of inflation rising again, equities have to be part of the investment mix. There will still be sectors for smart stockpickers that will be relatively unaffected. Domestic-focused UK companies are on such low valuations that this will be just noise for many of them.”
James Syme, manager JOHCM Global Emerging Markets Opportunities fund, said that the mindset right now should be to buy on the rumour and sell on the news.
Performance of indices over the year to date
Source: FE Analytics
Mexico and China continue to be the two emerging markets most exposed to the new trade policies but both have outperformed, he noted.
Year-to-date trends show every Latin American market has had a positive return in US dollars, with improved growth prospects even in China, where the historically riskier parts of the asset class are attracting investors as uncertainty grows about where the pain of tariffs will ultimately be felt.
These positive returns stand in contrast to a negative year-to-date return from MSCI US, with MSCI US Growth down 3.9%. On the other hand, former darlings India, Taiwan and Korea have underperformed.
“These are recent trends and, so far, short term,” Syme said. “One swallow doesn’t make a summer but, while the global economic and political environment remains volatile, if we were asked what an emerging market bull market looks like, we would say it looks like this.”
Fidelity Japan’s largest shareholder supports the merger proposal.
The board of AVI Japan Opportunity Trust (AJOT) has proposed a merger with Fidelity Japan. The proposal comes ahead of Fidelity Japan’s continuation vote in May and the retirement of its manager, Nicholas Price, at the end of this year. The trust’s assistant portfolio manager, Ying Lu, will become its lead manager on 1 October.
Fidelity Japan’s largest shareholder, City of London Investment Management, is in favour of the merger but the trust’s board has yet to be convinced.
Norman Crighton, chair of AVI Japan Opportunity Trust, said: “We have sought to engage with the Fidelity Japan trust’s board on numerous occasions to discuss the combination of the two companies to create a market-leading Japanese investment trust.
“We were disappointed to read in Fidelity Japan’s final results statements that the board recommends a continuation of the status quo, with no liquidity offered until 2028, instead of engaging in constructive dialogue regarding our proposal, which we believe is in the best interests of all shareholders.”
The AVI trust has a market value of £214m and would benefit from extra firepower should the merger come to fruition. Creating a larger vehicle would provide increased liquidity and cost benefits, its board said.
Joe Bauernfreund, AVI Japan Opportunity Trust’s investment manager and chief executive officer of Asset Value Investors, said: “The investment case for Japan is extremely compelling. We believe that now is the time to strengthen our position, which is why we are proposing to merge with Fidelity Japan Trust. An enlarged asset base will enable us to be a more dominant shareholder in the companies we invest in, making our engagement even more likely to succeed.”
Fidelity Japan has a market capitalisation of £192m and shares are trading on an 11.2% discount to its net asset value (NAV). If the merger succeeds, shareholders in Fidelity Japan would be offered a cash exit capped at 25% of the trust’s shares in issue.
City of London Investment Management holds approximately 23% of Fidelity Japan’s issued share capital and supports consolidation in the investment trust sector, according to portfolio manager Michael Sugrue.
“The manager of AVI Japan Opportunity Trust has delivered strong investment performance since inception and the ongoing discount control mechanisms implemented by the board have protected shareholder value in an environment where many other closed-end funds have seen their discounts significantly widen,” Sugrue said.
AVI Japan Opportunity Trust will buy back shares if its discount exceeds 5%. From the trust’s initial public offering on 23 October 2018 until 31 March 2025, its shares have traded at an average discount of 0.05% compared to 9.35% for Fidelity Japan over the same period. It also offers its shareholders an uncapped annual exit opportunity.
Bauernfreund said: “Fidelity Japan shareholders rolling into AVI Japan Opportunity Trust will benefit from an immediate uplift in the market value of their shareholding, given the trust’s current discount, while its robust discount control mechanisms provide protection against material discount widening.”
Performance of trusts vs benchmark since AVI Japan Opportunity Trust's inception
Source: FE Analytics
The two trusts have different investment approaches. AVI Japan Opportunity Trust focuses on small-caps and seeks to address material undervaluation through active engagement with management, boards and other stakeholders.
Fidelity Japan’s investment team focuses on bottom-up stock selection and is based in Japan. Price and Lu look for companies with superior mid- to long-term earnings growth potential, competent management focused on raising shareholder returns and attractive absolute and relative valuations.
He will step back from the company’s Income and Growth portfolios in October.
Veteran investment trust picker Peter Hewitt is to retire from fund management in October after 17 years running the £147.5m market capitalisation CT Global Managed Portfolio Trust.
From 1 June 2025 the portfolios will be managed by Adam Norris and Paul Green, who will be supported by Hewitt until his retirement at the end of October.
They will fall under the broader EMEA multi-asset solutions team (of which they are members), which is headed by F&C Investment Trust fund manager Paul Niven.
Norris and Green have a combined 35 years of investment experience and currently manage a number of income and global growth multi-asset, multi-manager portfolios with assets totalling circa £1bn, Columbia Threadneedle said in a statement.
“While the new portfolio managers have some different perspectives on how the portfolios should be positioned, the company will continue to invest in a broad spread of investment companies, covering a variety of geographies, sectors and investment managers,” Columbia Threadneedle noted.
Since its launch in April 2008, the trust has made investors 155.4%, almost double the returns of the average peer in the IT Flexible sector and 23 percentage points behind the FTSE All Share index.
Performance of trust vs sector and benchmark since launch
Source: FE Analytics
James Carthew, head of investment company research at QuotedData, said: “We’ll be sorry to see Hewitt go. CT Managed Portfolio shareholders will miss the benefit of his wisdom. I wish I wasn’t unnerved by the line ‘the new portfolio managers have some different perspectives on how the portfolios should be positioned’ but I am. The thinking behind that will need communicating to investors.”
Darius McDermott, managing director of Chelsea Financial Services, suggests several funds he believes are well-positioned to take advantage of structural trends and deliver long-term growth.
Donald Trump’s Liberation Day tariffs and his unconventional, unpredictable approach to policy-making is giving investors a headache. This year’s sell-off in US equities, especially the largest tech stocks, adds to the sense of foreboding.
As Darius McDermott, managing director of Chelsea Financial Services, said: “Donald Trump’s Liberation Day has markets on a knife-edge. Investors today must contend with what we like to call ‘TILT’, or Trump-induced liquidity turbulence – a world in which one tweet, one tariff, or one interest rate surprise can send markets reeling.”
For investors unsure of how to position their portfolios amidst the maelstrom, McDermott suggested a barbell approach. He highlighted a range of funds exposed to long-term trends and structural shifts, balanced out with bond funds to provide ballast.
“In a world where Trump-induced liquidity turbulence can turn markets upside down overnight, the winners will be those who look past the noise and focus on the bigger picture,” he stated.
One bigger picture trend is the revival of the European economy. Europe is stepping out of America’s shadow with commitments to increase infrastructure and defence spending through initiatives such as Germany's fiscal reforms and the European Union’s ReArm Europe programme.
“In the European economy, innovation is booming,” McDermott said. One fund poised to ride the wave of Europe’s resurgence is Liontrust European Dynamic, which “zeroes in on resilient, high-growth businesses”.
The £1.8bn fund is managed by James Inglis-Jones and Samantha Gleave, who focus on historical cashflow performance and aim to buy companies that are generating a high cashflow for their asset base or market capitalisation. The investment process includes market regime indicators, which guide the fund managers’ market outlook and style tilts.
Liontrust European Dynamic is the second-best performing fund in the IA Europe Excluding UK sector over 10 years to 1 April 2025 and the third-best over five years. It has an FE fundinfo Crown Rating of five, placing it within the top 10% of its sector for alpha generation, controlled volatility and consistent outperformance over the past three years.
Performance of fund vs sector and benchmark over 10yrs
Source: FE Analytics
Closer to home, the UK’s small and mid-cap companies offer “a hotbed of underappreciated potential”, McDermott said. “With strong balance sheets and serious growth prospects, these companies are well-placed to thrive over a longer horizon.”
Strategies unearthing these hidden gems include Rosemary Banyard’s VT Downing Unique Opportunities fund and Rory Bateman’s Schroder British Opportunities investment trust, he said.
Banyard joined Downing in March 2020 to launch the Unique Opportunities fund, having previously managed money at Sanford DeLand and Schroders, where she ran the Schroder UK Mid Cap fund, amongst other strategies.
At Downing, she oversees a portfolio of 25-40 stocks that she believes have a unique outlook and enduring competitive advantages that are difficult to replicate.
At Schroder British Opportunities, Bateman and his colleagues invest in fast-growing young businesses across public and private equity markets. Unquoted holdings include: Easypark, which helps drives find and pay for parking; Expana, which provides global commodity price data; and Cera, a home care and healthcare company.
For investors who prefer a broad global mandate, McDermott highlighted Morgan Stanley Global Brands, which “provides exposure to world-class companies with serious pricing power – the kind of companies that weather storms and keep customers coming back, recession or not”.
William Lock, head of international equity, runs the fund with a large team. He and his colleagues look for high-quality companies with dominant market positions and powerful intangible assets.
Performance of fund vs sector and benchmark over 10yrs
Source: FE Analytics
For investors willing to cast the net a bit wider, McDermott proposed looking at infrastructure funds such as First Sentier Global Listed Infrastructure. Essential services such as transport, utilities and energy should continue to grow, regardless of who sits in the White House, he observed. American Electric Power Co. and National Grid are the £1.3bn fund’s largest holdings.
Performance of fund vs sector and benchmark over 10yrs
Source: FE Analytics
Sustainable investing is another long-term theme and here, McDermott’s pick was J O Hambro Capital Management’s Regnan Sustainable Water and Waste fund. “It focuses on companies tackling the global water crisis and waste management challenges, sectors that are only set to grow as populations rise and regulations tighten,” he said.
The fund was launched in September 2021 and is managed by Bertrand LeCourt and Saurabh Sharma.
Performance of fund vs sector and benchmark since inception
Source: FE Analytics
Another strategy providing an element of diversification is Ned Naylor-Leyland’s $1bn Jupiter Gold & Silver fund. “Tangible assets should provide a complementary hedge, particularly given central banks’ penchant for flip-flopping on rates and inflation refusing to stay buried,” McDermott said.
“Jupiter Gold & Silver offers exposure to precious metals and mining equities, ensuring a portfolio isn’t entirely at the mercy of central bank indecision.”
Performance of fund vs benchmark since inception
Source: FE Analytics; the fund has two benchmarks – the gold price and the FTSE Gold Mines index
Finally, McDermott suggested adding an anchor to the portfolio in the form of Invesco Bond Income Plus, an investment trust focusing on high-yield bonds. “With Trump the ringmaster of daily volatility, investors will need some ballast in their portfolios and bonds can do just that,” McDermott said. “Invesco Bond Income Plus delivers steady income streams while insulating against wild market swings.”
The trust had a dividend yield of 7.1% and was trading at a 1.7% premium as at 1 April 2025.
Its managers, Edward Craven and Rhys Davies, invest across three areas of the high-yield bond market: income generators (bonds issued by non-financial companies that pay a high level of income to compensate for their leveraged balance sheets); banks and subordinated financials (which are paying a premium over other areas of the market); and credit-intensive bonds (which have come under price pressure but which Craven and Davies believe have the right plans in place to turn things around).
Despite the Investment Association (IA) seeming to neatly split the Asian region into sectors, including and excluding Japan, the underlying indices of funds within the region are broad and varied.
For many years Asia has been viewed an attractive region to invest in given its superior rates of economic growth and large and growing populations, including two of the world’s largest countries in India and China.
However, as anyone who has invested in China will tell you, economic growth and large populations don’t always result in superior stock market returns over the long term.
But what regions and markets are investors really getting exposure to within an ‘Asia’ allocation?
Variety of indices
Despite the Investment Association (IA) seeming to neatly split the Asian region into sectors, including and excluding Japan, the underlying indices of funds within the region are broad and varied.
In the table below, we show the country exposures of various Asia benchmarks, and you’ll see that both the number of indices, and the difference in allocations to China, India, Taiwan and Australia, are stark.
Country weighting of Asia benchmarks
Source: AJ Bell
Whilst not as stark, the variance in sector allocations between the indices is also notable, with Asian developed markets typically associated with lower technology and higher financial services and basic materials exposures.
Whilst the composition of a benchmark is most pertinent for passive investing, it is also a telling feature for active funds, as the choice of index typically shows what a manager perceives their most fitting opportunity set to be.
Across such a diverse asset class and with such a variety in indices, peer group analysis becomes more difficult to assess due to the different structural weights that funds have.
The chart below demonstrates this challenge to sector-relative performance analysis, showing an 18 percentage point spread in total returns between the region’s best and worst performing indices in 2024.
Returns of Asian indices in 2024
Source: AJ Bell
As ever it is therefore important to understand the most appropriate index for any individual fund and consider its relative returns accordingly.
Asia funds investors may consider
At the start of 2025 we shifted our allocation to the Asia region within the AJ Bell portfolios to a mixture of emerging markets excluding China and dedicated China funds, which, whilst broader than a direct Asia fund, include a large weighting towards Asian countries.
We do however use Developed Asia Pacific strategies as these tend to not double up our exposure to emerging market ex China and China holdings. Elsewhere within our business we continue to favour broader Asia Pacific funds.
Jupiter Asian Income
Lead manager Jason Pidcock has been a stalwart of the sector for many years having worked at Newton prior to joining Jupiter in 2015. He invests across Asia, including Australia, however his long-term pessimistic view of China has resulted in a structural underweight to the country, which differentiates the fund from many of its peers.
The manager’s investment approach looks to target companies with strong management teams and a sustainable advantage in their industry, which should allow them to pay out enhanced dividends thanks to the superior cash they generate.
The manager seeks to achieve a total return ahead of the FTSE All World Asia Pacific Ex Japan, a benchmark with characteristics akin to the MSCI AC Asia Pacific index, through both capital growth and an income generation in excess of 120% of the index.
Invesco Asian
The Asian and emerging market franchise at Invesco is underpinned by a clear investment approach honed over many years. Named lead manager, and co-head of the team, William Lam, has more than two decades of investment experience, most of which has been spent focusing on Asian equities.
Central to the team’s philosophy is the belief that markets are too focused on short-term news which leads companies to be mispriced. Ultimately, the fund manager is seeking companies trading at significant discounts to the team’s estimated fair value, targeting a double-digit annualised return from each stock.
The fund is managed with a contrarian mindset, with the team seeking to outperform the MSCI AC Asia Pacific Ex Japan.
Stewart Investors Asia Pacific Leaders
Despite a recent change to the fund’s name, the investment approach, which has been in place for many years, remains unchanged. Fund manager David Gait learnt his trade under the tutelage of well-respected veteran fund manager, Angus Tulloch, and has nearly three decades of investment experience.
The team look to identify high quality companies and hold them for the long term. Sustainability is an important component of their quality criteria, with the managers believing companies with higher sustainable credentials will be those that offer better durability of earnings. The team do not pay careful attention to indices, so performance can be variable versus the market.
Vanguard FTSE Developed Asia Pacific ex Japan UCTIS ETF
For investors who want to passively invest in the developed regions of Asia, they can do so via the Vanguard FTSE Developed Asia Pacific ex Japan ETF. This index captures the large and mid-cap segments of the developed markets in the Asia and the Pacific Region, excluding Japan.
Unlike MSCI, FTSE class South Korea as a developed market, meaning investors holding this fund alongside a position in emerging markets need to be mindful of the index on their emerging markets position to avoid an excessive holding in South Korea.
The fund is a physically replicating fund, carries a competitive OCF of 0.15% and has tracked its benchmark well over a long time horizon.
Paul Angell is head of investment research at AJ Bell. The views expressed above should not be taken as investment advice.
Use your ISA allowance before the deadline on Saturday 5 April or lose it.
The deadline for investing your £20,000 ISA allowance is on Saturday 5 April but with Donald Trump poised to unveil his ‘Liberation Day’ tariffs this afternoon, investors may be understandably reluctant to put new money into the stock market this week, given there is so much uncertainty over how markets will react.
Another factor making some investors nervous is the sell-off in US and global equities. Between 19 February and 1 April, the S&P 500 has lost 10.6% in sterling terms and the MSCI All Country World Index (66% of which is in the US) is down 8.4%.
Performance of US and global equities year-to-date
Source: FE Analytics
That being said, the ISA allowance refreshes every tax year so investors who can afford to commit the full £20,000 need to do so this week or they will lose this year’s allowance.
Investors can split the allowance between a cash ISA and a stocks and shares ISA however they see fit.
Given the current stock market turbulence, keeping money in cash may seem appealing. Cash ISAs are delivering fairly attractive returns currently, with several providers offering rates of 4.4% or higher, according to MoneySuperMarket.
Over the long-term however, investing in equities or in a multi-asset portfolio has the potential to significantly outperform cash, according to Vanguard’s data.
Investing £20,000 in a stocks and shares ISA today with a long-term expected return of 6% would result in a pot of around £64,000 in 20 years’ time. By contrast, a 2.5% expected annual rate of return from cash over 20 years would turn £20,000 into £33,000 – almost half the amount of the stocks and shares ISA.
James Norton, head of retirement and investments at Vanguard Europe, said: “The difference of £31,000 is a year and a half’s worth of ISA contributions for someone maximising their allowance each year, demonstrating the reward for taking some investment risk, even amid uncertainty about short-term market conditions.”
Yet for people who want the chance to outperform cash but are reluctant to invest, there is another option that may serve as a halfway house.
“If you’re feeling particularly concerned about investing in the current market environment, there are still ways to make the most of your ISA allowance without taking on too much risk,” Norton said.
“One option is to temporarily park any remaining ISA allowance in a money market fund, which is a low-risk investment that gives you a place to hold rather than grow your savings, while aiming to give investors a slightly higher return than cash.
“Once you feel more confident, you could then consider moving your money into more growth-oriented investments that help you progress towards long-term goals.”
Money market funds come in different flavours. Those in the IA Short Term Money Market sector are lower risk and deliver returns similar to the Bank of England base rate, whereas those in the IA Standard Money Market sector have more flexibility and aim to achieve slightly higher yields, as Trustnet’s guide to money market funds explains.
For investors seeking a fund led by an experienced manager with a proven track record, three money market funds are run by FE fundinfo Alpha Managers: Craig Inches’ £7.5bn Royal London Short Term Money Market fund; Steve Matthews’ £1.1bn WS Canlife Sterling Liquidity fund; and Lloyd Harris’ £326m Premier Miton UK Money Market fund.
Darius McDermott, managing director of Chelsea Financial Services, sympathises with savers who are reluctant to invest in the current climate but, like Norton, he does not recommend sitting on the sidelines.
“Donald Trump’s Liberation Day has markets on a knife-edge. Investors today must contend with what we like to call ‘TILT’, or Trump-induced liquidity turbulence – a world in which one tweet, one tariff, or one interest rate surprise can send markets reeling,” McDermott said.
“With inflation still lurking in the background and interest rates and geopolitical uncertainty keeping everyone on their toes, we think investors need to engage with their portfolios a little more to make sure they are not caught out.”
McDermott suggested a barbell approach focusing on long-term, thematic investing, combined with safe haven assets such as bonds, as a way to capture the upside without suffering too much of the downside.
“Thematic investing essentially means aligning capital with long-term structural shifts and ignoring the short-term macro noise – it also means going against the grain until the herd (eventually) catches up. From British small-caps and global infrastructure to sustainability and hard assets, we think it is time to get ahead of the trends shaping tomorrow’s markets,” he said.
“This isn’t the time to sit on the sidelines. Thematic investing isn’t about chasing fads or timing the market – it’s about positioning capital in the right sectors before everyone else catches on. In a world where Trump-induced liquidity turbulence can turn markets upside down overnight, the winners will be those who look past the noise and focus on the bigger picture. And don’t forget to add protection.”
Trustnet finds out which funds had the best and worst starts to the new year.
Funds investing in gold miners, financials stocks and European equities jumped to the top of the performance tables in the first quarter of 2025, FE fundinfo data shows, while those focused on the US and tech struggled.
The opening three months of the year were dominated by negative headlines around a potential trade war started by new US president Donald Trump and the risk of an economic slowdown.
US stocks – especially those in the tech space such as the so-called Magnificent Seven (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla) – sold off but there were some areas where strong returns were made, as suggested by the chart of fund sector performance over the first quarter.
Performance of Investment Association sectors in Q1 2025
Source: FinXL
Latin American equities, particularly Brazilian stocks, rallied over the past three months, after investors looked for value opportunities when the expensive US market sold off. The average IA Latin America fund gained 8.5% over the period; this came after a drop of just over 25% in 2024.
These were followed by European equity funds, which also underperformed last year, and Chinese funds, which made 13% in 2024 but suffered double-digit losses in each of the prior three years.
At the bottom of the performance table for the first quarter are IA North American Smaller Companies, IA Technology & Technology Innovation, IA India/Indian Subcontinent and IA North America funds.
Dan Coatsworth, investment analyst at AJ Bell, said: “Investing in European defence, construction and banking firms and Chinese tech stocks were the winning trades in the first three months of the year. In contrast, US tech was a losing trade, ending a strong run for what’s been an easy place to get rich over the past few years.
“There is a simple explanation as to why the US is still nursing an almighty hangover from 2024’s party. Euphoria around Donald Trump returning to the White House has quickly turned into fear over how his policies could dent the US economy. His persistent, aggressive stance on tariffs threatens to drive up inflation and cause businesses and consumers to curtail spending.
“When any prevailing narrative changes, investors tend to look at their portfolios to see what’s done well in the past and will lock in some profits. US shares were trading at lofty valuations and investors are no longer prepared to pay high multiples, so we’ve seen a double hit of selling and a derating in equities. This has left the US as the worst performing part of the global equity market this year and driven a rotation into other locations which are cheaper and where the outlook is starting to improve.”
Source: FinXL
As the table above shows, gold funds dominate the list of the best-individual funds in the opening quarter, with 10 of the 12 highest returning strategies investing in gold equities. Ninety One Global Gold tops the quarter’s results with a total return of 31.3%, followed by iShares Gold Producers UCITS ETF, HAN AuAg ESG Gold Mining UCITS ETF and Jupiter Gold And Silver.
The yellow metal itself rallied 19% over the period, breaking through the symbolic $3,000 mark as investors sought out safe havens amid the uncertainty being created by looming tariffs from the US and concerns over the health of the global economy.
Fawad Razaqzada, market analyst at City Index, said: “This lingering uncertainty has kept the metal well supported, with prices charging into uncharted territory with barely a pause for breath.
“Once the dust settles, we could see gold take a breather – especially if Trump adopts a softer stance on [tariffs]. Much of the tariff-related fear is arguably priced in by now, but whether that translates into calmer markets remains to be seen.”
The strength of European banks is reflected in the presence of Amundi Euro Stoxx Banks, SPDR MSCI Europe Financials UCITS ETF and iShares MSCI Poland UCITS ETF (which has more than 50% in financials) among the quarter’s best funds.
Meanwhile, HAN Future of Defence UCITS ETF has benefited from promises by European countries to increase their military spending in light of uncertainty around the US’ commitment to Nato and the continent's defence.
Investors are becoming increasingly positive on European equities. Jacob Hvidberg Falkencrone, global head of investment strategy at Saxo, said: “Europe is undergoing a major shift toward independence and self-reliance, driven by weakening US security commitments, deglobalisation and a push for economic resilience.
“This has triggered unprecedented investment in defence, infrastructure, technology and renewable energy, supported by initiatives like Germany’s fiscal stimulus plan and the EU’s defence loan – specifically favouring European over US suppliers.”
Source: FinXL
The worst-performing funds of the quarter reflected the volatility in US, tech, growth and small-cap stocks.
WisdomTree Blockchain UCITS ETF was down 25.8% following a sell-off in cryptocurrencies, while ETFs focused on uranium miners dropped more than 20% because uranium prices tanked after US nuclear-power companies slowed purchases and delayed new contracts on tariff uncertainty.
The most notable move, however, was the fall in IA North America and IA North American Smaller Companies funds. Of the 289 funds in the sectors, 268 – or 93% – made a loss in the first quarter.
Nigel Green, chief executive of deVere Group, pointed out that US stocks have just closed their worst quarter since 2022 and cautioned investors to assess their assumption that exposure to the US tech-heavy market can power portfolios regardless.
“This is a moment to rethink assumptions,” he said. “We could still see sharp rallies in response to specific events, but the underlying trend has changed. The market is digesting a new political reality – and that digestion is going to be messy.”
Tennant will work with former Fidelity colleague Russell Champion to build a new global small-cap capability.
Richard Tennant, a former equity analyst and portfolio manager at Capital Group and Fidelity International, has joined multi-boutique asset manager Goodhart Partners. He will work with portfolio managers Russell Champion and Andrew Heap, who joined earlier this year, to launch a global small-cap fund.
Tennant, who has more than 18 years of experience in European small and mid-caps, said: “As I look at markets now, I see enormously attractive opportunities in stocks that I believe have the potential to generate extraordinary long-term returns. I am excited to apply my process and philosophy to a broader investment universe.”
Gary Tuffield, partner at Goodhart, added that Tennant’s appointment reflects “a rapidly dawning recognition that the environment the world has entered will necessitate a more agile investment approach, focussing on identifying opportunities and risks whenever they may occur, and being willing and able to implement change when warranted”.
Tennant brings Goodhart’s global equity team to 10, following the appointments of Heap and Champion earlier this year.
Champion previously co-managed Premier Miton’s European Opportunities fund. Heap joined from Pie Funds, where he was responsible for conducting research on global equities with a focus on US small-caps. They previously worked together at Pensato Capital and Redwheel.
Trustnet investigates whether investors should move out of specialist tech funds or pile back in to take advantage of lower valuations.
The Magnificent Seven as a group have lost more than 20% since Christmas eve, meaning they have technically entered bear market territory, judging by UBS’s market-cap weighted Mag7 index.
Other measures paint a similar, although slightly less dire, picture. The equally-weighted Indxx Magnificent Seven index is down 15.7% since Christmas eve in dollar terms, as the chart below shows, although in sterling terms it has lost 18.2%.
As Jason Hollands, managing director of Bestinvest, pointed out: “While that is painful for anyone who invested at the start of the year, to put this in context, the index is back at where it was last September.”
Performance of Indxx Magnificent Seven, year to date
Sources: Bestinvest, Lipper
The Bloomberg Magnificent 7 Total Return index, another equal-weighted benchmark, is down 16% year to date in dollars. “It is not far off bear market territory but not quite there yet,” Hollands said.
The underperformance of the Magnificent Seven this year is notable against wider equity markets but also versus the technology sector, said Matt Ward, portfolio manager, technology at AXA Investment Managers.
This marks “a real reversal of what we’d seen throughout 2023 and 2024; on an equal-dollar weighted basis, the Magnificent Seven are still up 40% versus the MSCI ACWI Tech Index over the past 24 months”, he observed. “Behind these headline numbers though we see real nuance within the group with a wide dispersion of stock performances, valuations and the fundamental drivers that vary significantly between them.”
Looking at a slightly longer list of US mega-caps, the 10 largest stocks in the S&P 500 have been playing ‘catch down’ with the rest of the market, closing the valuation gap significantly in recent months.
Below, Trustnet asked experts how investors should react to the sharp sell-off in mega-cap tech stocks this year. Should they move out of specialist tech funds in case the rout worsens or is now the time to pile back in?
This could be a buying opportunity, especially if prices ease further
Darius McDermott, managing director of Chelsea Financial Services, sees the sell-off as a potential buying opportunity. “Artificial intelligence is not a passing trend and the Magnificent Seven have invested billions into research and development in this area. They remain well placed to lead the next wave of innovation,” he explained.
“While valuations were stretched, the long-term growth story remains intact. These are high-quality businesses with strong margins and robust cashflows. If prices ease further, that could present an attractive entry point for funds specialising in the technology trends.”
That said, what investors should do from here depends on what they already have in their portfolios. “It’s crucial to understand how much exposure you already have to the Magnificent Seven, especially through global or US equity funds. These stocks recently made up around 37% of the S&P 500, so many investors may already be overweight without realising it. While the US remains a hub of innovation, recent market volatility has underscored the importance of diversification,” McDermott cautioned.
For investors who want exposure to tech stocks overseen by a specialist, McDermott suggested Sanlam Global Artificial Intelligence and Allianz Technology Trust.
“Sanlam Global Artificial Intelligence takes a differentiated approach, ‘eating its own cooking’ by using a proprietary AI system to help identify companies poised to benefit from the AI theme. Importantly, the manager does not just look at firms creating AI, but also those using it to enhance their business models – offering investors a more diversified route into this rapidly evolving trend,” McDermott noted.
“Allianz Technology Trust is managed by the experienced Mike Seidenberg, supported by a specialist team based in Silicon Valley. This gives them unrivalled access to companies at the heart of global tech innovation.”
Hold your horses and stay the course
Rob Morgan, chief investment analyst at Charles Stanley, said investors should cleave to well-established investment principles such as diversifying appropriately and committing for the longer term.
“The extent of uncertainty and complexity around tariffs and the consequences for individual companies means, in the short term, we can expect a high level of market volatility. However, the era of US exceptionalism may persist once we get past the short-term difficulties,” he said.
Despite near-term risks, the tech sector is still home to structural winners. “In the main, the big tech giants are fantastic businesses – it can be argued some of the most successful in history – so there is always going to be a place for such businesses in portfolios if they are priced appropriately,” Morgan observed.
“This year's sell-off has blown the froth off valuations and, in time, could lay the foundations for decent returns. As a result, this is an opportunity to rebalance back towards this area if your portfolio has been lacking in it or sticking the course as long as you are not over-exposed.”
Alison Porter, co-manager of Janus Henderson Investors’ Global Technology Leaders and Sustainable Future Technologies strategies, also expects short-term volatility but said the long-term investment case remains intact.
“We believe we are still in the early stages of an artificial intelligence (AI) compute wave that requires investment across the technology stack, as physical infrastructure needs to be upgraded before we see truly transformational applications emerge,” she said.
“While the coming months will be volatile, long-term we remain positive on the companies with hyperscale (public cloud) platforms which can help to propel and facilitate the development of new applications disrupting new sectors, such as healthcare and transportation.”
Time to diversify away from mega-cap tech
The market correction, although severe, has not brought mega-cap tech valuations down to attractive levels yet, Hollands said. “Lower share prices have taken some of the froth out of what were very extreme valuations but it would still be stretching to claim they are now a screaming bargain.”
Many investors already own the Magnificent Seven through passive funds tracking US and global equity indices, which have become heavily exposed to the tech giants. Therefore, “the bigger issue for many people will be to diversify beyond them”.
That said, Hollands does not advocate knee-jerk selling on short-term market movements. Besides, it remains to be seen whether the Magnificent Seven will remain in a trading range, recover or experience another leg downward, he said.
“Tech is going to remain an important sector and so if you invested in it on a long-term view, then you should probably not get distracted by short-term volatility.”
That said, investors who want to diversify could switch some US equity exposure to equally weighted index funds such as Xtrackers S&P 500 Equal Weight UCITS ETF.
“Other options include factor funds, such as the Invesco FTSE RAFI US 1000 UCITS ETF, which owns the 1,000 largest companies but weights them based on average sales, cashflow and dividends over the past five years, as well as book value, which provides the portfolio with an implicit value tilt and mutes Magnificent Seven exposure without eliminating it entirely,” he explained.
The Trojan Ethical fund has invested in three high-quality businesses whose valuations have come down a long way.
Most stocks globally are still expensive in spite of recent market volatility but a few companies have de-rated considerably over the past year, providing fund managers and investors with a buying opportunity.
This is the view of Charlotte Yonge, who was recently promoted to co-manager of Troy Asset Management’s multi-asset funds, including the Trojan fund and the Personal Assets Trust.
She was already lead manager of the £861m Trojan Ethical fund, which recently invested in L’Oréal, Adobe and VeriSign on the back of share price weakness.
“We are seeing select companies, which used to be really expensive, but the market has decided they are either going to be disrupted by artificial intelligence (AI) or weight loss drugs, or perhaps they're exposed to manufacturing, which has been incredibly weak for three years,” Yonge explained.
She remains cautious overall and the Trojan Ethical fund only has 30% of its portfolio in equities but she is taking advantage of “individual rifle shot chances” to add attractively valued stocks. “We're making very small but quite targeted bets on individual companies that are interesting,” she said.
L’Oreal
Troy first invested in L’Oréal in November 2024 at a share price of €325 and a valuation of 25x earnings, which is roughly in line with its long-term average but represents a significant de-rating since 2021, when it was trading at 45x.
Share price performance of L’Oréal over 5yrs
Source: Google Finance, data to 31 Mar 2025
The share price suffered a “fall from the stratosphere” because of L’Oréal’s exposure to China, where consumers have struggled since the Covid pandemic and the country’s economic slowdown has been exacerbated by a property slump, she explained.
Nonetheless, it remains an outstanding company. “What I like about L'Oreal is the consistency of its operating performance. It is exceptionally well run,” she said.
“It is the global leader in beauty but unlike lots of global leaders, which are large and slightly encumbered by their own size, L'Oréal has consistently gained market share because it is incredibly dynamic. It's innovative,” she continued. The culture is “fast moving and really embraces the new”.
L'Oréal remains ahead of competitors by spending more money on marketing (as a proportion of its sales) than any other consumer staples company. “The digital marketing is phenomenal in terms of being innovative,” she noted. For instance, consumers can go into a store such as Selfridges and try on a lipstick digitally rather than having to physically apply make-up testers.
Also, the beauty company has proven adept at acquiring small businesses with pioneering products. “Not only can L'Oreal give them exposure to its global distribution capabilities but the small companies can feed back into L'Oreal and bring that dynamism and entrepreneurial edge, which I think is a real key to why L'Oreal has made those market share gains so consistently. It has never grown complacent,” she explained.
Adobe
Troy recently purchased a small position in Adobe at around 18x earnings. Like L’Oréal, Adobe’s operating and financial performance have been consistent and it possesses a strong brand, but its share price has plummeted since 2021 when it traded on nearly 50x earnings.
Share price performance of Adobe over 5yrs
Source: Google Finance, data to 31 Mar 2025
Tech companies were trading at “unrealistic, very heady multiples” during the pandemic-driven move online, Yonge recalled. “The market got over excited and overly desperate in both directions.”
Adobe has an 80% market share in graphic design software and has invested heavily in functionality, research and development. As a result, its software is superior to competitors and graphic designers want to use it, she said.
The share price has come under pressure due to concerns that AI will displace the need to edit images but Yonge believes graphic designers will still want to use Adobe to edit their content.
“AI is creating more content but it still needs to be edited, so we think in the long run this is a tailwind for a company like Adobe, which is so entrenched and so strong in terms of its usership and the loyalty towards its products,” she said.
“As stock pickers, you look for those points of dissonance where the narrative becomes quite powerful, overwhelming the facts. And for us, the facts are still very compelling. Adobe is continuing to grow in the low teens.
“In a world where there's a lot of turbulence, a company delivering really solid operating performance but on a cheap valuation is quite interesting to us.”
Verisign
Troy initiated a position in Verisign late last spring, then added to it in the autumn at 20-21x earnings – a valuation which Yonge said provides a margin of safety. During the 2021 tech craze, VeriSign got up to 45x earnings.
Share price performance of Verisign over 5yrs
Source: Google Finance, data to 31 Mar 2025
“It's really important for us that we don't lose money and one way to try and avoid that is to make sure you're not overpaying for good businesses,” she explained.
Verisign is the domain name registry business for dot com and dot net. The business is highly regulated so has high barriers to entry. It also benefits from strong pricing power because its clients are content to pay a slightly higher fee each year to keep their domain name. It has 67% operating margins and buys back shares with excess cash, which over the long run has translated into attractive shareholder returns, she said.
Verisign’s operations suffered in the aftermath of Covid when its Chinese exposure became a headwind, but that is stabilising now and China has become a smaller part of the business. Going forward, Yonge expects Verisign to grow at a mid-to-high single-digit rate each year.
The revenues and profits generated stand to be a game-changer for an already enormous company.
Of all the opportunities emerging from the AI movement, the rise of robotaxis is one of the most exciting. Autonomous vehicles are becoming more sophisticated, safer, and less expensive to operate with every passing day. Within a few years, we expect the global addressable ride-hail market to be valued at $10trn.
Naturally, the upside for whoever ends up on top (and its investors) is huge. Alphabet’s Waymo may have the edge for now but we believe Tesla will ultimately drive the robotaxi revolution towards its full potential.
Safety and price – the two key battlegrounds
Simply put, the winner of the robotaxis ‘war’ will be the provider making the most trips. This requires getting customers to opt for an autonomous taxi ride over the human-controlled alternatives they’re used to. And for this to happen at scale, we see two important battlegrounds on which Tesla and Waymo will need to fight it out.
The first is safety. People are more likely to take a robotaxi ride if they know it’s as safe, or indeed safer than driving themselves or hailing a human-driven cab.
Right now, Waymo is leading here. Its commercial robotaxi service – presently operating in San Francisco, Phoenix, and LA – is clocking around 400,000 miles between police-reported collisions.
Tesla – which is slated to launch its robotaxi service before year-end – is reporting around 10,000 miles between incidents. So rapid is the pace of development of its Autopilot technology, however, the company expects this figure to exceed 700,000 by October.
At this point, its frequency of incidents will not only be lower than Waymo’s, but also the national accident rate for all vehicles in the US, human-controlled or otherwise.
The second key barrier to widespread robotaxi adoption is price. People will always tend towards the lowest cost of transport available to them.
As ride hail’s cost-per-mile decreases through each price point, another massive addressable market opens. By the time it’s reached $0.25 per mile, the total addressable market globally is valued around $10trn.
Who will win the race to the bottom? Our money’s on Tesla.
For a start, Waymo’s robotaxi service will be more expensive to run than Tesla’s. The company depends on high-cost auto manufacturers such as Hyundai to build the cars deploying its technology. Its self-driving platform is underpinned by expensive LiDAR technology.
Tesla, on the other hand, is vertically integrated – it makes its cars itself. Rather than LiDAR, its self-driving platform is now powered by cameras and machine learning.
The net result is a lower cost to get each of Tesla’s robotaxis onto the streets. As the below shows, the company will get many more Cybercabs for $5bn in capex than Waymo will get Hyundai Ioniqs.
Likewise, the depreciation costs of its vehicles will be much lower once they are in service. In fact, we expect the operating cost per mile of the Cybercab to be around 30-40% lower than the Waymo 6th Gen once at scale.
Why is this important? At scale, Tesla’s lower manufacturing and maintenance costs will enable more competitive pricing per mile for customers.
As its technology continues to advance, and this price continues to move down, we expect the company to win the most rides in the biggest addressable market.
Hail the king of ride-hail
For most of us, robotaxis seem like an idea from a sci-fi film right now. Make no mistake, though, they’re coming.
These autonomous vehicles are already hitting streets worldwide. As they become safer, cheaper, and more ubiquitous, they have the power to revolutionise the way we travel in a very short period of time.
Many companies will enter the evolving market. For our part, we expect Tesla’s sheer scale to afford the necessary cost and safety edges required to lead the sector towards maturity.
The revenues and profits generated stand to be a game-changer for an already enormous company.
Brett Winton is chief futurist at ARK Invest. The views expressed above should not be taken as investment advice.
India funds beat technology last month.
Technology continued its bear phase in March, taking last month’s negative returns to new lows, while India turned around.
The IA Technology & Technology Innovation sector lost 9.8% in March, a few points below its February result of -6.2%. “What goes up comes crashing back down again” was the view of Ben Yearsley, director at Fairview Investing.
He said: “Blood bath is too strong a phrase; however it hasn’t been pretty. The Magnificent Seven pushed the market higher and has brought it back down again. The bottom of the tables focused on US and tech funds – there was no real respite. There wasn’t even the saving grace of a weak pound for UK investors as the pound gained versus the dollar in March.”
Funds and exchange-traded funds linked to the tech theme were among the worst performers of the month, including WisdomTree Blockchain UCITS ETF (bottom of the IA Global sector and the second-worst performing fund across all Investment Association universes, at -17.1%), HAN ETC Group Web 3.0 UCITS ETF (-16.9%) and Liontrust Global Technology (-13.3%).
Poor performance spread out to the broader US market as well, with the IA North American Smaller Companies and IA North America sectors falling almost as much as their technology plays (9.1% and 8%, respectively).
Source: FE Analytics
Tariffs have been one of the key stories here, according to Yearsley.
“Globalisation is in retreat though with long-term impacts and consequences in many areas. The Russian invasion of Ukraine is now more than three years old and the cost to the US taxpayer is clearly a bug bear,” he said.
“Donald Trump dominates the narrative and is likely to continue to do so until the end of his presidency. It doesn’t matter whether it’s Ukraine or tariffs, it has knock-on impacts in the investing world and the real world with budget deficits and how to fund them.”
The rest of the table is dotted with American strategies, including Lazard US Equity Concentrated (-14.9%) and Lord Abbett Innovation Growth (-13.4%). Consumer-focused strategies, such as Invesco Global Consumer Trends (-14%) and Pictet Premium Brands (-12.9%), also made an appearance. A number of Taiwanese ETFs also made the list.
The Invesco fund’s largest holdings are Amazon, Facebook, Tesla and Nvidia so it “looks exactly like a tech fund”, Yearsley said.
On the positive side, India made a complete 180, having been the worst sector in February and having somewhat slipped under the radar after a poor few months. It now soared to the top with a 5.5% return.
Source: FE Analytics
“India has suffered due to high valuations, concerns over long-term growth prospects and whether companies really have large addressable markets. Some estimates suggest India has a middle class with disposable income of only 50 million people compared to 300 million in China. Are super high valuations justified?” Yearsley asked.
In the IA India/Indian Subcontinent sector, Jupiter India was the top performer, gaining 10.3%, followed by M&G India (7.1%).
India wasn’t the absolute winner, however. Gold was the dominant theme amongst the best-performing funds as it crashed through $3000 an ounce, propelling gold miners higher, as Yearsley noted.
Eight of the top 10 were gold and precious metals funds with Baker Steel Gold & Precious Metals topping the actively managed list with a rise of 15.3%.
The only non-gold funds in the top 10 were Jupiter India and India Select, both gaining just over 10%. Many more India funds were just outside the top 10.
Source: FE Analytics
Despite recent fears, Rathbones’ Will McIntosh-Whyte explains why he remains a “big fan” of US businesses.
There has been a sea change in recent months as multi-asset managers and global stockpickers have begun to consider options outside of the US. But Will McIntosh-Whyte, multi-asset manager at Rathbones, is doing the opposite.
Last year, investors would have done well by betting on the US. In 2024, the S&P 500 was up by around 26.7%, the best performance of all major equity markets. This year, its fortunes have turned, with the S&P 500 down 8% so far in 2025, while former underperformers such as Europe have turned around, surging 10.8%.
The origins of this pivot away from the US are varied, but McIntosh-Whyte said perhaps the biggest driver is that “investors cannot get away from tariffs”. As president Donald Trump continues to levy tariffs, delay them or bring them in with exceptions, investors have become increasingly uncertain about the future.
“We’ve got Liberation Day to worry about, but the honest answer is that no one quite knows what will come out on 2 April”, McIntosh-Whyte added.
Performance of equity markets YTD
Source: FE Analytics
However, while many investors have been pulling back from the US, McIntosh-Whyte and his team have done the opposite, increasing their exposure to US businesses while reducing their allocations towards Europe.
He said: “The fact people are talking about the end of American exceptionalism tells me it is not a bad time to pick up a few new investments in the US.”
Despite the recent pullback, McIntosh-Whyte said America was still an “exceptional economy, with many of the best businesses in the world that you cannot find anywhere else”.
American businesses have consistently proven they can defy earnings expectations, deliver high margins, and have returns on capital which many of their competitors fail to match, he said.
“None of these things have changed”, he added.
While he conceded valuations had got “a bit frothy” recently, particularly as the hype around artificial intelligence (AI) has grown and continued strong performance had caused a surge of enthusiasm, comparisons towards the tech bubble were inappropriate.
He said recent market developments, such as uncertainties around tariffs and the emergence of competitors such as DeepSeek, led to investors taking a pause and “reassessing some of their optimistic expectations”, which was “quite healthy for the market”.
Salesforce is a good example of this. McIntosh-Whyte explained its valuation had surged as people became excited by Trump’s pro-business agenda, rising to unsustainable levels. Now, it is on a “far more sensible” multiple of around 25x.
He said: “I am not going to sit here and scream that it is a dirt-cheap business, but it is at a much more attractive point than before.”
Even Alphabet and Microsoft, which he conceded had become overvalued due to the AI hype, now looked more appealing, he said.
“Alphabet is trading at around 17x and we think when it trades around the high teens it is usually an attractive time to pick it up”. While Microsoft had not experienced the same pullback, now only just below 30x earnings, McIntosh-Whyte felt this was reasonable given the strength of the business.
He explained, despite the launch of competitors, Microsoft has continued to take market share and successfully sold products such as Copilot and Teams, despite “not being the strongest offering out there” because of its market position.
“We have always been big fans of the US. I cannot predict what next year will look like, but I can tell you some of the best businesses in the world are now looking attractively valued. If you are a long-term investor, I think this is an opportunity to start putting money to work”, he said.
By contrast, while investors have become more bullish on Europe, McIntosh-Whyte remained hesitant. Despite the resurgence of European stock markets this year, he warned investors may be overreacting.
“I am very cautious about people rushing into these businesses that were not given the time of day this time last year,” he explained.
Europe is on a much stronger footing, boosted by recent events in Germany, as well as European countries committing significant budgets to defence, which will aid businesses such as Rheinmetall.
However, while investment is still left to come, “there is also probably some capacity issues”, he warned. For starters, Germany cannot introduce these reforms overnight. It will take time and patience for many of these reforms to come to fruition, meaning investors may not see immediate success.
“There are a handful of stocks have been revalued significantly and are starting to price in expectations which may not pan out,” he said. As a result, the pivot towards Europe and away from the US is "not as game changing as some of the market reactions may imply”, he concluded.
Trustnet finds out which IA Mixed Investment 40-85% Shares funds-of-funds have made the highest long-term returns.
Funds run by Vanguard, Barclays and Liontrust are among the multi-manager strategies with the strongest long-term track record in the IA Mixed Investment 40-85% Shares sector, FE fundinfo data shows.
Multi-manager funds often serve as a one-stop-shop for investors, allowing them to access the holdings and expertise of the underlying strategies without the need to research each one individually.
However, they have fallen in popularity over the past decade – although the launch of Vanguard’s LifeStrategy funds and other ranges built on passive strategies from BlackRock, HSBC, Aberdeen and others helped revitalise the space.
That said, some have delivered strong returns. Therefore, Trustnet researched which multi-managers in the popular IA Mixed Investment 40-85% Shares peer group – formerly known as the ‘balanced’ sector – have made the highest returns over the past 10 years.
The best performance has come from a member of the Vanguard LifeStrategy range; Vanguard LifeStrategy 80% Equity is up 110.6% over the period under consideration.
Performance of Vanguard LifeStrategy 80% Equity vs sector over 10yrs
Source: FE Analytics. Total return in sterling.
This makes it the only multi-manager fund in the sector to post a total return of more than 100% over the past decade. It’s also the fourth best fund of the entire sector, beaten only by Royal London Sustainable World Trust (up 158.7%), Orbis Global Balanced (154.2%) and WS Waverton Portfolio (113.4%).
Like all the funds in the Vanguard LifeStrategy range, it is built from underlying Vanguard equity and bond trackers and is rebalanced automatically, providing a simple way to maintain a consistent asset allocation over time.
The £13.1bn fund’s top holdings are Vanguard FTSE UK All Share Index (19.5% of the portfolio), Vanguard US Equity Index (19.3%) and Vanguard FTSE Developed World ex-UK Equity Index (19.2%).
Analysts at Square Mile Investment Research & Consulting give the fund a ‘Recommended’ rating but pointed out that its static asset allocation, passive exposure and use of only two asset classes can create some risks. Among these are high levels of correlation between stocks and bonds in the short term, reducing its diversification benefit, and an inability to adjust the asset allocation or fund selection to account for “extreme” valuations.
“These risks have the potential to impact the fund in the short term, however over the long term the fund should provide similar returns and market exposure to a fund which takes more active decisions,” they added.
“Many may also see the static allocation as a positive as it means that investors are not exposed to a fund manager making strong ‘bets’ on a certain asset class or region nor is the fund exposed to the emotional biases associated with active fund managers.”
The table below reveals the 10-year total returns and quartile ranking of all 58 multi-manager funds in the IA Mixed Investment 40-85% Shares sector.
Source: FE Analytics. Total return in sterling.
Barclays Global Markets Growth comes in second place with a 96% total return. Aiming to generate both capital growth and income over the long term, it holds at least 70% of its assets in passive funds.
Currently, the top holdings are iShares North America Index (16.2% of the portfolio), iShares S&P 500 Swap ETF (14.8%) and iShares Core MSCI Emerging Markets IMI ETF (13.3%).
Manager Finlay Macdonald is running an overweight to emerging market equities, is neutral developed market equities and bonds (government, investment-grade, high-yield and emerging market debt), and underweight cash and short maturity bonds.
In third place is Liontrust MA Explorer 85 with a 10-year return of 92.7%. Managed by John Husselbee and James Klempster, the fund – like the others in the same range – aims to outperform over the long run by limiting losses in falling markets.
The core strategic asset allocation is outsourced to third-party consultancy Hymans Robertson, with Husselbee and Klempster able to tweak positioning as part of their tactical asset allocation. The managers aim to increase exposure to assets that look cheap and their focus is on valuations rather than market timing.
Top holdings include Brown Advisory Beutel Goodman US Value (8.6%), Evenlode Income (6%) and HSBC American Index (5.8%).
Jupiter Merlin Balanced Portfolio is in fourth place after making 87.5%. This fund, like the others in the Jupiter Merlin range, leans very much on the active side of fund management.
Manager John Chatfeild-Roberts and his team believe in investing in “the right people at the right time”. Their approach also avoids a formal method for asset allocation, instead giving them freedom to invest wherever opportunities seem best.
At present, the fund’s holdings include Jupiter Global Value, Morant Wright Nippon Yield and Evenlode Income.
Rounding out the top five balanced multi-manager funds of the past decade with a total return of 76.9% is Vanguard LifeStrategy 60% Equity. Its approach is the same as Vanguard LifeStrategy 80% Equity, aside from having a 60% allocation to stocks.
These five funds are the only multi-manager strategies to make first-quartile total returns in the IA Mixed Investment 40-85% Shares sector over the past decade.
Overall, more multi-manager funds are in the peer group’s bottom quartile than the top – 16 have made a fourth-quartile 10-year return.
The worst performer in VT EPIC Multi Asset Growth, which is down 3.8% and the only fund in the sector to make a loss over the period under consideration.
Joining it at the bottom of the sector are the likes of EF 8AM Balanced, Fidelity Multi Asset Income & Growth, 7IM Moderately Adventurous and SVS Brown Shipley Balanced.
Research by the Association of Investment Companies reveals which trusts balance high yields with consistent income.
There are just a few days left before the end of the tax year, leaving investors with very little time to make the most of their £20,000 ISA allowance.
For investors looking for last-minute trust additions to their portfolios, the Association of Investment Companies (AIC) has highlighted 26 investment trusts that consistently pay the highest yields.
To make the list, trusts needed a yield of at least 5%, a 10-year history with no year-on-year dividend cuts and a positive total return over the past decade.
Source: The Association of Investment Companies, data accurate as of 25 Mar 2025
Nick Britton, research director at the AIC, said: “These trusts show that high yields and consistent income can go together. While dividends are never guaranteed, this list could make a useful starting point for investors interested in a yield that’s higher than average – much higher in some cases – but still want to see a good track record of dividend payments.”
Britton added that the list is extremely broad in scope, “spanning asset classes from UK and global equities to infrastructure, debt, renewable energy, property and even private equity” and so might be helpful for investors looking for diversification.
The highest-yielding trust to match the AIC’s criteria was the NextEnergy Solar Fund, which had a dividend yield of 12.5%. It is up by 30.6% over the past 10 years.
Performance of trust vs sector and benchmark over 10yrs
Source: FE Analytics
Meanwhile, the trust with the fastest five-year dividend growth was CT Private Equity, which grew its dividend by 14.3%. Over the past decade, the trust surged by 225.3%, a second-quartile result in the IT Private Equity sector.
Earlier this month, the AIC identified this trust as one of its ’next generation dividend heroes’ for growing its dividends for more than 10 consecutive years but fewer than 20.
Performance of the trust vs the sector and benchmark over 10yrs
Source: FE Analytics
The only trust to match the AIC's criteria from the IT Global sector was the Lindsell Train Investment Trust, led by veteran manager Nick Train. It currently has a dividend yield of 6.3% and a five-year dividend growth of 13.1%.
Performance of trust vs sector and benchmark over 10yrs
Source: FE Analytics
Over the past 10 years, it has delivered a 161.7% return. Despite bottom-quartile results over the past five and three years, it has rallied recently, with the second-best performance in the peer group over the past 12 months.
Elsewhere, there are five trusts in the UK Equity Income sector which qualified. The largest and most well-known is the £787m Allianz Merchants Trust, led by Simon Gergel.
Over the past 10 years, it has risen by 75.6% and it ranked within the top quartile of the sector over the past 12 months.
Recommended by RSMR analysts, Gergel was praised for his contrarian, value-orientated and income-biased approach. The trust is one of the AIC’s dividend heroes, having successfully grown its dividend for the past 42 years.
Performance of trusts over past 10 years
Source: FE Analytics
Another dividend hero to make the cut was the abrdn Equity Income Trust, which has successfully grown its dividend for 24 years. It currently has a yield of 7% but its 10-year return of 37.8% was the worst in the sector.
Nevertheless, both it and Merchants Trust remained popular with experts, demonstrated by analysts at Stifel earlier this month, who identified both as compelling UK equity income trusts.
Another strategy from Columbia Threadneedle Investments, the CT UK High Income Trust, also qualified. It delivered a return of 68.5% over the past decade, with top-quartile returns over the past one and three years.
It has a long track record of successfully growing the dividend, with more than 20 years of continuous dividend growth, making it another AIC dividend hero.
Shires Income and Chelverton UK Dividend Trust were the two smallest trusts in the sector to qualify, with just £103m and £60.5m in assets under management (AUM), respectively.
Finally, one IT UK Smaller Companies trust qualified, the Athelney Trust, which holds just £3.3m in AUM. Despite its small size, it was another of the AIC’s dividend heroes, having successfully grown its dividend for the past 21 years.
Most funds generate their strongest returns from their top 10 or 20 highest conviction ideas.
If you had conducted a straw poll of investors’ greatest fears going into 2025, I suspect concentration risk would have ranked near the top. The Magnificent Seven accounted for more than half of the 26% return from the S&P 500 last year, pushing concentration to extreme levels across global indices (though early signs of a reversal are emerging).
Given the column inches it’s commanded over the past year, it’s fair to say that the concentration risk of the US tech behemoths will come as little surprise to investors. But should investors be cautious of throwing out the baby with the bathwater in terms of dismissing concentration as a perennial negative?
The answer is quite possibly, given that concentration can be a powerful driver of returns under the right conditions (more of which in a moment). For active funds in particular, a carefully curated, high-conviction portfolio can be a potent source of alpha generation, freed from benchmark constraints.
This ‘deliberate’ concentration allows managers to undertake more in-depth research on a smaller number of companies, often with an element of active management, and focus on the fundamentals. It also avoids the issue of becoming a ‘closet index’ strategy but with higher fees than passive alternatives.
In a recent webinar, Craig Baker from Alliance Witan spoke about a high conviction and active share driving outperformance, while over-diversification can be a drag on returns. He highlighted that most funds generate their strongest returns from their top 10 or 20 highest conviction ideas, with neutral or negative returns from ‘filler’ stocks included for risk management purposes (rather than their return potential).
A high conviction approach clearly needs to be accompanied with the right ingredients to be a recipe for outperformance (rather than failure). Most importantly, it requires a proven and repeatable investment strategy to capture outsized returns through stock-picking. It’s also best suited to an investment horizon of three to five years to ride out short-term market rotations and the fertile hunting ground of a broad investment universe.
However, a high conviction approach can be a challenge for open-ended funds which can’t hold more than 10% in any one company (with a further limit around 5% holdings). The need to meet redemptions can also make it difficult for OEICs to invest in more illiquid markets, as well as taking a longer-term view.
As a result, the investment trust structure may be better suited to concentrated portfolios. One such example is Rockwood Strategic, a UK small-cap specialist managed by Richard Staveley. With a highly concentrated portfolio of around 20 holdings, Rockwood takes a private equity-style approach by working closely with management teams to unlock value for shareholders.
Given the relative illiquidity of the small-cap sector, Richard has an exit plan in mind when investing, with merger and acquisition activity typically serving as the most likely exit route. This high conviction approach has helped Rockwood achieve an impressive five-year share price return of 190%, topping the AIC UK Smaller Companies sector.
Another example is Alliance Witan, which offers investors a one-stop shop global fund with 11 managers asked to submit up to 20 of their best ideas. Alliance Witan manages risk by blending allocations at the top-level, ensuring that stocks are selected for their return potential rather than risk control.
With an active share of more than 70%, the trust has delivered a five-year share price return of almost 110% and sits at the top of the AIC Dividend Hero list, boasting 58 consecutive years of dividend increases.
While emerging markets may not seem an obvious destination for a concentrated strategy, Mobius seems to tick the box in terms of a proven investment strategy. The trust has a 20-30 strong portfolio sourced from emerging and frontier markets, with a particular focus on small and mid-caps.
Like Rockwood, the trust’s concentrated approach allows it to work closely with management teams to unlock operational improvements and drive a re-rating in valuation. The managers look for innovative businesses benefiting from long-term secular trends such as artificial intelligence, renewable energy and Asia’s rising consumer class.
Given the higher risk nature of emerging markets, the trust uses a macro risk overlay to provide downside protection, with extensive on-the-ground research providing an in-depth understanding of the dynamics of the wider economic and regulatory ecosystem. This approach has paid off, with Mobius achieving a five-year share price return of almost 80%.
It’s worth saying that a high conviction approach is dependent on the skill of the managers in uncovering hidden gems, together with the willingness to weather shorter-term volatility. However, managers can generate significant alpha by focusing on a portfolio of best ideas rather than managing risk through excessive diversification. As Warren Buffett aptly put it: “Diversification is protection against ignorance. It makes little sense if you know what you are doing.”
Jo Groves is an investment specialist at Kepler Partners. The views expressed above should not be taken as investment advice. All numbers are as of 17 March 2025 unless stated otherwise.
The firm added several exchange-traded funds (ETFs), with only two active funds newly recommended.
Some 13 funds have been dropped from the Bestinvest Best Funds list, according to the firm’s bi-annual report, with nine new names added.
There was a clear preference for passives, with seven of the names added being exchange-traded funds (ETFs), while 12 of the funds dropped are actively managed.
Among the notable deletions, the firm has given up on WS Lindsell Train UK Equity. Run by FE fundinfo Alpha Manager Nick Train, the fund has been a strong long-term performer but its returns have waned of late.
It sits in the bottom quartile of the IA UK All Companies sector over one and five years and is below average over three years. It has failed to beat the average peer since 2020. So deep is its underperformance, the fund was included in the Bestinvest ‘Spot the Dog’ report for the second consecutive time in February.
Despite this, it remains a top-quartile fund over the past decade thanks to a stellar run between 2017 and 2020, when the fund was always in the first or second quartile of the peer group.
It is not out of favour with everybody, however, with analysts at interactive investor and Barclays both still recommending the fund.
Analysts at Barclays Smart Investor said they liked the “robust process” that has been in place for nearly 20 years. “It gives us confidence about what to expect from this fund going forward,” they said
WS Lindsell Train UK Equity was joined by Liontrust UK Growth as the two UK funds to be dropped by Bestinvest in the latest edition of its Best Funds list, as the table below shows.
Source: Bestinvest
Three global funds were also cut from the list, headlined by Baillie Gifford Global Discovery. The £350m fund is run by Douglas Brodie, Svetlana Viteva and Alpha Manager John MacDougall and aims to beat the S&P Global Small Cap index by at least 2% per annum over rolling five-year periods.
The small-cap portfolio has struggled to keep pace, however, with the wider global sector and has been the worst performer in the peer group over five years. It has sat in the bottom quartile of the sector over one, three, five and 10 years and has lost more than 40% in three years.
Analysts at FE Investments continue to back the fund. They said: “The team’s consistency and focus on the long term is a valuable trait when investing in smaller companies. This is because they can be vulnerable to short periods of speculation and large price swings.
“Although in isolation the fund is high risk, it could be well suited as an addition to an already-diverse global equity allocation that is lacking smaller company exposure.”
Among the newcomers to the Bestinvest Best Funds list, only two active funds made the list. The £1.1bn Aberforth Smaller Companies Trust was added on the back of a strong past half decade. The trust has sat in the top quartile of the 20-strong IT UK Smaller Companies sector over three and five years and was above average over one and 10 years as well.
It was joined by Goldman Sachs Sterling Liquid Reserves as the only active funds added in the latest edition of the report.
Source: Bestinvest
The list is published twice a year but investments are added or removed throughout the year. Jason Hollands, managing director of Bestinvest, said: “Deciding which actively managed funds qualify as ‘best’ is a process that relies on the expertise of our investment specialists. They not only meet the fund managers on a regular basis to understand their philosophy and approach, but also carefully assess the type of market environment that might benefit from a certain manager’s style.
“The risk management process, the size or liquidity constraints of the fund, the longevity of the manager and how scalable a fund is are other considerations.”
The list now includes 133 funds and investment trusts, but Hollands noted investors still need to “take their time to make their investment choices”, adding that the list is to be used for “inspiration”.
Tom Stevenson selects income strategies from M&G Investments and Ninety One, among others.
The end of the financial year and ISA season are just days away, leaving many investors scrambling to make last-minute additions to their portfolios.
While investors might have a range of concerns when choosing funds for their ISAs, research from Fidelity International has found that generating more income is the primary goal for 39% of investors.
To this end, Tom Stevenson, investment director at Fidelity, said: “With the right investments, your ISA can become a powerful source of additional income, helping you meet your financial goals and secure your financial future.”
Below, he identified four income funds and trusts for income-focused investors.
M&G Corporate Bond
Stevenson explained that bonds are a common way for investors to earn income, offering predictable yields at lower levels of volatility than equities.
He suggested the M&G Corporate Bond fund, led by FE fundinfo Alpha Manager Richard Woolnough. Over the past decade, it is up by 20.5%, with second-quartile results over the past five and three years.
Performance of the fund vs sector over 10yrs
Source: FE Analytics
The fund primarily invests in lower-risk companies and holdings, with around 70% of the portfolio allocated to investment-grade bonds. However, Stevenson noted that the portfolio was heavily impacted by “changes in inflation and interest rate expectations”.
Indeed, over the past decade, the fast-changing market environment caused the fund to slide to the third-quartile for volatility.
Nevertheless, it remains popular amongst experts, with analysts at Square Mile highlighting Woolnough’s “skills in macroeconomic analysis and managing risk factors”, along with his stringent investment process.
Fidelity Global Dividend
Dividends are another common way for investors to garner income and although shares usually offer lower initial yields than bonds, they have more potential for both dividend growth and capital gains.
Stevenson identified the Fidelity Global Dividend fund, managed by Daniel Roberts since 2012, as a compelling option for equity income investors. It currently has a dividend yield of 2.54%, which is in the lower half of the peer group.
Over the past three years, the fund delivered a top-quartile return of 35.1%, beating the MSCI ACWI.
Performance of fund vs sector and benchmark over 3yrs
Source: FE Analytics
“The fund has a conservative approach, focussing on stocks with predictable, consistent cash flows and simple, understandable business models,” Stevenson explained.
Roberts also applies a strict valuation discipline, which has led to a portfolio with extremely low turnover and less than half the volatility of the MSCI ACWI, he said. Indeed, over the past decade, it had the fourth lowest volatility in the sector at 11.7%, making it a relatively stable option.
The fund is also popular with the FE Investments team, who explained that Roberts is a high-conviction manager, willing to make large sector and country bets, which have generally paid off.
Analysts said: “Roberts' approach is not necessarily unique, but his willingness to ignore market noise and stick to his strategy has led to success”.
Ninety One Diversified Income
For investors who want to add a multi-asset income fund to their portfolio, Stevenson pointed to the Ninety One Diversified Income fund. It offers investors a broad mixture of bonds, dividend-paying shares, infrastructure and property assets, which makes it an effective “one-stop-shop”.
Managers Jason Borbora-Sheen and John Stopford have proven their skill over the medium term, with a return of 22.1% over five years, the 10th best performance in the peer group.
Performance of fund vs sector over 5yrs
Source: FE Analytics
The fund currently has a dividend yield of 4.25%, the sixth-highest yield in the whole sector, but it aims to keep risk to less than 50% of the FTSE All-Share. The managers have broadly achieved this goal, with an annualised volatility of around 5.6% between 2019 and 2024, making it one of the lowest-risk strategies in the sector, Stevenson said.
“The managers have successfully limited capital losses while providing a steady yet growing income”, he concluded.
International Public Partnerships
Finally, Stevenson urged investors to not forget about “less mainstream options” such as the International Public Partnerships Trust, which focuses on infrastructure-related holdings.
While its 10-year return of 29% was only a third-quartile result, it currently has a dividend yield of 7.6%, better than what investors can currently receive from bonds.
Performance of trust vs sector and benchmarks over 10yrs
Source: FE Analytics
“It owns essential, low-risk assets such as schools and hospitals, transport and renewables that tend to be held in partnership with the government and subject to long-term contractual arrangements,” he explained. As a result, cash flows tend to be highly predictable, making it a reliable income strategy for investors' portfolios.
Both trusts invest across public and private markets, have strong long-term track records and are trading at wide discounts.
RIT Capital Partners and Caledonia Investments have much in common. They are both at the higher risk, higher reward end of the IT Flexible Investment sector. They invest across private and listed assets and use external managers alongside in-house investments. They both benefit from scale; RIT Capital has a market value of £2.7bn and total assets of £4.3bn, while Caledonia has a market value of £2bn and net assets worth £3bn.
And they are both trading on a similar discount (28.1% for RIT Capital and 30.4% for Caledonia as of 28 February 2025), which has been painful for incumbent shareholders but may represent a buying opportunity for new investors.
Anthony Leatham, head of investment companies research at Peel Hunt, said: “We think both trusts are probably 10 percentage points too cheap on a discount basis.”
The trusts also have family office heritage in common. The Cayzer family owns circa 47% of Caledonia’s share capital, whereas RIT Capital was founded by the late Jacob Rothschild, whose daughter Hannah sits on the board, and the family holds a 22.6% stake.
“While this can reduce the effective free float of the trusts and potentially lead to concerns around shareholder concentration, we also see the long-term holding period as supportive of the strategies’ approach to blending private and public investments,” Leatham observed.
Over the very long term, both trusts have pulled well ahead of their sector, as the chart below shows, although performance has been more challenging in recent years for RIT Capital.
Performance of trusts vs sector over 20 years
Source: FE Analytics
Both trusts are engaging in share buybacks and have consistently grown their dividends.
Caledonia has raised its dividend for 57 consecutive years, making it one of the Association of Investment Companies’ Dividend Heroes, and currently has a 1.9% yield.
RIT Capital has a 2% yield and has grown its dividend for 10 consecutive years. The board has increased the 2025 dividend by 10.3% a part of a multi-pronged strategy to stimulate demand for the trust’s shares, according to analysts at Kepler Partners.
Below, Trustnet asked experts for their views on both trusts and whether they have a preference.
The case for Caledonia
Peel Hunt has an ‘outperform’ rating for RIT Capital and Caledonia but Leatham prefers the latter. “I gravitate towards things that are quite simple to understand and I don’t think Caledonia has ever been tempted to complicate the message or add in lots of bells and whistles,” he said.
“I think investors could easily put it in their portfolio and leave it there for a 10-year period and not necessarily have to worry about it.”
Caledonia has a strategic asset allocation of 30-40% in public companies, 25-35% in private capital and 25-35% in private equity funds. It aims to outperform inflation by 3-6% over the medium to long term and beat the FTSE All Share over 10 years.
Performance of trust vs benchmarks and sector over 5yrs
Source: FE Analytics
“The idea is to generate attractive long-term returns with lower than market volatility and maximise the use of the investment trust structure [by going] into less liquid investment opportunities,” Leatham said. There is a dual focus on building generational wealth and capital preservation.
The trust has “a very long-term, very deliberate investment style” stemming from its family office heritage and sticks to its knitting, he continued. The private capital team under Tom Leader focuses on robust, high-quality businesses with good cash generation and strong management teams, ideally operating in niche areas so they can take market share.
Caledonia is Winterflood’s sole recommendation from the Flexible Investment sector for 2025. Emma Bird, head of investment trusts research, said the discount offers an attractive entry point, “particularly given that shareholders recently approved a takeover waiver in relation to the Cayzer family ownership stake, which opened the door to a 5% buyback programme and removed a key constraint to buybacks over recent periods”.
Chris Salih, head of multi-asset and investment trust research at FundCalibre, is taking a “wait and see” approach to both trusts but has a slight preference for Caledonia, “given the strong dividend growth characteristics and stronger performance in recent times”.
In defence of RIT Capital
RIT Capital has a well-diversified portfolio with about 32% in private assets, 24% in uncorrelated strategies, mostly liquid credit, and the remainder in quoted equities, split between direct investments and third-party managers. The public equity portfolio includes opportunities in China, Japan, biotech and small- and mid-caps.
Prudence is a watchword for the investment team, analysts at Kepler Partners said: “Changes are made incrementally and the idea is that no one factor should knock returns significantly off course.”
The portfolio is constructed to preserve capital, generate real returns over time and deliver an element of protection during equity market downturns, they added.
The trust has a strong long-term track record but the past three calendar years have been much harder. “Equity risk exposure in the trust is much higher than many other constituents in the sector, but it also has had very little invested in the narrow cohort of mega-cap technology stocks,” Kepler’s analysts explained.
“Private companies (which RIT Capital has much more exposure to than most peers) drove very strong returns in 2020 and 2021 but have not contributed positively since then.”
Bird attributed the trust’s “significant de-rating” to public scrutiny of its unquoted investments but said there are signs performance is improving. “In its latest annual results for 2024, the fund delivered a NAV total return of 9.4%, outperforming the 5.5% return of its CPI plus 3% performance hurdle.”
Ewan Lovett-Turner, head of investment companies research at Deutsche Numis, said RIT Capital fell out of favour due to “questions raised over unquoted valuations, cost disclosure rules, limited promotion and unclear portfolio disclosures” but some of these headwinds are abating.
Cost disclosure rules have been amended and the private portfolio’s performance has been more resilient than expected, he said. Furthermore, J. Rothschild Capital Management has a new senior leadership team, which has improved the trust’s transparency and communication with shareholders.
Chief executive officer Maggie Fanari joined in March 2024 from the Ontario Teachers Pension Plan and brought in Mike Dannenbaum from Alliance Bernstein as head of public equities. Nick Khuu, who has spent over five years at J. Rothschild Capital Management, was promoted to chief investment officer at the end of 2023.
Caledonia and RIT Capital are both on Deutsche Numis’ recommended list but Lovett-Turner thinks RIT Capital has the edge currently. “The 28% discount offers an attractive entry point for a multi-asset portfolio, which we believe has the potential to deliver an attractive risk/return from exposures that are hard for investors to replicate. We believe downside to the shares is limited by share buybacks,” he said.
Hard-to-access investments include the Thrive and Iconiq funds, alongside private companies such as Motive (fleet management tech) and Epic Systems (healthcare records systems). “The strength of the new management team’s network has been demonstrated by an investment in SpaceX, which has delivered early gains,” Lovett-Turner added.
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