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Investment trust portfolios: Continuing to rebalance

John Baron explains portfolio changes during the first quarter
Investment trust portfolios: Continuing to rebalance

Changes during the first quarter (Q1) essentially continued to pursue two related themes – reducing the extent of the portfolios’ overweight position in ‘growth’ companies vis-à-vis ‘value’ and increasing exposure to investments that should better protect them from rising inflation. They are related because governments are intent on fostering a strong economic recovery.

Key themes

The changes in the Q1 picked up where Q4 left off – that of rebalancing somewhat the extent of the portfolios’ overweight position in ‘growth’ companies, given the disparity in valuations and the economic backdrop. The portfolios continue to pursue a growth mandate for reasons highlighted in a previous column (‘Remaining focused on the long term’, 7 August 2020). There is no shortage of entrepreneurial managements and companies that are embracing both existing and emerging trends and technologies. These will continue to provide plentiful opportunities for the patient investor.

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