By Annabel Brodie-Smith
So how was your summer? Yes it was soggy and cold at times but I had the most wonderful time in Paris and Croatia.
Culture, food and fashion dominated my time in Paris where the highlight was my eldest son Alex’s concert at L’Eglise de la Madeleine. Whereas in Croatia, the focus was on sunshine and swimming and exploring the beautiful cities of Split and Dubrovnik.
Currently, summer is back with a week of golden September days made for blackberry picking and apple gathering. And we are all back to school…
It was a gloomy summer for anyone remortgaging with the 14th consecutive interest rate rise taking UK rates to 5.25%. Markets were understandably subdued with a few exceptions, notably Nvidia. Although this week the Bank of England are sounding more cautious about future rate rises.
“The average investment company discount remains wide at 15%, slightly less than during the financial crisis when discounts hit a low of 16.4% in March 2009.”
The average investment company discount remains wide at 15%, slightly less than during the financial crisis when discounts hit a low of 16.4% in March 2009. Following that low in March 2009, the annualised return of the average investment company was 22% over the next three years. Of course, we don’t know if discounts have reached a low and what will happen next to markets. But investment company analysts are convinced that these wide discounts present a long-term buying opportunity for investors.
“Investment company analysts are convinced that these wide discounts present a long-term buying opportunity for investors.”
This month Ian Cowie explores what higher rates on bank and building society accounts, including the eye-catching 6.2% Guaranteed Growth Bond from National Savings & Investments means for savers and investors. He explains we need to think carefully “about the best deal for each of our individual needs” but Ian makes a convincing case for shares. The 2023 Barclays Equity Gilt Study demonstrated that over any period of five consecutive years during the past century, shares were likely to outperform bonds and deposits in about three in four investment periods of five years in a row. And he has plenty to say about the long-term benefits of investment companies too.
China has also been hitting the headlines with the renminbi falling to a 16-year low against the dollar after exports fell in August. Faith Glasgow explores deflation in China and what this means for investors. Elizabeth Kwik, investment manager at abrdn China Investment Company thinks the sell-off has been excessive: “This is a ripe opportunity to find quality assets at attractive prices that have the potential to generate superior returns once the market re-rates.” Faith concludes that China offers opportunities “for contrarians with a strong stomach.”
“This summer 20 investment companies achieved cult dividend hero status, having increased their dividends consecutively every year for more than 20 years. Welcome to the new heroes, Henderson Smaller Companies, Althelney Trust and BlackRock Smaller Companies.”
This summer 20 investment companies achieved cult dividend hero status, having increased their dividends consecutively every year for more than 20 years. Welcome to the new heroes, Henderson Smaller Companies, Athelney Trust and BlackRock Smaller Companies.
Finally, in our regular ‘Focus on …’ feature we look at a new tool, ‘My portfolios’, on our website www.theaic.co.uk. The ‘My portfolios’ page shows you a complete view of all your portfolios, their market value and the number of companies in each. It’s a really useful overview of your investment companies which can help you research and monitor your portfolio.
I’d like to wish you all a good month. Let’s hope the return to work goes well and the golden days of autumn continue.
Annabel Brodie-SmithCommunications Director, AIC