Odyssean investment trust has gained 0.9pc in the three weeks since we tipped it. This is despite the fact that it is more exposed to swings in sentiment than most as it invests in smaller companies, always the first to be sold when investors take fright over wider developments in the stock market or the economy. We retain our faith in the manager, Stuart Widdowson, whose skill has been reflected not least in the number of bids his holdings have attracted.
Our worst trust performer in the first half was CQS Natural Resources Growth & Income; we tipped it in April and the share price has fallen by 21.7pc since. This decline can be attributed to a turn in the commodities market as a whole, which, after a strong few months driven by the war in Ukraine and the inflationary environment, suffered a swift reverse that has taken prices more or less back to where they were. before Russia’s invasion.
Questor’s view is that commodities are a good place to be while inflation is so high, as they have offered protection in the past. The CQS trust invests in small and medium-sized miners and energy stocks and seeks exposure to resources that are required for electric vehicles and low carbon energy generation and storage. This strikes us as a canny strategy for the longer term too.
The other two fallers suffered only minor damage. Shares in International Public Partnerships, which invests in infrastructure assets such as gas pipelines, sewers and trains, have failed by 3.6pc since our tip in May. Our case for the trust – that its assets produce dependable, inflation-linked income – is unchanged; the modest sell-off in the shares may have more to do with the trust’s premium to the value of its assets.
We said when we tipped it that a premium in double digits would normally cause us to hesitate, as the premium does expose the shares to greater risk should sentiment change. However, the strength of its income credentials in our view overcomes this concern.
Our final faller is Personal Assets. As we might expect for a portfolio dedicated to the preservation of capital, the fall since our tip last month is barely significant at 0.9pc. The trust remains an obvious choice for any investor who seeks long-term growth without too many bumps along the way.
The shares currently trade at about £500, a figure high enough to make investing awkward for some. The board has therefore proposed a share split, which will see each existing share replaced by 100 new ones and the share price falls to about 500p. Shareholders will be asked to approve the split at the forthcoming annual meeting.
Investment trust news
The merger between LXi Reit and Secure Income Reit has been approved by shareholders and the court and trading in the latter’s shares was due to cease this morning; they will be replaced by shares in LXi.
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