By Annabel Brodie-Smith
Summer is proving elusive this year… it’s been bucketing with rain and decidedly chilly. No need to worry about watering the garden last weekend! The very good news is my brother is much better and is out of hospital – so grateful.
It’s also a relief that the election is over and we can all move on. Whatever you think of the result, to quote Nina Simone: “It’s a new dawn. It’s a new day. It’s a new life...” And some of you may be “feeling good.”
Markets have taken the much-predicted election result in their stride. There’s plenty of optimism about the stability the UK election result has brought about, a sharp contrast to the drama of the French election.
“Markets have taken the much-predicted election result in their stride. There’s plenty of optimism about the stability the UK election result has brought about…”
Our trusty investment correspondent Ian Cowie has set about making sense of what the election means for investment trust investors. He covers Labour’s main economic initiatives, including the drive to increase the use of renewable energy to achieve net zero carbon emissions, their pledge to spend more on the NHS and their plan to build more homes.
Ian highlights the opportunities these initiatives present, including the Renewable Energy Infrastructure investment trust sector and his personal investments in Greencoat UK Wind, which is yielding 7.1%, and Ecofin Global Utilities and Infrastructure, which yields 4.5%. Ian believes extra capital for the NHS could benefit specialist sectors like Property: UK Healthcare where high-yielding investment trusts like Impact Healthcare REIT and Target Healthcare REIT trade on hefty discounts of 24% and 28% respectively. Ian also notes that the UK All Companies, UK Equity Income and UK Smaller Companies sectors provide plenty of exposure to housebuilders.
Talking of new dawns, Japan is still on the ascent with the Nikkei and Topix hitting record highs yesterday. Last month I spoke to the managers of Schroder Japan Trust, Nippon Active Value Fund and CC Japan Income & Growth Trust to find out what the drivers behind the recent rally are and whether it can be sustained. It turns out that their optimism was well founded. It’s well worth listening to their answers on what they enjoy the most about investing in Japan – they come alive! Do read our release to find out more, including views from many more Japanese investment trust managers.
Finally, this month Faith Glasgow is back from her travels to delve into the proposed mega-merger between Alliance Trust and Witan Investment Trust. She digs deep and discovers more about the benefits of mergers for investors.
And don’t forget the Investment Company Showcase on 11 October in its new City location, 133 Houndsditch near Liverpool Street – you can also attend online. We will be bringing together more than 30 investment trust managers and it’s going to be an unmissable event.
Compass readers go free with the promotional code COMP1 so make sure to pop that on the form when you book.
Compass is now off on holiday until September. I’m not going away but I have two weeks off to relax at home with my family in Oxfordshire - I can’t wait. I’m hoping to succeed in getting my teenage boys out of their bedrooms!
I’d like to wish you all a lovely summer – if it ever arrives. We will be back in September, with sharpened pencils, ready for a new term.
Annabel Brodie-SmithCommunications Director, AIC
