Investment trust discounts have widened to very attractive levels and, more generally, market sentiment is overly poor relative to outlook. Having been more defensively positioned than normal in recent years, which has compensated somewhat for discounts widening over the period, the John Baron investment trust portfolios have been seeing a gradual increase in their equity exposure at the expense of more traditionally defensive assets, such as capital preservation trusts, specialist lenders, gold, renewable energy infrastructure, commodities, commercial property and cash.
Regular readers will be aware that the two portfolios covered in this monthly column are two of 10 real investment trust portfolios managed in real-time on the website. Previous columns have highlighted some of the companies that have given expression to this gradual pivot towards equities, which has focused on the UK market and private equity given their valuation and outlook. This pivot has also been ongoing within the website’s two portfolios that are focused on protecting the environment.