Defensive trusts step into the limelight: Their variety offers a safe …

Many usually audacious investors seem minded to play it safe in these edgy times – at least for a while.

The banking panic may have abated, but concerns are lingering over the solidity of some lenders and the credit crunch that could result from the affair.

Against this background, Americans have, in the past fortnight, sunk £286billion into ultra low-risk money market funds, preferring this port in a storm amid the maelstrom of the markets.

In such a febrile atmosphere, the words ‘capital’ and ‘preservation’ sound extra reassuring.

This is why defensive investment trusts, like Capital Gearing, Personal Assets, RIT Capital Partners and Ruffer, which strive to shield your money in turbulent times, are stepping into the limelight.

The attraction is the safe harbour that should be provided by the variety of their holdings.

These include cash, commodities, gold, government and other bonds, shares and even rights to the hits of Rihanna and Blondie. Such is the rich mix that analysts Kepler Intelligence calls these trusts the ‘protective diversifiers’.

You may be rolling your eyes at the word ‘defensive’, seeing this as the time to follow the Warren Buffett adage: ‘Be fearful when others are greedy, and greedy when others are fearful.’ 

But a defensive buffer could embolden you to seize chances that emerge. And these trusts are not the equivalent of a deposit account, where your cash may be secure, but where inflation erodes its purchasing power.

Combating inflation is part of the capital preservation offer. 

Charlotte Yonge, co-manager of the Personal Assets trust, says: ‘We think the bond markets have become complacent about the threat of inflation, believing that it is set to head back down to normal levels.’

This perception is proving useful for Personal Assets and its open-ended near-identical twin fund Trojan (both have the same constituents). Yonge says that Tips – US Treasury Inflated Protected Securities – are surprisingly cheap. The trust and fund also invest in UK government gilt-edged stocks and gold.

Currently the proportion of shares at Personal Assets is the smallest ever with a bias towards groups like the Swiss giant Nestle, that are successfully imposing price rises.

Pets, it appears, insist on Nestle’s Purina foods, while their owners can’t live without Nespresso. The share price of Personal Assets stands at a tiny discount to the value of its net assets. Capital Gearing is at 2 per cent discount.

This trust’s aim is ‘to preserve, and over time to grow shareholders’ real wealth’.

Bonds, including a sizeable chunk of index-linked gilts, make up the bulk of the portfolio, but there are some shareholdings including a stake in Greencoat UK Wind.

The holdings at Ruffer range from BP to a tiny slice of the Hipgnosis trust which acquires popular song rights. But gilts and Treasuries form the most substantial part of the portfolio. The trust, which is at a 2 per cent premium, will also turn to derivatives which it describes as ‘tungsten-tipped instruments for extreme danger’.

Ruffer has been my defensive choice.

If I were now looking for a bargain in this sector, RIT Capital Partners would seem suitable since it is at a 24 per cent discount but it’s not for everyone.

Analysts’ assessments of the trust, in which one branch of the Rothschild family holds a 19 per cent stake, are scarcely reassuring.

Private equity represents one of the largest investments in what has been called an ‘opaque’ portfolio, and the managers’ renumeration appears overly generous. Alan Brierley of Investec declares RIT Capital Partners to be ‘simply uninvestable’ on cost grounds alone. For the hugely wealthy, the defensive solution is the hedge fund which seeks to supply safety, plus appreciation, often through macro strategies, that is making the most from the ups and downs of markets caused by economic and political events.

BH Macro, a trust run on this basis, benefited from the ‘rich opportunity set’ created in 2022 from ‘surging inflation and central banks reversing years of monetary stimulus’.

The trust’s directors sense that more choppy waters lie ahead, providing yet more opportunities. Numis regards this trust as an ‘attractive risk diversifier’. If the premium dips from the current 3 per cent, I may take shelter in this hedge.

It would be possible to assemble a DIY array of investments similar to that selected by BH Macro, Capital Gearing, Personal Assets or Ruffer.

But I am happy to leave the job to the professionals and use my time to review the other contents of my portfolio.

As an investor, I try to follow the doctrines of economist Nassim Taleb, author of The Black Swan.

Rather than attempting to predict what lies ahead, we should accept that uncertainty is a constant and learn how to exploit it.

The process is easier with a buffer, whatever is happening in the markets.

ats-euromaster listed on couponmatrix.ukchaos-cards listed on couponmatrix.ukeleonora-bonucci listed on couponmatrix.ukgo-groopie listed on couponmatrix.ukhatton-adventure-world listed on couponmatrix.ukwiltshire-farm-foods listed on couponmatrix.uk
ats-euromaster listed on couponmatrix.ukIf you own a car, you’ll know all about the importance of maintenance. ATS Euromaster will take care of all your maintenance including MOT servicing, tyres and a whole lot more. Utilise a ATS Euromaster discount code and make sure your tyres have tread, your battery has juice and your brakes are working for less. With over 50 years of experience and hundreds of locations around the country you can be assured of being in good hands with one of the country’s most respected garage chains.
chaos-cards listed on couponmatrix.ukLive, breathe and sleep gaming? Get acquainted with Chaos Cards and get your trading card collection on point! You could slice the price of all manner of cards, from the classic Pokemon to the mighty Yu-Gi-Oh, when you put one of our Chaos Cards discount codes to the test. Don’t forget to browse the board game, dice game and role-playing departments too and banish boredom from every raising its head without breaking the bank.
eleonora-bonucci listed on couponmatrix.ukLooking for an Eleonora Bonucci promo code? You've come to the right place! Check out our exclusive deals and discounts on all your favourite Eleonora Bonucci fashion, beauty and home products. Whether you're looking for a new outfit or just some stylish accessories, we've got you covered. There’s a wide range of products, from incredible high quality tops to different scents of perfumes, so browse our selection and take advantage of our great deals today! At Groupon, we know that saving money is important to our customers and latest trends can get expensive. That's why we work hard to find the best Eleonora Bonucci promo codes and discounts codes, so you can shop for your favourite products without breaking the bank. Whether you're looking for a new outfit, home accessories or just some stylish footwear, we've got you covered. So what are you waiting for? Happy shopping! Our top-performing Eleonora Bonucci products is their clothing range. From the most beautiful coats for winter to colourful and fun swimwear for summer in a variety of different styles and colours, you’re guaranteed to get the most stylish pieces for every season. So what are you waiting for? Look stylish no matter the weather and order your best quality pieces today. And with our Eleonora Bonucci discount code, you can save even more.
go-groopie listed on couponmatrix.ukGo Groopie is a website that offers amazing deals on a wide range of products. They have everything from cosmetics to electronics and everything in between. You can save even more money by using a Go Groopie discount code. Expect everything from black velvet beds to crates of Chianti to go under the hammer, so there’ll be plenty of variety when you choose to shop sand save. So what are you waiting for? See how much Go Groopie can save you today! At Groupon, we are always on the lookout for the best deals and discounts so you can save money on your favorite brands. When it comes to Go Groopie, we have a team of experts who scour the internet for the latest and greatest Go Groopie discount codes. This way, you can be sure you are getting the best possible deal, be it on fashion, electricals or travel essentials. One of the best things about Go Groopie is that you can find go Groopie promo codes for a wide range of products. Whether you are looking for new cosmetics item or to delve into arts and crafts, you can be sure to find a great deal. One great catch we can name is the selection of Go Groopie fitness trackers, which can enhance and monitor your exercise for as little as £9.99!
hatton-adventure-world listed on couponmatrix.ukThere is so much to do at Hatton Adventure World! Originally a farm, Hatton has grown into a full blown day out of endless fun and activities. The year round centre makes it a major attraction of the Midlands, drawing in happy families time and again. From rides and slides, to meeting the animals, laser tag and strawberry or pumpkin picking, there is something for everyone in the family. With your Hatton Adventure World discount code, visitors big and small can get tickets for less and head off for a great day out.
wiltshire-farm-foods listed on couponmatrix.ukWiltshire Farm Foods is a UK-based food supplier that delivers ready-made meals directly to customers' homes. The company was founded in 1991 and has since become one of the leading suppliers of frozen foods in the country. A Wiltshire Farm Foods discount code can secure savings on a wide range of products, including starters, main courses, desserts, and side dishes. So whatever peaks your appetite, make it a delicious an discounted delivery from Wiltshire Farm Foods. At Groupon, we understand that saving money is important to our customers. That's why we work hard to find the best Wiltshire Farm Foods discount codes and vouchers, so you can get the food you want at a price you can afford. We update our list of Wiltshire Farm Foods vouchers regularly, so be sure to check back often to see what's new. And remember, with Groupon, you can always save more on your next order! One of Wiltshire Farm Foods’ top-selling products is the Chicken Tikka Masala. This dish is made with tender chicken breasts in a rich and flavourful sauce. It's perfect for a quick and easy meal, and can be ordered with rice or naan bread. Don't forget to use your Wiltshire Farm Foods vouchers to get a discount on your order and enjoy this delicious dish for less.