Taking Stock

Our quarterly investment trust magazine

GREATEST INVESTING HITS: A look at the ‘best of’

When it comes to success in the music charts talent, skill, luck and being in the right place at the right time can all be factors in realising potential. But is the same true for investing?

In this edition of Taking Stock, our expert contributors look at the investing hits that for them might feature in a ‘best of’ compilation – those stock picks and broader strategies that have really delivered for investors – and explain the factors they believe were at work.

Is it the case that investment success factors are unique to each situation? Or are there common themes? And how and where might we look for the hits of the future?

Highlights:

  • Stars of the future? – If the rise, fall and rise again of technology brands has been the story of recent years, what might the future hold? From artificial intelligence to climate change, Alliance Trust Savings’ James McCafferty looks at what the future gazers have to say.
  • Parklife! – The team at Ediston see beyond ‘the death of the high street’ to the plentiful life in retail parks. With people shopping more than ever before, the rise of online shopping is a sign that retail is evolving rather than dying and retail parks with the right attributes are in line to benefit.
  • Discard the three Ds – James Budden of Baillie Gifford says long-term investors in Japan should cast out the three Ds of debt, demographics and deflation often used to sum up the country’s economic problems. Instead they should look to its many visionary businesses, able to challenge the status quo.
  • The changing face of the Chinese consumer – Dale Nichols, Portfolio Manager of Fidelity China Special Situations explains why he believes the incredible growth of China’s middle classes and the country’s seismic shift towards domestic consumption presents a significant opportunity for investors.
  • Greatest hits of a value investment approach – Merchants Trust Portfolio Manager, Simon Gergel, believes the highest returns can come either when a company’s prospects have been misunderstood or it changes it business structure over a period, and puts forward Royal Dutch Shell and United Business Media as examples.
  • A contrarian approach can pay dividends – Alasdair McKinnon of The Scottish Investment Trust explores why his team prefers to plot its own course rather than following the herd. They see value in ugly duckling stocks shunned by others but with potential to improve. From retail to wine.
  • Digitalisation: Opportunities and risks – For Lucy Macdonald, digitalisation is a fundamental trend that has played a particularly important role in recent years, with businesses alert to its impact well positioned for success. The Brunner Investment Trust’s investment in Microsoft is a case in point.
  • A capital idea for growth – The Baillie Gifford Monks Investment Trust philosophy is based on the idea of investing as the provision of long-term risk capital to businesses seeking to grow. James Budden breaks this broad idea down and explains what it means for the way Monks is managed.
  • Realising potential on the financial front line – Invesco’s Jonathan Brown and Robin West consider the UK equity market as one of the most diverse in the world, with smaller companies tending to outperform the larger. They present the facts and highlight three stocks that have delivered for their trust over the past few years.
  • US hits: A case study – Identifying and backing winners of tomorrow is one way that investment managers can help grow investor funds. But it’s easier said than done. By way of illustration, Sara Wilson of Alliance Trust Savings explores the changing fortunes of corporate America.
  • An investment story of excitement and analytical rigour – For the hit-finders at the Allianz Technology Trust, it’s all about identifying major transformative growth themes within technology. Cloud and software-as-a-service are the two most significant themes in the Trust’s current portfolio. Portfolio Manager, Walter Price, explains why.
  • Quality breeds success – For Abby Glennie, Investment Manager for the Aberdeen Smaller Companies Income Trust PLC, hit-making is all about investing in resilient companies with strong balance sheets and cash generation that have a sustainable competitive advantage.

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Alliance Trust Savings Limited is registered in Scotland No. SC 98767, registered office, PO Box 164, 8 West Marketgait, Dundee DD1 9YP; is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, firm reference number 116115. Alliance Trust Savings Limited gives no financial or investment advice. ‘Alliance Trust Savings’, ‘ATS’ and 'AT Savings' are all brand names of Alliance Trust Savings Limited together with the ‘Alliance Trust Savings’ logo are owned by and used with the permission of Alliance Trust PLC, the previous owner of Alliance Trust Savings Limited.