By Annabel Brodie-Smith
This certainly sums up the world right now. Markets have had a wobble, the trade wars continue, economic growth is slowing down and the threat of recession is raising its ugly head. Let’s not even mention the never-ending saga of Brexit. This month our esteemed investment expert, Ian Cowie, takes a look at the ‘shocking start’ to October but reminds us medium to long-term performance has been good, with the average investment company up 62% over five years. It’s good to see that, as ever, Ian is getting stuck in with a new investment company purchase which has nearly a quarter of its portfolio in renewable energy, highly appropriate in the week of Extinction Rebellion protests. He’s also staying with his “global exposure to different companies, countries and currencies” with a smorgasbord of investment companies. So in these times where “market conditions are characterised by uncertainty, volatility and no small amount of nervousness”, according to Henderson Alternative Strategies, we thought we’d take a look at investment companies in the Flexible Investment sector. Some have an objective to preserve investors’ capital and deliver positive returns through different economic environments. They invest across different assets from quoted and unquoted companies to bonds, commodities, specialist debt and property. The managers told us how they are currently constructing their portfolios and their outlook for markets. They are finding opportunities in gold, emerging market debt and private equity. Finally, we thought we’d take a look at Europe. Yes - there are plenty of reasons why investors would think twice about investing in the region but according to BlackRock Greater Europe the continent is home to many businesses that are “giants in niches”, dominating their end markets from their home in Europe. Companies in the luxury goods sector like LVMH with their brands Louis Vuitton and Christian Dior are amongst the opportunities managers are finding. And let’s not forget the strong long-term performance: the average European investment company has returned 176% over ten years and the European Smaller Companies sector has performed even better.
With all this doom and gloom, I’m looking forward to a trip to sunny Seville in half-term. It’s definitely time to treat yourself to a little of what you fancy, so a trip to Spain, a homemade blackberry and apple crumble and a good glass of red wine or two are all going to be enjoyed by me over the coming month. Have a good October.
Annabel Brodie-Smith Communications Director, AIC
