My last two columns (‘Investment trust discounts are about to turn a corner’ and ‘Why I'm buying equity investment trusts’) suggest investment trust discounts have widened to very attractive levels and, more generally, that market sentiment is overly poor relative to the outlook. This is a good entry point for long-term investors.
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 gradually increasing their equity exposure at the expense of more defensive assets such as capital preservation trusts, commodities, renewable energy and cash.
Market volatility is set to continue for a variety of reasons, and such a journey and pivot, no matter how measured, is rarely a smooth one. Our compass in these choppy waters remains firmly fixed on UK equities and private equity companies given their attractive valuations and prospects. However, this month also saw a global generalist company added to the portfolios – one that very much focuses on investments that are attractively valued, including Japan.