- An unusual breed of equity income fund comes to the fore
- A high risk/reward biotech play moves into value territory
- Several names in this report stand out for flexibility, balance - and caution
Another month, another sea of red for the kind of portfolio that has sailed through many of the past few years unscathed. Recent weeks have in many cases added to the woes of the tech majors, sinking the MSCI World Growth index into a technical bear market versus a November peak. On the other side of the coin, government bonds just kept selling off, with US Treasury yields touching 3 per cent for the first time since late 2018 as we entered a new month.
With interest rates still on the march upward and inflation continuing to haunt markets, the same questions continue to bother us: what, if anything, will offer investors protection right now? Can those few portfolio winners maintain their momentum for much longer? And what, if anything, represents a bargain for those brave souls with a long view?
In an indication of just how uncertain things look, our latest report throws up all manner of different portfolios that might answer a few of those questions. This includes a few unconventional offerings, from income funds that have successfully taken a total return approach to a biotech play and a US smaller companies fund.
Interestingly, although the Alpha Investment Trust report methodology came quite badly unstuck as the market regime shifted, the more recent portfolios have started to outperform. The impact of discount widening as some themes sold off is particularly evident in the 10 trust portfolio from September 2021, which is down by more than a fifth. Portfolios since the turn of the year, however, looked better suited for an inflationary environment and have done well versus benchmarks.