I have friends, yes really, that take an interest in their investments and if the performance is unsatisfactory they kick ass. That’s not my style. I await events.
I have been rewarded twice. Baillie Gifford brought in a new manager for Monks and he turned it round. I could tell you it is up 58% over three years or to be fair only up 13% over five years. Caveat emptor a fund manager can almost always select a flattering time frame. Likewise RIT, with a sensible woman at the helm is quietly changing the news. Up 6.75% over five years. Neither of these investment trusts are trying to light up the sky but they do maintain capital value and dividends.
Now there’s a new dog; the much-loved McInroy & Wood. You only have to hear “much loved” in Shakespeare to know the character has something nasty coming round the corner. Well the M & W performance has been less than stellar, leading to some pointless kicking of ass. I knew Victor Wood quite well a quarter of a century ago. He was hopeless at catching salmon but his investment strategy filled me with confidence. However, I worried about the succession and got to know his son, Tim, who was another safe pair of hands.
If I may digress, when I was a Name at Lloyd’s I was on quite a good syndicate that went into reverse. The explanation was that the underwriter was spending too much time away from “the box” and leafing through catalogues for expensive cars. I fear Tim Wood may be doing likewise. Three year annual return 3.2% and five years the same. A fund 30% invested in bonds will never compare favourably with funds managed by Nick Train and Terry Smith. Lindsell Train has lost a spectacular 55.7% in the last five years; Fundsmith Equity has done better but underperformed.
First, the returns depend on what’s in the fund. More bonds and even a smattering of gold; less risk and lower returns. Secondly, a reliable fund manager who will not go crazy to earn a big bonus and who at most only owns a few token shares. Hannah Rothschild and Tim Wood are heavily invested in their funds. She has shaken up RIT and I expect something similar at M % W.
I have not mentioned perennial favourite, Personal Assets, because it is doing just fine. Lots of bonds and gold – up 20% over five years. Please, please don’t be seduced by star fund managers who burn out and crash to earth.
Scottish Mortgage has never let me down.
Scottish Mortgage has to be watched, but it’s relatively easy to judge its mood. It’s done well for me but I’ve had to be nimble once or twice to get out before jumping back in.
Dear Christopher, please can you put me in touch with Brue? I’m driving past Barmeath in a few weeks and would love to pop in and see Granny.
Yours, Lucy
I am not nimble with investments, or come to think of it, anything else. I kept the faith with SM when it fell from £15 to about £5 and now am happy it is £12 – up 800 % for me and you I hope but down 5% in the last five years. Perhaps more importantly for old folk like us, the dividend is on an upward trajectory and really that’s what matters.