Page 20 - DIY Investor Magazine | Issue 41

· August 2024 20
DIY Investor Magazine
ACTIVE MANAGERS HAVE THE FREEDOM TO BUY AND SELL HOLDINGS DURING VOLATILITY, RESPONDING TO CHANGING MARKET CONDITIONS –
BY JULIAN BISHOP
Although active funds do typically cost more than passive, investors are paying for a more agile and flexible approach. With a constant focus on global markets and individual company performance and risk, Brunner’s managers aim to deliver capital growth and rising income.
KEY TAKEAWAYS
• Active management gives portfolio managers the flexibility to respond to changing fortunes for companies.
• Brunner has a global, active remit, allowing its managers to buy and sell the right businesses as needed.
• The aim of this flexibility and responsiveness is to help investors to protect and grow their wealth.
Markets have had a turbulent few years. The COVID-19 pandemic knocked markets back, then escalating geopolitical tensions did the same, topped off by rising inflation and interest rates.
These significant global events required thorough analysis, followed by adjustments to global investment trusts in order to protect wealth.
Active management gives managers the ability to respond to these volatile markets. That’s what sets it apart from its passive counterpart, where holdings simply track an index from inception. This does generally make passive funds cheaper than active, but it also means there’s no one actively making decisions about the portfolio and associated risks on an ongoing basis.
‘THE FREEDOM TO PICK WHAT THEY SEE AS THE BEST COMPANIES FROM AROUND THE WORLD AND THE FLEXIBILITY TO RESPOND TO CHANGING MARKET CONDITIONS’
The Brunner Investment Trust is actively managed with a global remit. The portfolio managers have the freedom
to pick what they see as the best companies from around the world and the flexibility to respond to changing market conditions. That is how it aims to deliver its dual objective of capital growth and rising income over the long term.
VALUATION IS CRUCIAL
Brunner’s managers look to choose some of the best companies in the world for their portfolio. But not only is it important to select the right company in the first place, it’s also crucially important to buy into it at the right valuation, and eventually sell it at the right point too. Ideally, the managers spot an opportunity before it reaches its full potential and whilst it is still growing,
and then exit if the market is looking overdone and they think a bubble may be forming.
That’s what active
“WE FEEL LIKE WE’VE
management for wealth DONE A GOOD JOB
generation is all about. ACROSS A WIDE RANGE
Brunner’s managers and OF MARKET CONDITIONS,
their supporting teams at WITHOUT TAKING TOO
Allianz Global Investors MUCH RISK”
spend thousands of hours watching, analysing and monitoring company performance, aiming to buy into the right business at the right time (judged on multiple metrics), and exit at hopefully the right time too. And it’s that focus, flexibility and responsiveness that differentiates active management from passive.
Brunner’s track record speaks for itself. The trust has found itself ahead of its benchmark for five consecutive years,
net of fees1. Co-lead portfolio manager, Julian Bishop, comments, “We feel like we’ve done a good job across
a wide range of market conditions, without taking too
much risk. We hope that continues, but you have to
work hard to outperform. You’re constantly thinking and using your judgement.”
ACTIVE OWNERSHIP
Active management gives way to active ownership. Holding stakes in businesses allows the Brunner
managers to actively engage with those management teams. Their collective shareholdings give the managers
AN ACTIVE INVESTMENT APPROACH FOR LONG-TERM WEALTH CREATION