Last year was a challenging one for Real Estate Investment Trusts, with rising interest rates and the prospect of a recession casting a shadow over the whole sector.
It has been a year to forget for the global small cap investment trust Edinburgh Worldwide, whose growth-oriented portfolio saw its NAV drop 40.3% in its annual accounts to the end of October.
It has been a tough period for the country’s biggest investment trust whose growth-oriented portfolio has been hit hard by the sharp increase in interest rates.
Investment trust discounts widened considerably in 2022, finishing the year at an average of 13%, a level that has not been seen on a consistent basis since the global financial crisis of 2007/08.
Last year was a difficult one for investors with most asset classes losing ground over the course of the 12 months. This was reflected in the performance of the various investment trusts with only the mining and global equity income sectors making a positive overall return.
It has been six months since Mike Seidenberg took over from Walter Price as lead manager of the £934m Allianz Technology, which has given him the necessary time to put his own personal stamp on the portfolio.
Last year was a difficult one for bonds with the sharp rise in interest rates making their fixed coupons less attractive and forcing the valuations lower. With the rate hiking cycle nearing an end, many think that 2023 could be a vintage year for fixed income.
It has been an annus horribilis for UK micro-cap stocks and the trusts that invest in them, with two results announcements last week showing just how bad things have been.
Nick Sudbury considers the prospects of this fund after its shaken up its portfolio in recent months.
No prizes for guessing that it will be interest rates and inflation that will be the key drivers of the markets in the next 12 months.
