By Annabel Brodie-Smith
Last week we celebrated the Platinum Jubilee with the first ever AIC Bake Off. It really was a festival of cake! I needed the help of Alex, my master baker son to help me produce his legendary strawberry cupcakes. Luckily, my name was drawn out of the hat and I won a Jubilee teatime hamper.
There were also celebrations in our village where we had a lovely Jubilee street party which included the essential components: bunting, red, white and blue flowers, Pimm’s, coronation chicken and Platinum Pudding. It was true rural fun where after supper the children roamed around the fields, parents stood around drinking a white almond drink and the village dogs did a wonderful job clearing up any crumbs.
Following this you may be in the mood for our experts’ views on why investment companies have continued to be successful for more than 70 years of the Queen’s reign. Directors, managers and analysts explain what’s changed in the industry and what were the most challenging times of their career. The commentators include some experienced leading lights of the industry including Hamish Buchan, former chair and director of nine investment companies, Max Ward, manager and director of Independent Investment Trust and manager of Scottish Mortgage Investment Trust from 1989 to 2000, and Jeremy Tigue, manager of F&C Investment Trust from 1997 to 2014.
This week has bought a confidence vote for the Prime Minister and inflation continues to dominate (the cost of filling a family car is now over £100 – yikes!). However, the UK market remains relatively robust, up 1% this year, with high exposure to oil, gas and mining all helping.
Another sector that has come bouncing back since the pandemic is UK Commercial Property. Jennifer Hill examines the prospects for the sector, which is up 19% over the last year with an average yield of 4.7%. Those brave investors who took the plunge in lockdown have been rewarded, but there are still some diversified property companies on double-digit discounts. Of course, the possibility of a recession is not reassuring for property owners and perhaps this explains why there are some wide discounts. However, it’s well worth reading Jennifer Hill’s compelling reasons why investors should consider property as part of a diversified portfolio. Particularly relevant right now is the ability of property to protect returns from inflation with index-linked rent reviews helping to boost investors’ income.
Meanwhile, Ian Cowie has gone stateside to examine prospects for the land of stars and stripes. The US has had a tough time but despite the “brutal rebooting” of the Nasdaq it continues to trade 95% higher than five years ago. Whereas the broader Standard & Poor’s 500 index, although down 14% from its January high, remains up 69% over five years. Ian identifies some investment companies in the North American sectors on discounts for income and growth seekers.
Finally, do tune in to the Investors' Chronicle “Future of Private Investing” digital event on Wednesday 15 June. It’s free to register on and the AIC is participating. Richard Stone, our Chief Executive, is discussing whether investment companies are the best way to capitalise on megatrends, as well as considering the merits of investment companies versus ETFs. I’m discussing investing for income alongside Sue Noffke, manager of investment company Schroder Income Growth. It would be great to have some Compass friends watching us. No hard questions please…
Wishing you a good month and let’s hope “Flaming June” becomes a reality soon!
Kind regards
Annabel Brodie-Smith Communications Director, AIC
