By Annabel Brodie-Smith
I hope you had a lovely Easter long weekend.
I have been living it up in the wonderful East-meets-West vibrant and historic city of Istanbul. We saw some beautiful sacred sites – Hagia Sophia, the Blue Mosque, Topkapi Palace, Basilica Cistern and took a boat trip across the Bosphorus to the Asian side.
And to make up for all that walking we indulged in delicious Turkish food including the notoriously good Turkish breakfast – a feast of olives, cheese, fruit, breads, honey and eggs mixed with tomatoes, peppers and sausages! Not to mention dinners of hummus, salads, lamb and chicken shish, baklava, kunefe (sweet cheese and honey pudding) and, of course, Turkish delight. It was quite a trip!
Back to it – markets have bucked up and even the UK looks hopeful. My SIPP is healthier although there’s still scope for improvement…
With local elections on May 2 and speculation mounting about when the general election will take place (and what the result will be!), we have taken a look at the performance of UK-focused investment trusts under each parliament since 1987. Not surprisingly, UK investment trusts have performed well under a number of different parties as politics is only one element that contributes to investment returns. The best performance was under John Major’s government between 1992 to 1997, with an annualised return of 15.5%, and the worst performance was experienced in Tony Blair's second term from 2001 to 2005, with annualised returns of 0.4%.
And with the US elections taking place and a rerun of Trump versus Biden (yes it’s hard to believe but true), Ian Cowie is stateside examining the impact of the election. And it’s good news as the S&P has never fallen during a re-election year since Dwight Eisenhower won in 1956. Since then, the index has delivered average annual gains of 18% during the 10 ballots when an incumbent has sought another term. Ian highlights the strong performing investment trusts in the North America sector which are trading at significant discounts. This includes the top performer over one and five years, Pershing Square Holdings, on an eye-watering 27% discount and Baillie Gifford US Growth which is among the top performers in its sector over the last year and trades on a 10% discount.
A couple of weeks ago I had a good chat to some Biotech & Healthcare managers who were optimistic that small- and mid-cap companies in this sector were due a recovery. Valuations are low, M&A is booming and as for the US election, they didn’t think it will cause their sector any problems. Their main concern was inflation flaring up again causing interest rates to rise. Do watch the video of the managers - Marek Poszepczynski of International Biotechnology, Brett Darke of Bellevue Healthcare Trust and Geoff Hsu of The Biotech Growth Trust. And read the release which also includes comments from managers, Gareth Powell – Polar Capital Global Healthcare Trust, Roel Bulthuis – Syncona and Woody Stileman – RTW Biotech Opportunities.
Finally, Cherry Reynard explains share buybacks and what they mean for investors after the recent announcement that Scottish Mortgage is conducting a share buyback of at least £1 billion.
And hot off the press, I'm on AJ Bell's podcast in the 19th minute, explaining all about the investment trust dividend heroes – it's a great listen for investment trust enthusiasts. And do take a look at our list of 20 dividend hero trusts (over 20 years of consecutive dividend rises) and the 33 trusts which make up the next generation of dividend heroes (more than 10 years but less than 20 years of consecutive dividend rises).
Spring has sprung and British Summer Time is here – hurray!
Let’s hope the rain goes away and we can enjoy blue skies and the blossom blooming.
Kind regards
Annabel Brodie-SmithCommunications Director, AIC
