Rumours are circling that SpaceX, Elon Musk’s rocket launching juggernaut, which recently merged with xAI, the Tesla CEO’s Grok and X owning holding company, is set to finally blast off into the realms of public listing in mid-2026, which, when you think about it, isn’t far away.
Should the reported valuation of $2trn (£1.75trn) come to pass, it will be the biggest ever IPO by a long shot – the current record is held by Chinese ecommerce platform Alibaba, which was worth $169.4bn when it floated in 2014 (around $235bn when adjusted for inflation, according to usinflationcalculator.com).
Founded in 2002, SpaceX is one of many companies playing into a growing trend of staying private for longer. For comparison, Facebook was founded in 2004 and went public in 2012. SpaceX has been a private company for three times as long as Mark Zuckerberg’s was.
As a result of this, the number of domestic companies listed on major US stock exchanges has more than halved since its peak in 1997, falling from 7,451 then to 3,657 by the end of 2025, according to Jay R. Ritter, director of the IPO Initiative and Emeritus professor at the University of Florida’s Warrington College of Business.
Hence, ignoring private equity within portfolios leaves a huge swathe of global companies untouched. Private equity has historically not been an easy part of the market to get access to, but fortunately investment trusts open the asset class up to Joe Public – and there are plenty of different ways of doing so, which we’ll spin through below.
The private equity sector of the Association of Investment Companies’ universe is the most obvious place to start here. The sector houses a plethora of different strategies and encompasses a myriad different parts of the private equity spectrum, about more of which you can read in our guide to private equity.
There has been a divergence in performance recently, with laggards such as 3i Group and HgCapital (HGT) having been hit by trust-specific factors (slower-than-expected growth by Dutch discount retailer Action and worries about the impact artificial intelligence will have on software companies, respectively).
Fears over weakness in private credit markets may have caused some to worry about private equity, too, and we’ve certainly seen weakness in some other names in the sector. Yet, this could present an interesting opportunity for adventurous investors to gain, or increase, exposure, in our view.
After a slight recovery, Pantheon International's (PIN) share price has fallen c. 5% from its recent high, yet it boasts one of the longest track records within the listed private equity sector. It offers investors a one-stop-shop exposure, with a portfolio curated by the specialist team at Pantheon, offering access to the best private equity funds globally, as well as direct company investments.
PIN’s board was, in many respects, the first mover in addressing what has looked like a sector-wide performance and discount malaise, and that looks set to continue under new chairman Tony Morgan, who is committed to implementing measures to make PIN more even attractive to investors and, hopefully, over time, tackling with the current 27.5% discount.
NB Private Equity Partners (NBPE) has been hit harder, with shares now down c. 11% from their recent peak. NBPE provides a differentiated exposure to private equity, thanks to its exclusive focus on direct co-investments. This allows management to choose each and every company on their own merits and confers a number of fee and capital efficiencies on the trust.
Underlying revenue and earnings growth from the portfolio has been strong and the board looks to be on the front foot, having recently indicated a step-change in the pace of both making new investments and a renewed commitment to buybacks. Again, the discount of c. 27% looks attractive to us.
The so-called SaaS-pocalypse has clearly brought to the fore the risks of being heavily focused on software, yet it’s possible that the baby has very much been thrown out with the bathwater when it comes to the sector as a whole. HGT’s rating has widened significantly, going from a c. 5% premium as recently as November 2024 to a c. 30% discount at the time of writing.
HGT’s team has significant experience of building businesses that provide critical services for many thousands of businesses globally and are very close to their investee companies. Given this, it seems likely that they’ll have their fingers on the pulse and the ability to determine which are the most susceptible companies to AI risk and which are most likely to even thrive in this backdrop.
The venture capital part of the private market complex offers the potential for high returns and is an area that Molten Ventures (GROW) focuses on, specifically in Europe. While the US certainly takes most of the plaudits here, Europe has plenty of world-class companies here, too.
GROW’s top holding Revolut recently penned a major funding deal with NVIDIA and other key positions are also seeing valuation uplifts and providing cash realisations that validate the NAV.
On that topic, GROW had a tough 2023 and 2024 thanks to a confluence of factors all working against GROW at the same time: rapid rate hikes, risk aversion on the outlook for key economies, cost inflation and heavy selling of UK equities.
Yet, GROW has now delivered two consecutive positive NAVs, suggesting a corner has been turned. The share price has doubled over the past 12 months and the discount has narrowed to put it more in line with its listed private equity peers, yet a c. 28.5% discount may still undervalue the opportunities that are ahead for GROW.
As we mentioned earlier, we think that an investor’s portfolio should take the best parts of public markets and marry them with the best parts of private markets into a portfolio that is agnostic of whether a company is listed on a stock market or not. This is also the case for investment trusts themselves and there is a growing number of trusts that can and do allocate a portion of their otherwise-listed holdings with private firms.
This includes Baillie Gifford’s stable of trusts, where Scottish Mortgage (SMT) continues to stand out, despite its small premium rating. SMT combines the best of both worlds: the likes of NVIDIA, Amazon and Ferrari from public markets with the likes of SpaceX, Anthropic and ByteDance from private markets.
There are some under-the-radar opportunities here, too, though. The board of Ashoka India Equity (AIE) recently increased the trust’s allowance for pre-IPO companies to 15%. This sleeve of AIE’s portfolio sees the trust invest in companies just before their IPOs.
This increases the opportunity set available to the managers, and enables them to capitalise on the heterogeneous and fragmented market that has the same issues of being under-researched and therefore offers considerable alpha potential.
India’s market has been going through a tough period recently, but AIE’s Ayush Abhijeet recently told us on a podcast that despite this the country’s IPO market remains buoyant.
Finally, Hansa Investment Company (HANA) has recently undergone a transformation after some corporate activity in 2025. With the sale of Brazilian logistics firm Wilson Sons and merger with Ocean Wilsons, HANA has become a diversified, multi-asset portfolio that blends a range of global investment strategies with direct equity investments, bonds, specialist hedge funds and private assets.
The Wilson Sons sale meant that the trust had over 24% cash at the point of its latest factsheet on 28/02/2026. Once that money is put to work, manager Alec Letchfield sees HANA being c. 70% invested in equities, c. 10% in diversifiers and c. 20% in private equity.
For now, a c. 45% discount provides a compelling opportunity to get in at the start of what we think could be a fascinating long-term journey.
SpaceX may not be long for the private equity world, but we see plenty of opportunities for adventurous, long-term investors to get access to this thriving area of financial markets.
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]]>Schroder Japan’s (SJG) latest results come against an increasingly constructive backdrop for Japanese equities, albeit one that is becoming more nuanced. Whilst performance has remained strong, the drivers are evolving, with returns now less reliant on broad market re-rating and increasingly dependent on structural themes, earnings delivery and stock selection. In this context, we think the trust’s positioning is well aligned with the broader evolution of Japan’s investment case, where active management can make a real difference.
Whilst value and smaller companies provided a supportive tailwind, outperformance was ultimately driven by stock selection within key evolving themes. Corporate governance reforms are increasingly translating into improved capital allocation and shareholder returns, whilst the shift away from deflation is supporting a more durable earnings backdrop. At the same time, structural themes such as AI, automation and defence are broadening beyond headline beneficiaries, creating opportunities further down the value chain where valuations remain more attractive. Importantly, the portfolio has benefitted from these dynamics without relying on the most obvious or crowded areas of the market.
For example, within AI, Masaki has focussed on underappreciated enablers such as JX Advanced Metals. This reflects his broader, valuation-aware approach, favouring second-order beneficiaries over more crowded ‘proxy’ trades, which we think allows the portfolio to access structural growth via differentiated avenues, often without paying the premium attached to widely owned names.
There are, however, some near-term considerations. Valuations across the Japanese market have moved higher, and global uncertainties, including geopolitical tensions and questions around the sustainability of AI-related investment, may drive periods of volatility. SJG’s positioning, particularly its exposure to smaller companies, could see performance fluctuate in such an environment, especially if market leadership shifts back towards more growth-oriented areas.
That said, we think the underlying case remains compelling, particularly in light of the current discount. Having narrowed to c. 2.8% at the start of the year on the back of strong performance and growing income appeal, SJG’s discount is now c. 11.7% which, in our view, looks overly wide. The portfolio offers differentiated exposure to a market undergoing structural change, supported by its focus on underappreciated, second-order beneficiaries and a meaningful allocation to small- and mid-cap companies, where stock selection can be particularly rewarding. Alongside this, SJG offers the highest yield in the sector, broadening its appeal beyond traditional income markets such as the UK and Europe. The recent fee changes and increased marketing budget are also notable and may help support demand over time. Taken together, we think SJG represents a differentiated and potentially mispriced way to access Japan’s evolving equity story.
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]]>It felt like the stock market in March behaved more akin to a drunken person catching the last train home after a week-long binge and then having to stumble home after having fallen asleep and ended up at the end of the line in the middle of nowhere.
What seems clear, looking at the one- and five-year charts, is that US markets look to be gradually rolling over, news overnight (as I was writing this article) that Iran had tentatively agreed to a ceasefire notwithstanding, as artificial intelligence (AI) excitement gets replaced with fears over software-as-a-service firms being disrupted by AI and the uncertainty of geopolitical ructions and the future of spheres of influence.
Indeed, the NASDAQ Composite briefly slipped into correction territory towards the end of March, though the S&P 500 has, thus far, somehow escaped the same fate. Other regions had had it worse. Japan’s Nikkei 225, the UK’s FTSE 350, Europe’s STOXX 50 and India’s Sensex all well and truly corrected, before bouncing. Still, it could probably have been worse; markets have remained surprisingly resilient.
UK investors pulled a net £1.4bn from equity-focused funds in March, according to the funds network Calastone. This was the seventh-worst month on record and the biggest net outflows since November 2025. Nowhere was safe, with Europe, Asia Pacific, emerging markets and Japan seeing the biggest outflows. Interestingly, North America was the only equity sector with net inflows.
Amid all this, we still need to find places to invest, not an easy prospect when the world looks uncertain and market movements are taking their cues from President Trump’s Truth Social postings, profanities and threats to wipe out entire civilisations included.
These were the most (and least) popular shares with UK retail investors on three of the largest investment platforms last month:
The first observation I’ll make is that investors seemed to go back to what they know: income-generating, large-cap UK stocks dominated the list. There were only 11 different companies on the top 10 most-bought lists of the three main platforms we check. The only firm that did not make the list above was NatWest (NWG).
Further, there were no US stocks on the most-bought list, and only NVIDIA (NVDA) made the most-sold list, perhaps suggesting investors are not quite sure how things will play out in the short term: we could see a sharp rally in US bourses if the conflict in Iran de-escalates; or an even bigger drop if the oil price continues to rise and threaten a global recession.
Big yields remain attractive to most: Legal & General’s (LGEN) dividend yield is c. 8.6%, Taylor Wimpey’s (TW) is c. 9% and the likes of BP (BP) and Lloyds (LLOY) are around the 4% mark. Seemingly, adding exposure here seems to be the order of the month.
Barbelling that, the defence and aerospace names Rolls-Royce (RR) and BAE Systems (BA) were being topped up after falling c. 20% despite the powerful tailwind of soaring military spending from NATO countries not having dimmed.
One interesting thing we did see was the return of airlines. This was the first time the budget carrier easyJet (EZJ) and British Airways owner International Consolidated Airlines (IAG) have appeared in our list since January 2025 and December 2024 respectively.
The Iran conflict has caused havoc on airline share prices. First, the Middle East, Dubai in particular, has become a popular destination for holidaymakers (and people who don’t particularly like paying tax), so the temporary cancellation of flights hasn’t been ideal.
More importantly, fuel is a key component of their airlines’ business models because they need to fuel every plane they fly. Hence, higher gas prices mean it’s more expensive to fly, which crimps their (already razor-thin) profit margins.
Hence, EZJ and IAG saw around a quarter of their value wiped off from the start of the war to the worst of it (before bouncing harder than most others stocks in the wake of positive news).
This seemingly lured bargain-hunting investors into buying the dip. That said, it is an interesting contrast to hedge funds, which have been ramping up their short bets against airlines including EZJ, which as we wrote last weekend was the 13th most-shorted UK stock, and its peer Wizz Air (WIZZ), which was and still is the most shorted stock.
The seeming corollary of beaten-up airline stocks being bought was that now-soaring oil companies are being sold, as investors take some profits after the oil price spike.
Shares in the oil majors BP and Shell (SHEL) rose c. 40% and c. 30% respectively through the first quarter of 2026 and were up as much as c. 80% and c. 60% respectively since their Liberation Day lows 12 months ago. It seems prudent, then, that many took the opportunity to trim some cash off the top.
Moving onto investment trusts, and the top of the list remained broadly unchanged, but we did see some new entries further down the list:
Again, very little changed here, as investors were cautious when considering making big changes. It’s likely that the likes of Scottish Mortgage (SMT), City of London (CTY), Greencoat UK Wind (UKW) and Temple Bar (TMPL) are now monthly investments for many.
The latter three of these also play into the income theme we see here: UKW now yields c. 10%, with CTY and TMPL a lower yet still attractive 3.8%.
Another new addition to our list is Henderson Far East Income (HFEL), which looks to generate a high and growing dividend by investing in companies listed in the Asia Pacific region, as well as benefitting from the growth potential of the region.
Capital growth had seemingly been hard to come by, with the share price halving between 2017 and 2025, but the renaissance in emerging markets has proven a boon for the trust, which is up c. 35% since Liberation Day and yields c. 9.5%.
In stock world, we saw the return of housebuilder Taylor Wimpey and in investment trust world, Primary Health Properties (PHP), a real estate investment trust that owns and operates primary healthcare facilities across the UK and Ireland, crept into our list.
Another trust with a chunky yield, this time sitting at 7.5%, PHP’s portfolio comprises things like GP medical centres, diagnostic centres and private hospitals. Around three-quarters of its revenues come from GPs or government bodies, followed by private operators and pharmacies.
It recently merged with Assura to create a £6bn portfolio of healthcare properties. Assura owns properties such as children’s hospices and ambulance hubs.
Recent results showed that rent reviews had contributed to top-line growth, while it had pushed ahead with cost savings following its purchase of Assura.
It seems sensible that investors have been taking a beat, pausing for thought and many other cliches while the conflict in the Middle East rumbles on.
I wrote this article on Wednesday afternoon and Thursday morning, in between which came news that Iran would consider ending the fighting, just 90 minutes before US President Donald Trump’s deadline for agreeing a deal ended.
Markets took this as absolute good news, with oil plunging by almost 15% overnight and share prices jumping. Yet, questions do remain. Iran said it would agree to a ceasefire, but set out a 10-point plan of its own through its state broadcaster.
This plan includes a cessation of hostilities in Iraq, Lebanon and Yemen; compensation paid to Iran; the lifting of sanctions placed on Iran; and the release of Iranian funds and frozen assets held by the US – all or some of which seem unlikely.
Still, we’ll wallow in some good news for the time being and see you in 30 days time.
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]]>Take the National Lottery. Some 7,700 lucky souls have hit the million-pound jackpot, which sounds quite encouraging until you consider the odds stand at one in 45 million. Putting that into (a less uplifting) context, you’re 40 times more likely to be struck by lightning.
ISAs, meanwhile, have been minting millionaires at a rather more dependable rate. The UK's 10,000 ISA millionaires already outnumber lottery winners, with that figure expected to reach 40,000 within a decade. Admittedly it requires more than a weekly £2 lucky dip but at roughly one in every 400 ISA holders, the odds start to look distinctly more palatable.
Better still, you don't need the stock-picking skills of Michael Burry to get there: almost 70 investment trusts would have turned a fully-subscribed ISA into a seven-figure sum for investors who started in 1999, according to the AIC. Despite the Magnificent Seven monopolising the limelight in recent years, there’s a wealth of homegrown talent, with twice as many UK smaller companies funds on the list as all of the North American funds combined.
Among them is BlackRock Smaller Companies (BRSC), a trust that’s weathered more than its fair share of depressions, wars, recessions and bear markets in its 120-year history. Investors who’ve maximised their ISA allowance each year since 1999 would today be sitting on an ISA portfolio worth over £1.3 million, a testament to the rewards of patient compounding over performance chasing.
The investment case for UK smaller companies is equally compelling over a longer timeframe. In the seven decades to 2025, they delivered annualised real returns of 9%, comfortably ahead of the sub-7% for US equities and just 3% for fans of bricks and mortar, according to Deutsche Numis.
This outperformance is underpinned by the higher growth trajectory of small-caps, with the natural advantage of starting from a lower base. Smaller companies also tend to be more agile than their larger counterparts and able to capitalise on emerging opportunities in often-overlooked niches.
This superior growth potential does come with a trade-off as smaller companies are typically more sensitive to risk-off sentiment, with macro headwinds driving investors toward larger, more defensive names over the last decade. As a result, UK small caps have suffered a double whammy, facing a global rotation away from the asset class as well as subdued investor appetite for UK equities.
However, sentiment had begun to show clear signs of improvement heading into 2025. The FTSE 100 climbed to record highs, gaining 26% in 2025, while the S&P 500 managed a comparatively underwhelming 9% in sterling terms. The FTSE UK Small Cap Index delivered a respectable 14% return, though with relatively narrow leadership.
Two main catalysts could see this recovery broaden across the wider sector, the first of which is attractive valuations. The MSCI UK Small Cap Index trades more than 40% below its US small-cap counterpart on a forward price-earnings basis and almost 20% below European small caps (as at 27/02/2026). And this discount has not gone unnoticed: there were more than 50 offers for UK listed companies in 2025, with average bid premiums rising to 46% as depressed valuations prompted some bargain hunting by US and financial buyers.
The second is flows, with a clear reallocation away from the US driven by the sense that American exceptionalism may have peaked and growing concerns over returns from AI spending. The Bank of America Global Fund Manager Survey recently recorded the largest rotation out of US equities since records began, with allocations shifting to Europe and other international markets.
That money has yet to reach the UK, with UK equity funds suffering another £10 billion outflow in 2025, but the earnings case is becoming harder to ignore. Over 70% of UK public companies beat expectations in the first half of 2025, with full-year earnings growth coming in at a solid 6.2% for the MSCI UK Index, compared to 1.4% for MSCI Europe. Capital tends to follow performance and a reversal in outflows could have a significant impact on returns.
Attractive valuations and an under-researched universe make for a fertile hunting ground for active managers.
BRSC has a long and proven track record in navigating the UK small-cap universe and its planned merger with BlackRock Throgmorton (THRG) will create a larger, more liquid trust with a meaningfully lower fee structure. The combined entity will be co-managed by Roland Arnold and Dan Whitestone, who between them bring over four decades of experience investing in UK smaller companies.
Both trusts have endured a challenging few years, with rising rates and weak appetite for UK equities working against their quality growth investment style. Their longer-term record, however, speaks for itself: THRG and BRSC have delivered total returns of 98% and 75% respectively over the last decade, well ahead of the benchmark's 56%.
With the tailwind of resilient fundamentals, the enlarged trust looks well placed to capture a sustained recovery in UK smaller companies. For aspirational ISA millionaires, history suggests the odds compare rather more favourably than a lucky dip and there's no danger of having to share the spoils with a Wernham Hogg syndicate from Slough.
Returns: share price returns as at 31/03/2026. Benchmark: Deutsche Numis Smaller Companies plus AIM (excluding Investment Companies) Index.
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]]>If you want to outperform, you have to do something different, and if you had invested in LatAm last year, you would certainly have been doing something different. The region is an afterthought for most investors, making up a tiny allocation in the emerging market indices and an even smaller one in global indices – 0.1% of the MSCI ACWI. Yet it is responsible for 7.1% of global GDP, is a critical source of many commodities and has a large and growing middle class creating a wave of demand for goods and services higher and higher up the value chain.
The region can certainly be volatile, but there are good reasons to think it’s strong run can continue. Brazil looks well set up for the coming year, with exceptionally high real interest rates. Rate cuts should be positive for equity valuations and economic activity. Meanwhile, October will see Presidential elections, with incumbent Lula trailing a more business-friendly candidate in the polls. Valuations are also still extremely low in relative terms, even after such a good 2025. And in a world seeing heightened geopolitical tensions, Latin American countries can generally trade with both the US and China, and are rich in the commodities required by reshoring of production, the renewables build out and AI data centre construction.
BlackRock Latin American’s (BRLA) position in domestic Brazil looks particularly interesting to us. Rate cuts and political change could be a powerful combination for an exceptionally cheap market, and could encourage domestic investors to come back into their home equity market, providing strong technical pressure. We also think the team’s reach as regional specialists places them well to take advantage of opportunities in the smaller countries in the region, which are even less likely to be covered by broad emerging markets funds. Commodities can be particularly important for these markets, and we note that they have in some cases been surprise beneficiaries of the AI trade, given demand for raw materials needed to build the infrastructure.
BRLA’s board has committed to a 100% tender offer in four years’ time which removes one of the risks of investing in a closed-ended vehicle while retaining the advantages of reduced cash drag, the ability to take on gearing, and being able to pay a dividend from capital – this last factor used to full effect by the trust. Investors can invest with confidence that they won’t be forced to sell at a discount if the region falls out of favour in four years’ time. We think there is a powerful case to overweight the region at this moment, and BRLA stands out as a way to do this.
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]]>But gold's true cultural pinnacle undoubtedly came when Spandau Ballet declared it indestructible in a power ballad that, against all musical logic, just refuses to die. Mercifully, the new romantic bouffant didn't enjoy the same longevity, though given the inexplicable revival of the Kevin Keegan mullet among Gen Z, never say never.
And markets have been doing their best to keep the party vibe going. The shiny metal notched up more than 40 record highs in 2024, doubled down with another 50-plus in 2025 and rounded things off with an all-time high of almost $5,600 in late January. At that point, the "everything hedge" looked well-nigh invincible.
Then came an unexpected test in the form of the Iran war. On paper, the price of the ultimate safe-haven asset should have soared, as it did during the textbook response to Russia's invasion of Ukraine. Except gold missed the memo this time around, with prices dropping by more than 20% to settle back to $4,500.
After one of the great commodity bull runs of modern times, has gold finally lost its lustre or just its nerve?
To put the current volatility into context, it's worth rewinding to the structural shift that set the rally in motion in the first place.
In the years following the global financial crisis, gold moved reliably in line with real interest rates. In other words, when rates fell, gold rose, and vice versa. That relationship broke down when inflation returned with a vengeance in 2022, with gold and interest rates rising in tandem.
What triggered this U-turn? Well, largely central banks. As the chart below shows, net purchases of gold more than doubled following the freezing of Russian assets in 2022. Funnily enough, when the dollar became weaponised, the rest of the world started looking for a more neutral store of value.
That said, central banks are not impervious to price dynamics, with net purchases dipping last year, but the long-term case for de-dollarisation still remains intact. Indeed, the latest Goldhub survey reveals that developing nations now cite geopolitical instability as one of their primary reasons for holding bullion.
And retail investors have followed suit in a classic late-cycle dynamic. The World Gold Council reported that demand for physical gold hit a 12-year high in 2025, while ETF inflows chalked up their second-highest year on record, followed by another monthly record in January. At that point, gold prices had spiralled into peak FOMO territory.
But, as we know, momentum can have a nasty habit of reversing. When the Iran war sent broader markets into a risk-off retreat, with the FTSE 100 and S&P 500 both shedding 5% in the last month alone, gold was an obvious candidate for a spell of profit-taking.
The bears certainly have some cause for caution: investors who piled in at the January peak will be sitting on heavy losses and recent North American ETF outflows have been significant.
Then there’s the macro headwinds. Gold is priced in dollars, so a stronger greenback is an automatic headwind. Higher energy prices may be bad news for most economies but the US is a relative beneficiary as a net oil exporter, lending further support to the dollar.
Soaring energy prices have also blown up the hope of inflation returning to its 2% target any time soon, prompting the Bank of England to signal that the expected rate cut could well reverse into hikes. That, in turn, raises the opportunity cost of holding a non-yielding asset such as gold.
But the bull case hasn't vanished entirely. The threat of sanctions still looms, and with an unpredictable US administration at the helm, there's a lot to be said for keeping some reserves beyond the dollar’s orbit. And while Western investors may have been selling, Chinese retail investors are still filling their boots.
The Iran war has also introduced a stagflationary cocktail of rising oil prices and slowing growth, which fuelled gold's first major bull run in the last great episode of the 1970s. There were sharp pullbacks along the way but these proved to be buying opportunities for the brave rather than a protracted bear market.
Investors wanting exposure have two main options. The straightforward route is a gold tracker that doesn't require channelling your inner Jay-Z. The Invesco Physical Gold ETC fits this brief, delivering a 47% return over the past year with a low ongoing charge of 0.12%. Head over to our sister website, Expert Investor, to find out more about the fund.
Mining equities offer a further lever. Using the VanEck Gold Miners ETF as a sector proxy, miners outperformed the underlying gold price by almost 30 percentage points in 2025, thanks to rising margins and improved capital discipline.
BlackRock World Mining (BRWM) pairs gold miners with copper and silver to capture broader structural themes such as electrification and AI data centres. It’s served up a 92% return over the past year, alongside a 3% dividend yield. Have a listen to our recent Market Matters podcast to hear manager Olivia Markham’s thoughts on gold.
The million-dollar question is whether gold can resume its upward march. Things are looking fairly positive, with Goldman Sachs expecting prices to rebound to $5,400 by year-end and nearer to $6,000 for the more bullish analysts.
If structural demand from central banks holds firm, this correction may yet prove to be an expensive pit stop rather than the end of the road.
All data as at 31 March 2026 unless stated otherwise, returns based on share price total returns.
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]]>The point, essentially, is that newsflow is moving fast – and markets are responding just as rapidly. Investing when the outlook is murky isn’t easy. While many will want to buy the dip, arguably taking a beat and not rushing into any rash decision may prove the most prudent course of action.
Still, it’s good timing for the latest edition of our run-through of the UK companies that hedge funds are most heavily shorting. There’s been plenty of movement since October, that’s for sure.
It’s been a good six-month period for the UK stock market, with the FTSE 100 soaring to within touching distance of 11,000, a level it’s never come close to before. Some steam has come out of that momentum since the Iran war started, with the blue-chip bourse now trading back around 10,000, down 8.5% from its high.
The energy shock, with crude oil climbing to c. $100 per barrel, has particularly hit the more domestically oriented FTSE 250, with the mid-cap index into correction territory at c. 11% from its most recent high (which, in turn, remains below its all-time high set back in 2021).
As a reminder, shorting a stock is, essentially, the act of betting that an individual company’s share price will fall, rather than rise (the opposite of what most investors will do).
As we commented last time, we absolutely do not think that ordinary investors can successfully run a book of short positions – and that’s especially true in choppy waters such as now.
However, we do think that it’s a good idea for investors to know which of the stocks in which they invest are being bet against. Exploring the bear case for all of one’s individual long positions can be a good way to play devil’s advocate and ensure you’re happy with your position, or if you think your initial investment thesis has run its course.
Regulations ensures that short positions of 0.5% or greater of a stock must be disclosed and the Financial Conduct Authority (FCA) tracks these disclosures. The website ShortTracker, which is run by Castellain Capital, is a good resource to quickly ascertain how much of a company’s shares are being shorted.
Considering the choppiness of global stock markets, it’s perhaps unsurprising that we’ve seen a lot of change since our last update six months ago. In particular, companies where fortunes are tied, whether directly or indirectly, to the oil price have seen movement.
Ashtead Technology (AT), which rents out subsea technology systems to the global offshore energy industry, was top of the chart in October. At one point, almost 10% of its shares were being sold short. That number has fallen significantly as short positions have been taken off. Now, less than 4% and the company has fallen out of the top 15.
The current conflict in the Middle East has seen the closure of the Strait of Hormuz by Iran, with oil prices spiking around a third over the past month. This has been a boon for oil producers and potentially provides a constructive backdrop for AT’s services.
On the flipside, a higher oil price – and war in the Middle East more generally – is a bad thing for the leisure sector, particularly airlines, for a couple of reasons. First, we’ve seen some flights to popular destinations such as Dubai cancelled because of safety fears.
More pertinently, fuel is a key component of their airlines’ business models because they need to fuel every plane they fly. Hence, higher gas prices mean it’s more expensive to fly, which crimps their (already razor-thin) profit margins.
It’s no surprise, then, that Wizz Air (WIZZ) has climbed from sixth place in October to top of the charts in March. At the start of the conflict in Iran, c. 9% of WIZZ’s shares were being sold short; in the space of three weeks that’s risen to c. 16% - higher than we’ve seen at any point in the past 10 years. The low-cost carrier easyJet (EZJ) also crept into the list, with short positions rising from 0.6% at the start of the war to 6.4% now.
It’s possible that this has also contributed to the rise in WH Smith (SMWH) up our leaderboard (from 13th in October to fourth this month). The firm recently retrenched from its iconic place on UK high streets in favour of its travel division, where it has units at airports and train stations across the country. If fewer people fly or travel by train for whatever reason, its outlook will probably wane.
There remains a prevalence of UK domestically focused businesses on our list, where the short-sellers seem fearful that the current energy crisis will spiral into a resurgence of inflation and crimp consumer spending, sending us into a recession.
Greggs (GRG), the seller of low-cost pastries and sandwiches, has been under pressure for a while and climbed from eighth to second, while the brickmaker Ibstock jumped from tenth to third.
New entrants to the list also fit the bill, including the used car marketplace Auto Trader (AUTO), the discount supermarket B&M (BME), and the magazine publisher Future (FUTR).
One interesting new entrant this month has been Land Securities (LAND), which owns a portfolio of commercial properties including offices, shopping centres and leisure parks.
Despite the KTI team having noted a growing number of UK equity income portfolio managers starting to take positions in real estate investment trusts (REITs) with a plethora of long-term structural drivers for the sector remaining in place, LAND seems to be bucking that trend.
LAND owns Cardinal Place in London’s Victoria, which hosts offices and shops, Kent’s Bluewater and Liverpool’s Liverpool One shopping centres, Brighton Marina, and Salford’s MediaCity complex, which hosts BBC studios.
Still, many remain cautious on offices thanks to home-working arrangements remaining largely in place as well as the risk of artificial intelligence displacing jobs. It’s also possible that LAND’s decision to establish a residential retail business may not have been well-received, while the potential for rising interest rates thanks to the Middle East conflict is also a concern because property, as a high-yielding asset, is sensitive to bond yields.
Shorting is typically the domain of hedge funds. The process is that the shorter will borrow shares of a particular company from a stockbroker or an investment bank, then sell those shares at the current share price. If the share price falls as they expect, they can then buy the shares back at a lower price, return the shares they borrowed back to their original owner and pocket the difference.
As a worked example, let’s say you borrow 10,000 shares in a company whose share price is £1. You sell those for £10,000 and the share price then falls to 50p. You can buy shares in the open market for £5,000 and return them to whoever you borrowed them for and you have a £5,000 profit, minus the fee you paid to loan the shares and other trading costs.
The risk, of course, is that the share price actually rises. If the share price goes to £2, you’ll spend £20,000 buying them back, giving you a loss of £10,000.
Indeed, the biggest risk involved in short-selling is that your losses can be potentially unlimited: when going long, the most you can lose is 100% of your capital, but share prices can theoretically rise to infinity. Say the share price in our example went to £10, you’d then be facing a loss of £90,000. In percentage terms, that’s a 900% loss.
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]]>BlackRock Throgmorton’s (THRG) combination with BRSC offers a number of clear advantages. The most notable is scale, with the greater size of the combined vehicle providing better liquidity for shareholders. In addition, it will provide economies of scale that should lead to lower charges, a benefit further aided by a reduction in the management fees from BlackRock, as well as a six-month fee waiver. The larger size and more attractive fee structure could also put the trust on the radar of more institutional investors too, which may help with narrowing the discount of the combined vehicle.
A larger size should also give the trust greater protection from the threat of activism. Both trusts have been targets of the activist Saba Capital, although only BRSC had previously struck a deal with the investor . The combination process includes a tender offer which may provide Saba with the opportunity to exit. In addition, Saba has agreed not to target the combined vehicle again until 2030. Going forward, the larger asset base will make the task of building an influential position in the trust considerably more difficult.
Both trusts will have a tender or cash exit opportunity as part of the transaction. THRG will tender for up to 38% of the share capital of the trust. Shareholders can tender some or all of their shares at a price of NAV less costs (c. 1%) and will receive a basic entitlement of 38% and, to the extent that other shareholders do not tender their shares, will receive any excess. However, it should be noted that the price achieved by electing shareholders will only be known once the value of the cash pool has been realised. Due to the limited liquidity in these markets, it is expected this will take approximately eight weeks but may take longer depending on prevailing market conditions. In addition, a new triennial conditional tender offer will be introduction, allowing investors to redeem up to 100% of their holding should the managers fail to beat the benchmark. Even if both pre-transaction tender offers are fully subscribed, the combined vehicle will have assets of c. £780m.
With considerable overlap between the two vehicles, around 75% of assets at the time of the announcement, there is clear continuity of approach. Both managers work on the same desk within BlackRock and have a similar investment approach of identifying companies with quality growth characteristics. Should the combination receive shareholder approval, BRSC will be the largest growth focussed trust in the AIC UK Smaller Companies sector. One difference between the two strategies is that Dan has the ability to short stocks within THRG to potentially benefit from falling prices, although this ability is not being carried over. However, the managers will maintain the ability to invest up to 15% in overseas equities with the new vehicle, as was possible with THRG, potentially offering diversification benefits, as well as accessing industries and niches underserved by the UK market.
There have been limited changes to the THRG portfolio in the past few months as Dan notes the valuations of his holdings, and in the UK smaller companies sector more generally, remain very attractive. As such, he has not sold many holdings as he believes their share prices do not reflect the underlying fundamentals and continue to offer compelling value. One reason for these depressed valuations has been the repeated headwinds UK smaller companies have faced over the past few years, leading to outflows from the asset class, and a fall in valuations. The impact has been particularly notable for growth-orientated investment strategies such as THRG. Dan points to the elevated levels of M&A from both corporates and private equity as a demonstration of this value.
In THRG’s latest annual results, for the period ending 30/11/2025, the manager delivered a total return of 0.7% in NAV terms, with the share price rising by 6.5%. This compares to the trust’s benchmark, the Deutsche Numis Smaller Companies plus AIM (excluding Investment Companies) Index, which returned 10.1%. The year itself was characterised by a number of challenges, ranging from the Liberation Day tariff regime to rotations with the tech sector. To that extent, Dan has described it as one of the most challenging years of his career.
He notes the performance of the UK market was driven by a highly concentrated number of shares, clustered around certain themes including resources and value financials, typically not sectors with many quality, growth-orientated companies that Dan invests in. This style tilt has been the primary driver of relative performance versus the benchmark. Despite this, the underlying fundamentals of many holdings have continued to perform well, although this hasn’t been reflected in share price performance. Arguably, this means there is considerable upside potential in the portfolio, should market sentiment switch.
Another factor impacting the sector has been M&A as a result of the low valuations seen across the market. THRG had one holding bid for in its annual report, Alpha Group, which was the biggest contributor to performance in the period. However, quality growth companies are not typical M&A targets meaning the elevated levels of activity had more of a benefit for peers and the index than for THRG. The trust also benefited from a holding in defence company Chemring, which has beaten earnings expectations as spending in the wider sector has increased.
Whilst there have been several strong periods for the trust over the longer term, the short-term headwinds have now impacted cumulative returns over the past five years, with THRG having detracted 6.2% to 13/03/2026 in NAV terms, versus a benchmark return of 2.1%, as we have shown in the chart below.
We believe the proposed combination of THRG into BRSC is a pragmatic step for both trusts amid the ongoing challenges faced by the UK smaller companies sector over the medium term. The UK market has struggled as concerns over inflation and the subsequent high interest rates, the global tariff threat and political instability have all knocked confidence. This has led to depressed valuations in the sector, as well as weaker ratings for the investment trusts focussed on it.
Through THRG’s combination with BRSC, the new trust offers much better scale and liquidity, which could widen the potential investor base of the trust and help narrow the discount. The combined trust is likely to be the largest growth-focussed vehicle in the peer group and therefore may be seen as a go-to option for investors looking for this specific exposure, in our view. The transaction is also expected to remove the activist threat from Saba Capital too, which we believe removes one further question mark over its future.
In addition, the lower charges being introduced as part of the transaction help increase the appeal of the trust, as will the new triennial conditional tender being introduced post-transaction. This will provide a semi-regular opportunity for shareholders to redeem their investment should the trust not return to the outperformance that had been a feature over several periods. This helps keep the discount closer to NAV than has been the case recently, something that may well be aided by the scale and the ability of the board to authorise share buybacks as liquidity concerns over shrinking the trust will be less of an issue.
Even though the larger UK market saw a return to form in 2025, the struggles of smaller companies persisted. This has led to an unusual scenario whereby several quality companies held within THRG have delivered solid operational performance and yet seen their share prices de-rate. This is not only illogical but arguably unsustainable and has led to a compelling valuation opportunity. Should this style headwind fade, we believe the strategy is well placed to capitalise and outperform, supported by both Dan Whitehouse and Roland Arnold’s long-term track records in identifying successful growth companies.
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