By Annabel Brodie-Smith
I hope you are all well and have managed to enjoy some time outside during the sunniest May ever. My husband’s birthday barbecue has had plenty of use and we’ve been swimming in the river.
Baby steps towards a new normal are being tentatively taken, with more shops opening on June 15th and, the one I’m most excited about, July 4th mooted for the reopening of some pubs, cafes and restaurants. In the meantime, the kitchen office is in full swing and this week I have also been adjudicating my younger son’s school tests.
Stock markets are also grappling with the new normal and there’s some better news. The Global investment company sector is up 12% in the last three months to the end of May and up 16% over the last year. It’s still too early to be sure that the worst is behind us. The possibility of a second coronavirus spike remains very real and there’s concern that markets have got ahead of the forthcoming economic problems. However, long-term investors are all too familiar with these uncertainties and are investing for the long haul. With dividends under pressure, exemplified by Shell making its first dividend cut since the Second World War, it may be time for income seekers to look further afield. So we asked the analysts to look beyond the UK and Global sectors and to consider where the other investment company income opportunities lay. They named companies in a range of sectors from Asia Pacific Income and Japan to Infrastructure, Debt - Structured Finance and Property - UK Residential.
The spotlight during the pandemic has been on the Biotechnology and Healthcare sector, which has continued to thrive, up 9% over the last three months and up 19% over the year. This month our investment guru, Ian Cowie reviews his successful investments, which include Worldwide Healthcare Trust. He also explains why the search for a coronavirus vaccine prompted him to invest in April in International Biotechnology Trust.
Vaccines, tests and treatments for coronavirus are dominating the daily news so we thought we’d update you on the investment companies investing in this sphere. It’s encouraging to see many investment companies outside the specialist sectors investing in the fight to combat coronavirus. For example, the Global investment company, Scottish Investment Trust invests in Gilead Sciences which make remdesivir, a drug developed in the fight against Ebola, which is being used against COVID-19. VCTs also feature prominently, with Foresight VCT and Foresight 4 VCT investing in Biofortuna which is acting as a contract manufacturer for two global customers to deliver laboratory-use tests for COVID-19.
Finally, it’s been inspiring to see how people in the UK have come together during the coronavirus pandemic, with Major Tom’s achievements quite rightly making him a household name. So, it’s heartening to see how the investment company sector and their portfolio companies have been helping during the crisis. Read how the industry has been helping by donating PPE, offering services for free and providing support and advice to small businesses. And at the AIC, our communications team completed a 5K charity run, although I opted to row it instead. There are some rather sweaty pictures but we felt good afterwards!
Wishing you a healthy June. Annabel Brodie-Smith Communications Director, AIC
