I love writing about stocks and shares when they are going up. Today I’m biting the bullet. I want to see how my two favourite safety plays are faring in today’s challenging conditions.
McInroy & Wood Balanced Fund and Personal Assets Trust aim to preserve investors’ capital and make a modest return in excess of inflation. They don’t pay big dividends: 1.4 % and 1.1% respectively.
Over five and ten years M&W has delivered with real absolute gains without too much volatility; now with inflation running at 11% and likely to go higher it cannot compete. The price has held up well (the FTSE 250 index is down 17% over the last year) but it cannot catch up with the sharp increases in energy and food prices.
It’s a similar story at Personal Assets. I am satisfied with both funds as they are reliable anchors in my portfolio. Another fund with a similar profile but a higher yield is the Vanguard Global Equity Income fund – it yields 3%.
Now for something more exciting: Pershing Square Holdings. This is a very actively managed fund with veteran investor Bill Ackman at the helm. It is invested in US stocks but has so far almost avoided the tech sector so would complement funds like Scottish Mortgage and Monks. Lift the bonnet and there’s some pretty fancy stuff down there – don’t ask me what interest rate swaptions are.
Bill is a bold stock picker and takes some big losses when he gets it wrong. This year he bought Netflix in January and sold in April, losing more than $400 million. He does like to play at the high stakes table. However, his winners outweigh his bloomers and I like his philosophy.
If I had any money to invest I’d have a flutter, especially as it’s trading at a 30% discount to NAV. Meanwhile many investors will have to dip into capital to keep the home fires burning this winter.