We did, however, enjoy a rare dose of cultural schadenfreude when Kanye West was blocked from entering the UK for the Wireless Festival, provoking equal amounts of outrage and quiet relief, depending on your postcode. It’s a pity our vetting procedures aren’t always quite so discriminating.
After a bruising March, markets restored some order in April. The S&P 500 had the better of it, bouncing 10% to another record high, with the FTSE 100 treading water but keeping its nose above the 10,000 mark.
The Magnificent Seven posted a record quarter, with their aggregative market cap hitting a $22 trillion record high on the back of a 60% rise in combined after-tax profit (with NVIDIA yet to report). But dig underneath the headline numbers and free cash flow is shrinking, buybacks are being wound down and three of the seven are still in the red for 2026.
So, which shares and funds were UK investors slipping into their Easter baskets in April?
These were the most (and least) popular shares with UK retail investors on three of the largest investment platforms last month:
Buying the Magnificent dip
Five of the Magnificent Seven made April's buy list, with Apple and Meta the only absentees. All seven finished March in the red but April proved better business.
Microsoft (MSFT) was arguably the standout opportunity, down more than 20% year-to-date heading into April after markets fretted about AI cannibalising its core software business. Those who bought the dip were richly rewarded with a 10% gain in April after above-expectation Q3 results. That said, its OpenAI tie-up faces stiff competition from the likes of Claude and Gemini, with soaring spending posing a growing headache.
NVIDIA (NVID) played both sides of the trade, with investors seemingly unable to agree on whether the 10% year-to-date share price increase is a bargain or a sign of leaner times to come. It chalked up a 14% rise in April, smashing through the $5 trillion mark in the process, but can it keep up the momentum?
Its 90%-plus share of the GPU market certainly remains an impressively wide moat and its proprietary software ecosystem CUDA makes it genuinely difficult for AI developers to walk away, regardless of the alternatives. On the bear side of the equation, Meta, Microsoft and Alphabet could feasibly flip from customer to competitor if their rival chip development bears fruit.
Elsewhere, shareholders in Tesla (TSLA) are keeping the faith that it’s not just a car manufacturer given the pricing pressure on the EV front. In fairness, there’s fingers in a lot of pies from humanoid robots to robotaxis, not to mention that all-important stake in SpaceX, but the share price has continued to go into reverse (for now at least).
Investors jumped on a late-April dip to add BAE Systems (BA.), with record sales, a healthy order pipeline and a key role in the Australia-UK-US security alliance all supporting the investment case. The question is how much of that is already in the price after a 370%-plus return over the last five years and a valuation that sits towards the upper end of its peer group.
Rolls-Royce (RR.) is in a similar boat after a reassuring April trading update. But the share price has done a lot of the heavy lifting since CEO Tufan Erginbilgic took over and a prolonged conflict could yet weigh on flying hours and civil aerospace revenues. Perhaps not entirely surprising that some investors have decided to come back to earth after its mammoth 1,100% five-year return.
Taylor Wimpey's (TW.) appearance on the buy list looks rather more brave in hindsight. A late April update revealed falling prices, rising input costs and a decision to cut land purchases, with its share price sliding to its lowest since the days of George Osborne as Chancellor. Investors may be effectively paying 70 pence in the pound for assets at current valuations but with moribund demand and rate cuts possibly heading into reverse, today’s bargain can be tomorrow’s value trap.
L&G (LGEN) rounds out the group, offering an eye-catching dividend yield of almost 9%, though its earnings forecasts aren’t exactly setting the world on fire.
The Iran conflict sent oil prices surging and investors duly cashed in, pressing the sell button on BP (BP.) and Shell (SHEL). Good business given their one-year gains of 72% and 39% respectively, with BP the more exposed to a dip in oil prices.
Clean energy plays ITM Power (ITM) and Ceres Power (CWR) have delivered extraordinary gains of 440% and 1,100% respectively over the last year. With neither company yet profitable at scale, investors seem to have decided the easy gains have been made.
Scottish Mortgage (SMT) made it fifteen months at the top - as with Wet Wet Wet's vicelike grip on the charts for an interminable summer, it seems that Love is (Still) All Around for the UK's second-largest investment trust. It also tops the AIC Global Sector on one-year returns, with an impressive 55% return against 33% for the sector as a whole, with all eyes very much on the rumoured IPO of SMT's largest holding, SpaceX.
With Artemis II orbiting the moon and SpaceX chatter reaching fever pitch, it seems we’ve all gone a bit space mad, with investors also pressing the buy button on Seraphim Space (SSIT). It’s been a bumpy ride but the trust has delivered a meteoric 260%-plus return from its portfolio of space tech companies and is riding the wave a little longer by offering a £350 million share issuance.
Templeton Emerging Markets (TEM) has also had a strong run, notching up 74% over the last year. Its quality-focused strategy spans both growth and value, and offers an interesting alternative for investors wanting AI exposure beyond the priced-for-perfection US names.
Otherwise it was business as usual, with Temple Bar (TMPL), JPMorgan Global Growth & Income (JGGI) and City of London (CTY) continuing to find favour with investors.
There's plenty on the cards for May. Nvidia reports first-quarter earnings on the 20th with investors hoping for a perkier reaction than last quarter, when the shares fell almost 10% despite forecast-beating numbers. Export restrictions to China, the Blackwell ramp-up and DeepSeek's challenge in data centre GPUs will certainly give the market plenty to chew on.
Markets may have priced in the Iran conflict as yet another new normal but tightening supplies are continuing to bite. And while the Bank of England may have held rates at its last meeting, the direction of travel may be up rather than down, with inflation potentially rising as high as 6% in 2027.
And for early-bird investors looking to make a dent in this year’s allowances, we’ve produced guides to our pick of the best ISA platforms and best SIPP providers to help you find the right home for your money.
All data as at 06/05/2026 unless stated otherwise, returns based on share price total returns.
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]]>Following on from our trip to Europe earlier this year, Alan and I return once more, armed with a format that has struck a chord with our readers. Less formal and more conversational than our usual style, but an effective way of genuinely getting to grips with a topic. This time round, we are turning our attention to the world of renewables, a sector that has grown rapidly but one that has become increasingly complex and, at times, difficult to navigate for those not immersed on a day-to-day basis. As with our trip to Europe, Alan takes the role of the tour guide, and I play the curious tourist, asking the obvious, the overlooked and, occasionally, the uncomfortable questions.
]]>Whilst Pacific Assets (PAC) has faced its own challenges in the period, wider Asian markets have delivered on their promise in the year under review with a strong rally. The region’s supportive demographics, exciting growth prospects and numerous world leading companies has attracted investor capital, particularly in key sectors such as semiconductors. This is a theme PAC’s manager had identified, as shown by holdings in the likes of TSMC and Samsung Electronics, although limited position sizes in these holdings meant relative returns were impacted. Regardless, the Asian story continues to be well-supported in our view, with many countries offering a blend of good growth characteristics and attractive valuations.
Prior to the broader review, the board had introduced several strategic initiatives in the year to improve the trust’s investment case, including a conditional tender offer and reduction in the management fee, something discussed in the half-year results. With these remaining in place, we believe the discount risk remains reduced. Evidence supporting this is the consistency of the discount since the pause in share buybacks in December to date, having narrowed notably up until this point.
Furthermore, the outcome of the strategic review could lead to a narrowing of the discount. Markets disliking uncertainty is a well-worn adage, therefore regardless of the outcome, it would at least bring certainty. This could be in the form of a management continuation, a switch to a new team, or even a combination with a peer, each of which offers plausible scenarios in which the trust’s rating could narrow. Whatever the outcome, the Asian region still has a vast universe of attractive companies to choose from, which lends itself well to active management. With the board having received numerous proposals, whichever direction the trust’s future goes, the long-term potential for the trust to capture alpha going forward is strong.
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]]>The bill builds on the Mansion House Accord where some of the UK’s largest pension funds agreed to voluntarily increase their weighting to private assets to 10%, half of which will be directed to UK-based projects.
Initially, listed securities, including investment companies, were excluded from the bill; after successful lobbying from the Association of Investment Companies (AIC), with support from Baronesses Altmann and Bowles, investment companies have now been included.
The bill gives the government a so-called reserve power, which would allow ministers to compel funds to meet these targets if they fall short. However, the government agreed that the mandation power would only be used once, must be used before 2032, and apply only to main default pension funds, after pressure from peers in the House of Lords.
The bill has yet to gain Royal Assent, so we’re still in the very early stages, hence details as to exactly which assets will be in scope and, therefore, which investment trusts might benefit are scant. As such, it’s not expected to have a huge immediate impact on the investment trust world.
Still, we agree with AIC CEO Richard Stone when he suggested that it will give pension schemes more confidence to add investment trusts to their investable universe.
Unlocking a potential billion-pound pool of cash sitting and waiting to invest in investment trusts may act as a powerful catalyst for narrowing discounts in related sectors. Sure, those wide discounts may give some trustees pause, but, in our view, they represent some of the most attractive valuation opportunities in UK markets.
Of all the possible outcomes, we suspect that the most obvious beneficiary will be infrastructure projects. The government will be keen to improve swathes of the country’s ailing stock, from roads to hospitals to schools.
This could all play into the hands of a trust like HICL Infrastructure (HICL), which has a 63% weighting to UK assets. These include Affinity Water, which supplies drinking water to 3.8m people in London and around the south-east of England; the A63 motorway, the Home Office building and the Royal School of Military Engineering. Diversification is added through a 23% exposure to Europe, alongside top 10 positions in the US-based power grid business Texas Nevada Transmission and New Zealand mobile towers business Fortysouth.
We’re sure that HICL will strike a tone with pension trustees, given it’s a FTSE 250 trust with a £3.3bn portfolio. Another attraction is HICL’s aim to offer a core, lower-risk infrastructure investor targeting long-term NAV returns of 7-8% through a combination of a high dividend yield – currently 6.6% - and the potential for capital growth. A discount of c. 19% isn’t egregious, but represents attractive value, in our view, particularly when you consider that HICL’s board and manager have undertaken disposals totalling over £730m in the last couple of years, which have all been at or above the most recent valuation prior to sale, indicating that the NAV is robust.
While HICL focuses on taking equity in the projects it owns, GCP Infrastructure Investments (GCP) takes a different tack, financing social and economic infrastructure projects through debt instruments. Again, in contrast to HICL, GCP is fully focused on the UK, making the two a potentially attracting pairing for pensions funds.
Just over half of the portfolio is in senior debt and, again, just over half is also in renewable projects (which we’ll come on to shortly). GCP’s portfolio is mature and fully operational, consisting of 47 investments that are highly diverisified across sub-sectors such as commercial and rooftop solar, biomass plants, supported living and waste disposal.
GCP’s returns come primarily through dividends, with the current yield sitting at an attractive c. 9.4%, more than twice the level of the five-year gilt yield, but there’s certainly some potential for the discount to narrow which, at c. 27%, is essentially analogous to buying a bond yielding in excess of 9% with a par value of 100p for 73p.
Surely, too, with the government’s efforts to decarbonise the UK’s economy, will renewable energy infrastructure projects be on the list of ideal private asset investments. The purest play we could think of here would be Greencoat UK Wind (UKW), which, as the name suggests, invests in onshore and offshore wind farms up and down the UK.
Wind is, in our view, key to both the transition to net zero and to ensuring the UK’s energy self-sufficiency. Indeed, the proliferation of energy from renewable sources played into the fact that Britain’s electricity is the most British in over 20 years, according to the Energy and Climate Intelligence Unit.
UKW is another large and liquid trust, with a c. £4bn portfolio – a big advantage in this context – and remains a leader in the sector. UKW’s share price remains in the doldrums for now, with the ongoing sell-off initially sparked by 2022’s rising interest rate environment and compounded by weak sentiment and some negative government announcements.
Yet, if one looks forward, we see signs of life for UKW. It wouldn’t surprise us if we saw some consolidation in the sector given the current over-supply of trusts in the sector. We’d see this as a positive for UKW as it’s likely to be one of the survivors and would represent an attractive alternative for investors in whichever trusts get taken out.
In addition, UKW’s share price remains, at the time of writing, a shade below its 2013 IPO price, despite the trust having delivered a NAV total return of c. 193% since then. Certainly, a yield of c. 10.4% on a discount of c. 26% and a dividend that is explicitly linked to consumer price inflation strikes us as an attractive proposition.
Private equity and venture capital is a less obvious beneficiary here. While the space is, of course, included in the private assets remit, UK pension funds tend to err on the side of running more cautious portfolios. That said, the increase of defined contribution pensions and auto-enrolment is bringing younger savers into the pension system and these are the exact people that would benefit from their funds looking towards more growth-style investments.
In addition, the private equity space is dominated by the US market. That said, public markets are also skewed towards the other side of the Atlantic and, fortunately, there are some private equity – or growth capital – investment trusts that focus on Europe, with exposure to the UK within that.
On the private equity side of things, CT Private Equity (CTPE) has c. 41% of its portfolio invested in the UK, marking it out as highly differentiated from its listed PE peer group, which typically has less in the UK and significantly more than CTPE’s c. 15% in the US.
While CTPE targets the lower-mid market of the European PE universe, which is typically higher risk, the trust is well diversified across c. 500 underlying companies and management believe that it should be well rewarded over the long term for taking this risk.
CTPE’s two largest individual names are both UK firms, being the casual clothing retailer Weird Fish and the social housing maintenance provider CARDO Group. Management suspects, as do we, that valuations are currently prudent and that experience, over the past 26 years CTPE has been around, suggests that there could be considerable hidden value in the NAV, at which CTPE trades at a c. 30% discount.
Moving into the world of venture capital, Molten Ventures (GROW) is a specialist VC investor owning equity in early-stage, unlisted European businesses both directly and through funds.
The core of the portfolio is a concentrated selection of 16 businesses making up 62% of the NAV and led by the fintech giant Revolut, at 10.6% of the portfolio. Revolut has been a real UK technology success story and has recently been revalued to make it worth more than Barclays, Lloyds or NatWest ahead of an expected 2026 IPO.
GROW has been top-slicing its position in both Revolut as well as the Finnish satellite maker ICEYE, showing management’s success and generating cash. Indeed, GROW generated more than £200m from its portfolio in FY 2025 and through the first six months of 2026, with the fair value of the portfolio being written up by 6% in H1 2026, after a 4% uplift in FY 2025, indicating momentum building after a tough period for VC between 2022 and 2024.
The discount has narrowed significantly from its c. 60% 12 months ago to c. 27% at the time of writing. Still, that’s a fairly meaty discount on a portfolio containing attractive thematic exposures such as space technology, enterprise software, quantum computing and blockchain.
We’ll wait for the finer details to be fleshed out before getting too excited about the potential wall of money that could come into the investment trust sector if pension funds start looking our way. Still, the worst outcome is that it will be net neutral for the sector, with a bullish view that it could really narrow discounts across many sectors that have been hard hit in recent years.
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]]>2025 ended at a tantalising moment, which strongly suggested we were well into a recovery in the fortunes for NB Private Equity Partners (NBPE) and the wider listed private equity peer group. Realisation activity, the lifeblood for sentiment and NAV growth for the LPE sector, was rebounding and discounts to NAV were on a narrowing trend, suggesting a sunny outlook. 2026 has so far seen grey clouds sweep in, dimming prospects both from the perspective of AI disruption within software businesses, but also the macro uncertainty caused by the US’ “special military operation” in Iran. As a result, deal volumes have slowed once again, and discounts have widened out. This is likely as frustrating for the Board and managers as it is for investors.
According to the manager, there are signs that like the stock market, the shocks of Q1 are being worked through in the private equity market and activity is starting to pick up again after a slow Q1. The underlying portfolio performance is proving resilient, and in our view it is encouraging that the biggest exposures within the portfolio (the top 10) have performed the best, driving NAV performance. We are also encouraged by the board delivering on their promises, with 2025 having seen a significant acceleration of share buybacks. In addition, NBPE pays a consistent semi-annual dividend which yields 5.3% at the current price. Taken together, a capital return of 8% of opening portfolio NAV during the year is a very credible statement of intent from the board. With a mature ‘exit-ready’ portfolio, NBPE should be a beneficiary of renewed realisation activity. At the same time, it has remaining firepower to continue to buy shares back and pay the dividend. That said, given the board have returned 11% of NAV since the start of 2025, unless realisation activity picks up, it is hard to see the board maintaining this pace indefinitely.
We are encouraged that the managers have found attractive investments to make so quickly and keep the portfolio ‘fresh’, and note that two of the committed investments are directly AI related companies, which does something to bring the portfolio into the AI era. We note that 55% of the portfolio was invested in during 2020 and after, which according to the manager, are the fund vintages that have shown the best growth metrics across the industry over 2025. We imagine that older vintages are being held back by the environment.
NBPE’s underlying portfolio is largely invested in three sectors: Industrials/Industrial technology (22%), Tech, Media & Telecom (19%), and Consumer/e-commerce (16%) all of which continue to offer the prospect of good long-term growth. Through its unique 100% co-investment model, NBPE’s managers have full control over investment decisions. The Board and manager has prioritised balance sheet strength over recent years which has allowed the flexibility to continue to return capital to shareholder through the dividend policy and the share buyback program. NBPE is therefore in a strong position to sit tight if needed, and wait for market confidence to improve. Shareholders may continue to see returns of capital through buybacks and dividends, although the full extent of which will be partly determined by realisation activity. Should realisations pick up, if the experience of 2025 is anything to go by, the board might continue their aggressive pace of buybacks – especially if the discount to NAV remains near today’s c. 33%, given buybacks are so accretive at the current level. For investors who share the board and manager’s optimistic view on the portfolio’s underlying prospects, with gearing at 110% and a share price meaningfully below the NAV, NBPE offers a compelling growth opportunity.
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]]>A strong combination of growth, valuation and technical factors support investment in Vietnamese equities. Entering the year, GDP was forecast to grow at 10% in 2026, and in fact delivered 7.8% annualised in the first quarter, a record for Q1. Meanwhile, the market traded at around 11x forward earnings as of 01/04/2026. On the technical side, in September Vietnam will be promoted to emerging market status by FTSE, which Dragon Capital estimate could see $6-8bn cumulative inflows over 12-18 months.
Growth is being driven by strong domestic drivers. Importantly, the political authorities are committed to significant reforms, most notably Resolutions 68 and 79, which aim to boost the contribution of the private sector growth and reform SOEs. Additionally, a massive infrastructure spending programme is creating multiple investment opportunities. Dragon Capital forecasts 18% profit growth for the market in 2026, even after modelling the impact of the war in the gulf. In a stress scenario of $100 a barrel for 9-12 months, the managers only forecast a 0.5-1pp drag on GDP growth and would expect inflation to remain below the 5% policy ceiling.
Weak overseas demand for equities may be behind modest valuations, which means FTSE inclusion in September could be particularly well timed. Additionally, a wave of IPOs expected over the next few years should encourage foreign investors in and create a more diverse and attractive market.
Vietnam Enterprise Investments' (VEIL) portfolio is positioned to benefit from surging domestically-driven growth. Manager Tuan Le Anh has increased the portfolio’s exposure to leading private sector champions following the introduction of Resolution 68, expecting it to facilitate greater private sector investment in large-scale development projects. Additionally, he has added to the brokerage firm SSI in order to benefit from anticipated greater liquidity, the IPO pipeline, and the FTSE upgrade. New positions in the energy sector should benefit from renewed domestic oil production in the light of higher energy prices. Meanwhile the trust remains heavily invested in the banking sector which should benefit from growing demand for loans, and in particular in those with stronger earnings momentum.
VEIL’s discount has narrowed in recent months, but we still regard it as attractive in the light of its growth outlook and the expected further tender offer as well as, over the longer run, a performance-related 100% tender offer. The volatility surrounding the current conflict in the gulf may prove to have been a good opportunity to top up, although we note the local market has already made back most of the losses after the outbreak of the war.
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]]>Which brings us, inevitably, to its mastermind. Love him or loathe him, Elon Musk has an extraordinary talent for making the rest of us feel, well, distinctly average. In 2025 alone he’s treated us to the dubious DOGE chainsaw cosplay, caught a rocket on giant mechanical chopsticks and still found the time to father enough children to crew his own Mars mission. You have to admire the man’s time management skills if nothing else.
Musk may be the last man on earth in need of free publicity but Netflix's Return to Space is a captivating account of SpaceX’s early years. Launching a space startup just as NASA wound down its shuttle programme takes a particular brand of self-belief - or perhaps a pathological inability to read the room. Initial funding stretched to three Falcon 1 launches and all three failed in fairly spectacular fashion.
Fortunately private investors shared both Musk’s vision and deep pockets, with launch number four proving the turning point for a $1.6 billion NASA contract. Almost two decades on, SpaceX has gone on to redefine the space industry, pioneering the reusable rocket at a tenth of the traditional cost and blanketing the globe with the largest satellite constellation in history through Starlink.
Coming back to the IPO, SpaceX has seemingly fired the starting gun but will it land its stratospheric price tag? According to Reuters, a doubling of revenue in 2026 would imply forward price-to-revenue and EBITDA multiples of 56 times and 109 respectively, putting even Palantir and Tesla’s lofty valuations in the shade.
SpaceX also sits in the unusual position of frankly not needing the money. It reportedly posted around $15 billion in revenue last year from its Starlink and NASA contracts, making the potential $75 billion raise a drop in the ocean, though it is at least carving out a generous 30% allocation for retail investors.
Then there's Musk's famously turbulent relationship with regulators, which has already prompted rebukes from the SEC over his public musings on Twitter and Tesla. Private backers may be happy to turn a blind eye to another controversial tweeter-in-chief, but public markets can be considerably less forgiving - as Tesla shareholders can sadly attest.
Still, one only has to watch the Musk vs. Bezos whose-rocket-is-bigger contest to appreciate that billionaires are a breed apart. Any valuation north of $1.7 trillion would put Meta, and by extension Mark Zuckerberg, in the rear-view mirror, with Amazon next in the cross-hairs. It may be no coincidence that Musk recently bulked up SpaceX with the merger of AI startup xAI, which doesn’t seem like a slam dunk on commercial logic alone.
SpaceX isn't the only mega-cap to choose the relative anonymity of private markets. There's a veritable treasure trove of companies that haven't rushed to float, from AI pioneers OpenAI and Anthropic to Stripe and Databricks.
But it wasn't always thus. If you cast your mind back to the public debuts of the Magnificent Seven, Amazon and Apple were less than five years old at IPO, with Microsoft the elder statesman of the group at eleven.
That was great news for early-bird investors chasing the best of the growth spoils but the landscape looks markedly different today. The number of US public companies has halved over the past 25 years, private capital has filled the void and higher interest rates have dampened the incentive to list.
As Lucie Majstrova of Baillie Gifford's private companies team noted in our recent Market Matters podcast, ByteDance (owner of the infernal TikTok) already boasts 50 times the revenue and profits of Facebook at the time of its IPO.
As a result, retail investors are increasingly buying maturity over innovation by the time these private giants eventually come to market. However, help is at hand for investors wanting some pre-IPO growth action, with the investment trust structure offering a ready-made home for more illiquid, private investments.
Seraphim Space (SSIT) offers a one-stop shop for intergalactic purists. Perhaps surprisingly, it doesn't count SpaceX among its top holdings but it does hold a concentrated portfolio of space-based technology companies. It's been a bumpy ride at times though the trust has delivered an eye-catching 260% return over the past year.
Alternatively, Schiehallion (MNTN) casts a wider net across later-stage private companies and counts six of the world's largest among its portfolio, including SpaceX, ByteDance, Wise and Stripe (now public). After a challenging period, it’s also achieved a stellar 130% return over the past year.
Finally, Scottish Mortgage (SMT) straddles both public and private markets, having first invested in SpaceX back in 2018 when the company was valued at less than $40 billion. If SpaceX floats at the numbers currently being bandied about, that would represent a generous 44-fold return.
While SpaceX may be the headline act on the IPO call sheet for 2026, it’s far from alone in the queue. Lurking in the wings are AI labs OpenAI and Anthropic and if SpaceX's valuation looks audacious, these two may require an oxygen mask. Both are growing at a breathtaking pace but they’re also burning through a mountain of cash in the process. And that’s before we factor in the ongoing Musk v Altman court battle over OpenAI’s legitimacy as a for-profit entity. Private market valuations creeping into the $800-plus billion range are starting to feel faintly reminiscent of the dotcom era - and we all know how that ended.
Either way, there’s still options on the private table with ARK Invest recently buying $240 million of OpenAI shares across three active ETFs, marking the first time retail investors can access OpenAI through a publicly traded vehicle. For all things ETF, head over to our sister website Expert Investor.
Will it be to infinity or oblivion and beyond for the SpaceX IPO? Only time will tell but given rocketing valuations, there's a strong case for taking a broader approach to private company exposure rather than waiting for the main event.
All data as at 21/04/2026 unless otherwise specified and based on share price total returns.
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]]>Yet hedge funds can play a crucial role in reducing risk and strengthening the resilience of portfolios. Veteran fund manager Jim Simons summed it up as well as any when he said: “Hedge funds are often misunderstood. They’re not the high-risk monsters many think they are.”
In reality, hedge funds do exactly what it says on the tin: they hedge against downturns in equity and bond markets. In many ways, they can function as a type of insurance policy designed to limit the loss of capital if (or when) stock markets head into the red.
Despite their potential benefits, hedge funds have historically been the sole preserve of sophisticated and institutional investors and, as a result, out of reach for retail investors. However, investment trusts have opened up access for retail investors to professional hedge fund strategies.
It’s certainly been a rollercoaster ride for equity and bond investors in the last year, with markets buffeted by rising inflation, tariff disputes, the AI arms race and geopolitical conflict.
We’re currently in the middle of a bull market that has seen the S&P 500 return more than 15%-plus in US dollar terms for each of the past three calendar years, yet that masks some sharp swings during that time.
Indeed, the S&P 500 fell nearly 6% in a single day in the week following Liberation Day, and more recently the VIX (volatility index) climbing on the war in Iran. The gravy train of the Magnificent Seven also seems to be losing momentum, with concerns over AI spending and stretched valuations weighing on the likes of Microsoft and Meta.
Amid this uncertainty, hedge funds can potentially offer a compelling option for investors looking to shield their portfolios from volatility. By deploying strategies beyond traditional long-only investing, they can provide an added layer of protection in unpredictable markets.
Equities and bonds have historically maintained a largely negative correlation, providing investors with a natural hedge. However, this correlation has turned sharply positive on occasions, such as in 2022, which has reduced the effectiveness of a traditional equity and bond portfolio.
In contrast, hedge funds aim to deliver positive returns in both rising and falling markets by diversifying across a much broader range of asset classes.
One such example is BH Macro (BHMG), which provides access to the Brevan Howard Master Fund, a leading global macro hedge fund. With exposure spanning fixed income, foreign exchange, commodities, credit, equities and digital assets, BH Macro’s NAV offers a low-correlation diversifier for traditional equity and bond portfolios. While share price returns may often broadly move in a similar direction to the NAV, they can differ over the short to medium term, potentially reducing the diversification properties of the trust.
The fund has a strong track record of delivering positive NAV returns when equities decline. This was demonstrated most notably in 2022, when global equities and bonds suffered steep losses while BH Macro delivered an impressive NAV return of more than 20%, demonstrating its effectiveness as a portfolio diversifier.
And this wasn’t an isolated occurrence: since inception, the trust has posted positive monthly NAV per share returns in 17 of the 20 worst-performing months for the S&P 500 Index (and positive share price returns in 14 of these). A prime example occurred during the global financial crisis in October 2008, when BH Macro’s NAV per share rose by 3% compared to a 16% fall in the S&P 500.
It’s worth noting that there have been periods of NAV losses, for example in March 2023 following the black swan event that was the collapse of Silicon Valley Bank. However, thanks to careful risk management and portfolio balancing processes, annual losses have historically been limited to single-digit percentage points.
As Warren Buffett famously advised, “The first rule of investing is to never lose money.” It may be stating the obvious but if an investment falls in value by 50%, it needs to double to return to break-even, with investing often being as much about minimising downside risk as maximising returns.
Risk management sits at the heart of BH Macro’s investment process: traders in the master fund operate under bespoke risk mandates and are overseen by designated risk managers to optimise returns while prioritising capital preservation.
Since inception, BH Macro has delivered positive returns in all but three of the past 18 calendar years in NAV per share terms, with negative returns limited to modest losses of 1-4% after fees.
Overall, the trust has achieved an annualised NAV per share return of 8.5% (to 27/02/2026) and, as the graph below illustrates, has made positive returns in eight of the last ten years, including during the market downturns in 2018 and 2022.
If one thing is certain about 2026, it’s that uncertainty remains a defining theme, from the unpredictable policy landscape of Trump 2.0 to geopolitical conflict, trade disruptions and fluctuating interest rate expectations.
This heightened uncertainty plays to BH Macro’s strengths by creating opportunities around macroeconomic factors such as interest rates, currency movements and inflation. Rate trading forms the foundation of BH Macro’s strategy, but the fund also takes positions across multiple asset classes to generate asymmetric returns where potential gains outweigh potential losses.
This multi-asset, multi-strategy approach creates the potential for BH Macro to remain independent of broad market conditions, reducing the risk of major drawdowns that can affect traditional equity and bond investments.
Looking ahead, uncertainty remains firmly on the menu for investors as they navigate through a volatile geopolitical and macroeconomic backdrop. Diversification is often called the only free lunch in investing and, in this regard, hedge funds can provide an alternative diversifier to traditional equity and bond portfolios.
By combining diversification, risk management and the potential to profit from uncertainty, BH Macro offers investors a hedge against the unexpected, which could prove useful if 2026 continues to serve up more of the same.
All returns are shown in NAV per share in GBP (other than US indices which are shown in US dollars). Data is sourced from FE Analytics unless stated otherwise, as at 08/04/2026. Fund data for BH Macro as at 27/02/2026.
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]]>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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