Interactive Investor

Funds and trusts four professionals are buying and selling: Q2 2024

Four fund buyers share their most recent buys and sells, and offer their outlook for the months ahead.

15th April 2024 12:03

by Lucy Loewenberg from interactive investor

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Inflation is on a downward trend across many economies,but global events continue to haunt equity markets. And yet, there are opportunities to be found. As always, our investors have a range of views on how to position themselves in the current economic environment.

Every quarter, our multi-manager panel participants reveal their current bull and bear points. They discuss the new funds and investment trusts they have purchased, those they have increased their holdings in and the ones they have trimmed or sold.

Peter Hewitt, fund manager of CT Global Managed Portfolio Trust

Reason to be bullish: as we move through 2024, a recession in the UK is becoming less likely. Although growth is not as strong as in the US, all the indications are that the economy has bottomed.

Meanwhile, inflation continues on its downwards path and will approach the 2% target level set by the Bank of England over the summer; that clears the way for an interest rate cut, which is positive for equity markets.

Reason to be bearish: if central banks signalled that economies were starting to experience growth at too robust a level (particularly in the US), such that interest rate reductions were taken off the agenda for fear of inflation re-igniting, then financial markets would be disappointed.


Hewitt has bought Augmentum Fintech Ord (LSE:AUGM), which has a unique mandate among private equity trusts, focused on European fintech companies seeking to disrupt the business models of traditional banking and financial services companies. “The management team have deep resources and are highly experienced,” he says.

Although investment in early stage companies is not always a smooth ride, Hewitt argues the larger holdings in the trust are all performing very strongly. Moreover, the balance sheet is conservatively managed with 15% net cash to assist financing current holdings growth plans.

The net asset value (NAV) has proved resilient over the last two years and is well set for growth over the medium term. The shares trade on a 36% discount to the NAV (all discount data to 12 April).


He has increased his position in Scottish Mortgage (LSE:SMT). The last two and a quarter years have not been good for the FTSE 100 listed investment trust. Against a background of rising inflation and interest rates, many of its growth-focused holdings endured a significant compression in valuations. The NAV fell sharply, and the discount moved out to over 20%.

“However, valuations have stabilised, and the underlying growth of many portfolio holdings is coming through strongly,” says Hewitt. “The 26% held in private companies, which are conservatively valued, looks set to recover and with the possibility of one or more of the major holdings seeking to list on the stock market, prospects for Scottish Mortgage have materially improved.”

Add in Scottish Mortgage’s plan over the next two years to buy back £1 billion of its own shares and an activist shareholder and there is every chance the shares will perform. Since the share buyback plan was announced last month, the global trust’s discount has narrowed from -15% to -8.5%.


Hewitt has sold Ruffer Investment Company Ord (LSE:RICA), which has endured a difficult past 12 months with a double-digit share price decline. This, he says, “is not good for a trust whose key objective is to protect shareholder wealth and not lose value”.

Holdings in long dated index-linked bonds and selling down holdings in Japanese equities too early did not help, Hewitt points out, “nor did their credit and derivative strategies, which are difficult to understand and add volatility”.

The shares have lost their premium rating and moved to a discount of over -6%.

Simon Evan-Cook, multi-asset, fund-of-funds manager at Downing

Reason to be bullish: economic growth in most regions seems stubbornly strong, while equity valuations outside mega-caps are attractive. These are good reasons to think that well-run active equity funds can make high, long-term returns from here.

Reason to be bearish: many central banks prioritise crushing inflation over not crushing the economy, so there’s a risk they’ve overdone the interest rate rises. Also, many of the large-caps that dominate passive funds (index funds and exchange-traded funds, or ETFs) look expensive, which raises the risk of a painful de-rating.


Evan-Cook recently purchased a new fund launch: HC Cadira Sustainable Japan Equity.The manager has a great track record built at a larger firm but has left for the freedom of running a portfolio from his own boutique,” he says.

Evan-Cook appreciates the fund’s process which focuses on finding high-quality, well governed companies that will benefit from the compounding effects of continued growth of profits.

We’re particularly happy to add to Japan at the current time because the valuations are generally attractive, while there are market reforms under way that seem to be unlocking goodreturns for investors,” he says.


He recently topped up his holding in VT Castlebay UK Equity. We don’t move money around too much, but if we do it’s usually because we’re drawn to good corporate fundamentals and attractive valuations,” he says.

Given that the UK has been out of favour for years now, he argues that “there are plenty of decent companies available at bargain-bucket prices.

This fund’s focus on finding the market’s highest-quality companies, but not overpaying for them, feels like a sensible way to access this market.


Evan-Cook trimmed his exposure to a money market fund. This was to make way for some longer-duration gilt exposure.

We think the combination of restored yields, as well as the potential to rise in an equity sell-off, makes longer duration bonds a better place to hold some of our non-equity weighting, as the cushioning effect of that would prove helpful to our investors in times of stress,” says Evan-Cook.

Vincent Ropers, co-manager of IFSL Wise Multi-Asset Growth and IFSL Wise Multi-Asset Income

Reason to be bullish: with growth continuing to perform better than previously anticipated, a soft landing is now the prevailing scenario priced into financial markets. Central banks are also increasingly hinting at upcoming interest rate cuts, which is fuelling positive sentiment.

Reason to be bearish: one can wonder, however, how sustainable growth really is and if a recession has merely been delayed as opposed to avoided. With inflation staying sticky, there are also question marks about central banks’ true readiness to cut rates at all. Valuations in parts of the market do not offer much protection any longer, so shocks are still very much a possibility.  

Nothing bought

Ropers has not added any new position to his funds in the past three months. He continues to believe that now is a time to concentrate on positions he knows well and has full confidence in, given the very attractive valuations his holdings present. The investment trusts sector, despite some normalisation since last October, offers tremendous opportunities as a result of extreme pessimism and forced selling. He says: “Now is a time to show patience for valuations to start reflecting fundamentals again.


As interest rate expectations are starting to reset, Ropers took advantage of wider discounts to increase his core infrastructure holdings, HICL Infrastructure PLC Ord (LSE:HICL) and International Public Partnerships Ord (LSE:INPP), at attractive levels. We believe that the yields of more than 6% those trusts offer for portfolios of defensive, critical infrastructure are now of interest,” he says.

He points out that this is particularly true since, in the case of HICL, it announced disposals of assets at a premium to carrying value, not only validating its valuation but also allowing it to repay debt and start a share buyback program.


Ropers has exited his position in the BlackRock Frontiers (LSE:BRFI) trust after a strong return of almost 20% since its October 2023 low. He says the trust’s performance, as well as longer term, has been particularly pleasing in what has been a challenging environment for large emerging markets, mainly because of China, so this trust offered a welcome counterbalance via its investments in small frontiers markets.

Investing is always a trade-off and, with opportunities in other areas such as infrastructure or healthcare presenting more upside from here in our mind, the position was sold to finance top-ups elsewhere in the portfolios,” says Ropers.

Tihana Ibrahimpasic, portfolio manager, multi-asset team at Janus Henderson Investors

Reason to be bullish: there are continued expectations for a number of interest rate cuts by major central banks in 2024, aimed at reducing the impact of higher rates on those who will need to begin refinancing debt issued at previously lower borrowing costs. If central banks are able to continue to keep economies on this narrow track between weakening growth and a rebound in inflation, it could be good in the medium term for risk assets.

Reason to be bearish: however, with valuations no longer seeming cheap in many areas, and outright expensive in others, investors will likely need to continue to see confirmation of strong earnings growth to keep pushing markets higher in the near term.


On some of her strategies, she opened a position in Janus Henderson Pan European Smaller Companies fund. Ibrahimpasic argues that this asset class continues to look set up for outperformance, given a more likely strengthening of global growth. She says: “An expected upturn in the manufacturing cycle should be supportive.”

She says that the fund has had a very good long-term performance, benefits from one of the most experienced teams and stylistically gives her a blend of value and growth names in the portfolio.


On a specific strategy, she has added to the private equity names – namely theHgCapital Trust Ord (LSE:HGT) and HarbourVest Global Private Equity Ord (LSE:HVPE). The intention is to diversify assets compared to public equity exposure, at attractive valuations”, she says.


Ibrahimpasic has trimmed her position in FSSA All China fund, as part of the decision to take some profits after a brief rally. She says:“Notwithstanding potentially attractive valuation, the outlook for China remains uncertain from the asset allocation perspective and presently we would rather keep a broad emerging market exposure.

The four multi-manager panellists

Peter Hewitt is fund manager of the CT Global Managed Portfolio Growth and CT Global Managed Portfolio Income Ord, where he specialises in investment trusts.

Vincent Ropers is a portfolio manager at Wise Funds, responsible for multi-asset strategies, using value and fundamental investment styles. He is co-manager of IFSL Wise Multi-Asset Growth and IFSL Wise Multi-Asset Income.

Tihana Ibrahimpasic is a portfolio manager on the multi-asset team at Janus Henderson Investors. Prior to taking on this role in 2021 she was a research analyst in the team from 2018.

Simon Evan-Cook is a multi-asset, fund-of-funds manager with over 25 years’ experience in the investment industry. He joined Downing in 2022 to set up and manage the Downing Fox range of funds.

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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