By Annabel Brodie-Smith
Well, I don’t know about you but our family are all ready for the summer holiday. Alex has finished the dreaded GCSEs and Fabian has finished his school exams – hurray!
Lucky Alex has headed off to France and Belgium for the orchestra tour. And we are going on tour too, or at least to Paris to watch him play his cello in a concert at L’Eglise de la Madeleine.
We are all very excited but of course, it wouldn’t be one on my holidays without some worries along the way. The TV pictures of rioting in France have been very concerning. Let’s hope it all calms down...
“It’s remained a tough time for investors with stubbornly high inflation leading to interest rate rises and more are now expected. But we do have some good news…”
It’s remained a tough time for investors with stubbornly high inflation leading to interest rate rises and more are now expected. But we do have some good news, the AIC’s Investment Company Showcase, our private investor event will be back on October 20th at the Novotel in Hammersmith. And this year you will also be able to attend online as well as in person. This is a great opportunity to meet fund managers and get some answers to all your questions. Please do save the date and we will be in touch with registration details soon.
"Commercial property is a classic interest rate sensitive asset class.”
This month Faith Glasgow is looking at a sector which is firmly out of favour, commercial property which has had a dire 18 months. It’s not surprising as Alan Ray at Kepler Investment Trust Intelligence explains: “Commercial property is a classic interest rate sensitive asset class.” The average discount of this sector is 29%, but the experts “are cautiously optimistic on REITs with low levels of debt that doesn’t need to be refinanced for a few years, and good-quality tenants.” Many investment companies are deemed worthy of further investigation including UK Commercial Property REIT, Schroder Real Estate, Custodian Property Income REIT, abrdn Property Income Trust and Regional REIT. But don’t forget Faith’s conclusion: “the fact remains it’s all about interest rates.”
We’ve also analysed the Biotechnology & Healthcare investment company sector which has suffered post-Covid and is down 3% over the last twelve months. The sector has good long-term performance, up 161% over ten years and we ask whether artificial intelligence (AI) could help turn performance around? Some think it could, with the managers of International Biotechnology saying: “AI is still nowhere near its full potential, so we expect it to serve as a catalyst driving the biotech industry into the future.” Do read more on our managers’ views of the Biotechnology & Healthcare sector.
Finally, Ian Cowie has explored Japan and has found something to celebrate. The six investment companies in the Japan sector achieved average total returns of 15%, while the five in the Japanese Smaller Companies sector averaged 7% over the past 12 months. There are some stand out performers with CC Japan Income & Growth Trust the best performer in the Japan sector up 27% over the last 12 months. And Nippon Active Value Fund is top of the Japanese Smaller Companies sector with a total return of 34% over the last year. While this could be another false dawn, Ian thinks: “optimists could consider some exposure to an economy that has languished for decades but where the long-term recovery may have only just begun.”
Finally, in our regular ‘Focus on…’ feature we are highlighting our documents and announcements tabs in Compare investment companies. This series of articles aims to help you get the most out of our website, theaic.co.uk, when researching or monitoring investment companies. For all our member companies, the documents tab gives you access to an investment company’s Report and Accounts and factsheet which are well worth reading when researching investment companies. Whereas the announcements tab takes you directly to an individual company’s stock exchange announcements.
I’d like to wish you all a wonderful summer. We are going on holiday to Croatia, and hopefully this will be a chance to swim and stare at the sea. Compass will be on holiday until our next issue in September. I do hope you have some time to relax and switch off.
Annabel Brodie-SmithCommunications Director, AIC
