Baron & Grant Investment Management Limited

19/08/2024

UK EQUITY MARKET REVIVAL 🇬🇧

"The UK equity market continues to languish at a c.40% discount to global markets. Commentators and investors alike have all but thrown in the towel. Some of the MSCI PIMFA benchmarks used to monitor our portfolios’ performance have recently reduced their UK weighting. Yet, I dare to suggest there is hope. Catalysts for a re-rating lurk in the shadows..." 👇

The UK equity market continues to languish at a c.40% discount to global markets. Commentators and investors alike have all but thrown in the towel. Some of the MSCI PIMFA benchmarks used to monitor our portfolios’ performance have recently reduced their UK weighting. Yet, I dare to suggest there ...

20/03/2024

INFRASTRUCTURE BLUES 🏗

"Previous columns have commented on the extent to which higher interest and discount rates have adversely affected sentiment across a range of alternative asset classes, including the infrastructure sector. The prospect that private finance initiative (PFI) and public-private partnership (PPP) projects will expire over the coming years, together with an erroneous cost-disclosure regime inflicted on the investment trust sector more generally, also weighs on the sector. This has created a perfect storm. Yet there are reasons to believe such concerns are overplayed and the fundamentals remain sound. As such, wider than average discounts and handsome yields represent an attractive opportunity for patient investors – particularly at this point in the interest rate cycle..."

Previous columns have commented on the extent to which higher interest and discount rates have adversely affected sentiment across a range of alternative asset classes, including the infrastructure sector. The prospect that private finance initiative (PFI) and public-private partnership (PPP) projec...

26/02/2024

LAND OF THE RISING MARKET 🇯🇵

"Readers will be aware that Japan is one of our favoured markets. The market performed well last year but scepticism remains as to whether this is yet another false dawn – there having been several in recent decades. The market has long offered ‘value’ – in part reflected by price-to-book ratios comparing well with other markets – but share prices have generally failed to respond. That started to change last year. Many challenges remain but omens for a sustained if gradual rally look more promising than they have for a while..."

Readers will be aware that Japan is one of my favoured markets. The market performed well last year but scepticism remains as to whether this is yet another false dawn – there having been several in recent decades.

22/12/2023

Merry Christmas and Happy New Year from all at Baron & Grant Investment Management Limited!
🎅🏻🎄

11/10/2023

DISCOUNT DOLDRUMS

"Poor market sentiment, higher interest and discount rates affecting certain alternative asset classes, and sector-specific issues help to explain why discounts stand at their widest point since 1990 - apart from a brief moment during the financial crash of 2008/09. There seems to be no end to the bad news. The central question is whether such discounts have become endemic. Omens and experience suggest not. If so, quality companies across a range of asset classes look attractive – many of which offer attractive yields..." 👇

Poor market sentiment, higher interest and discount rates affecting certain alternative asset classes, and sector-specific issues help to explain why discounts stand at their widest point since 1990 - apart from a brief moment during the financial crash of 2008/09. There seems to be no end to the ba...

07/09/2023

"Recent columns have highlighted favoured markets and sectors as our portfolios continue their pivot toward equities at the expense of other, more defensive assets including cash. The UK market and private equity sector has been the focus of this transition given they perhaps best illustrate the extent to which market sentiment is poor relative to outlook and investment trust discounts have widened. However, exposure has also been increased to other equities including emerging markets given the margin by which the MSCI Emerging Markets (EM) index has underperformed developed markets. Various tailwinds are now aligning which could make for a meaningful re-rating..." 👇

Recent columns have highlighted favoured markets and sectors as our portfolios continue their pivot toward equities at the expense of other, more defensive assets including cash. The UK market and private equity sector has been the focus of this transition given they perhaps best illustrate the exte...

10/08/2023

"The columns ‘Darkest before the dawn?’ (21 April 2023) and ‘Tilting towards the storm’ (12 May 2023) suggest discounts are attractive and market sentiment is poor relative to outlook – this not being helped by erroneous yet influential economic forecasts from various financial institutions. In part because the reality is different and because much uncertainty has been baked into market prices, our portfolios have been gradually pivoting towards equities in recent months and away from a more defensive positioning – a positioning which has compensated somewhat for discounts having widened significantly during the last couple of years.

Given poor market sentiment and the fact humility is an essential component of good portfolio management, it is worth re-examining the case for equities at this juncture – particularly so given we are approaching the moment of peak interest rates. In doing so, investors are encouraged to focus on company fundamentals rather than economic or market forecasts – given the former is real and the latter are invariably wrong."

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The columns ‘Darkest before the dawn?’ (21 April 2023) and ‘Tilting towards the storm’ (12 May 2023) suggest discounts are attractive and market sentiment is poor relative to outlook - this not being helped by erroneous yet influential economic forecasts from various financial institutions. ...

16/06/2023

"My last two columns (‘Darkest before the dawn?’, 21 April 2023 and ‘Tilting towards the storm’, 12 May 2023) suggest investment trust discounts have widened to very attractive levels and, more generally, market sentiment is overly poor relative to outlook. This is a good entry point for long-term investors.

Market volatility is set to continue for a variety of reasons and such a journey and pivot, no matter how measured, is rarely a smooth one. Our compass in these choppy waters remains firmly fixed on UK equities and private equity companies given their attractive valuations and prospects..." 👇

My last two columns (‘Darkest before the dawn?’, 21 April 2023 and ‘Tilting towards the storm’, 12 May 2023) suggest investment trust discounts have widened to very attractive levels and, more generally, market sentiment is overly poor relative to outlook. This is a good entry point for long...

30/03/2023

"As this month’s budget fades into memory, its various measures and implications are perhaps more prescient than some recognise. It was delivered against a difficult backdrop and stands at an important juncture regarding how policy makers globally are reacting to economic events and at a point when the health of the UK stock market is being questioned. Meanwhile, perhaps in part reflecting this uncertainty, some investment trust discounts are presenting good opportunities for long-term investors." 👇

The UK stock market is ailing and investment trusts are presenting good opportunities for long-term investors. This article discusses the challenges faced by the UK stock market and the need for policy makers to take a more innovative approach to promote investment in the market. The article also hi...

06/03/2023

"Thematic investing is often considered a mixed blessing because novice investors can fall prey to slick marketing and popular fads which prove anything but durable, and therefore turn out to be costly – often the ‘popularity’ is already reflected in share prices. Too often funds are launched which capture the mood of the moment, but which then wither on the vine. There can be no substitute for fundamental research as to the resilience of the trends in question, and there also needs to be a clear commitment to then stay the course given the path is rarely a smooth one..." 👇

Thematic investing is often considered a mixed blessing because novice investors can fall prey to slick marketing and popular fads which prove anything but durable, and therefore turn out to be costly – often the ‘popularity’ is already reflected in share prices.

14/02/2023

Please tune in to Investment Trust Edge January 2023 on Asset TV to hear Chris Grant, CEO of Baron & Grant Investment Management, Emma Bird, Head of Research at Winterflood Securities, and Peter Hewitt, Fund Manager at Columbia Threedneedle examine the prospects for the Schroder UK REIT, ask whatever happened to the small cap effect and finish with a look at private equity: should it be in a mainstream client portfolio?

Link to video: https://www.asset.tv/video/investment-trust-edge-january-2023

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