Strategy

Don't fear the reaper

With market direction hard to call, we consider the case for taking a long-term view in the investment trust sector…
David Johnson
Last update 03 November 2021

Disclosure – Non-substantive Research

This is not substantive investment research or a research recommendation, as it does not constitute substantive research or analysis. With this commentary, Kepler Partners LLP does not intend to influence your investment firm's behaviour. 

Investors are increasingly unsure about what to do with their money, at least according to those we speak to. The reflationary rally seems to be over, and since the summer the market has gyrated between value and growth, pandemic optimism and pessimism, clean energy and fossil fuels, et cetera, et cetera…

While the general consensus is now that inflation will remain high for a considerable period of time, it is unclear yet whether this is a bullish or bearish scenario. Unfortunately, an investment decision can’t be ducked at this point in time. High inflation means that cash savings are likely to degrade rapidly. ‘Safe haven’ bonds will see their value fall in real terms. Residential property values are likely to be weighed on by rising interest rates. Risk assets seem to be the only game in town (TINA).

In our view the structural features of investment trusts help long-term investors to have confidence that it may well be the best course of action to just close your eyes and buy.

In this article, we look at the different structural features of investment trusts that help investors with a long-term investment perspective ride out the inevitable bumps that will be experienced along the way.

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