Navigating stock market turbulence
Alex Crooke, Portfolio Manager of The Bankers Investment Trust, talks about the Trust’s performance year-to-date, the role of regional managers within the portfolio, the implications of higher interest rates and elevated inflation on businesses, and areas where he is finding opportunities in a volatile market.
Key takeaways:
- It’s been a difficult period for global equity markets as rising inflation, higher interest rates, and the war in Ukraine have weighed on investor sentiment. However, The Bankers Investment Trust has held up relatively well benefitting from its defensive positioning.
- Given the current environment, we are looking to tilt the portfolio towards areas where growth and monetary policy are likely to be more supportive and where valuations may be more attractive e.g. Greater Asia (including China) and financials.
- The current outlook remains uncertain given upward pressure on interest rates, as we do not know how high they may go or what effect that will have on inflation. Therefore, portfolio construction will continue to be driven by areas where we see better opportunities – the best growth for the best value.
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These are the views of the author at the time of publication and may differ from the views of other individuals/teams at Janus Henderson Investors. References made to individual securities do not constitute a recommendation to buy, sell or hold any security, investment strategy or market sector, and should not be assumed to be profitable. Janus Henderson Investors, its affiliated advisor, or its employees, may have a position in the securities mentioned.
Past performance does not predict future returns. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.
The information in this article does not qualify as an investment recommendation.
Marketing Communication.
Important information
Please read the following important information regarding funds related to this article.
- Global portfolios may include some exposure to Emerging Markets, which tend to be less stable than more established markets. These markets can be affected by local political and economic conditions as well as variances in the reliability of trading systems, buying and selling practices and financial reporting standards.
- Where the Company invests in assets that are denominated in currencies other than the base currency, the currency exchange rate movements may cause the value of investments to fall as well as rise.
- This Company is suitable to be used as one component of several within a diversified investment portfolio. Investors should consider carefully the proportion of their portfolio invested in this Company.
- Active management techniques that have worked well in normal market conditions could prove ineffective or negative for performance at other times.
- The Company could lose money if a counterparty with which it trades becomes unwilling or unable to meet its obligations to the Company.
- Shares can lose value rapidly, and typically involve higher risks than bonds or money market instruments. The value of your investment may fall as a result.
- The return on your investment is directly related to the prevailing market price of the Company's shares, which will trade at a varying discount (or premium) relative to the value of the underlying assets of the Company. As a result, losses (or gains) may be higher or lower than those of the Company's assets.
- The Company may use gearing (borrowing to invest) as part of its investment strategy. If the Company utilises its ability to gear, the profits and losses incurred by the Company can be greater than those of a Company that does not use gearing.
- Using derivatives exposes the Company to risks different from - and potentially greater than - the risks associated with investing directly in securities. It may therefore result in additional loss, which could be significantly greater than the cost of the derivative.
- All or part of the Company's management fee is taken from its capital. While this allows more income to be paid, it may also restrict capital growth or even result in capital erosion over time.
Specific risks
Key takeaways:
- It’s been a difficult period for global equity markets as rising inflation, higher interest rates, and the war in Ukraine have weighed on investor sentiment. However, The Bankers Investment Trust has held up relatively well benefitting from its defensive positioning.
- Given the current environment, we are looking to tilt the portfolio towards areas where growth and monetary policy are likely to be more supportive and where valuations may be more attractive e.g. Greater Asia (including China) and financials.
- The current outlook remains uncertain given upward pressure on interest rates, as we do not know how high they may go or what effect that will have on inflation. Therefore, portfolio construction will continue to be driven by areas where we see better opportunities – the best growth for the best value.