Page 41 - DIY Investor Magazine | Issue 29

Funds in this sector can invest all over the world; the Janus Henderson and Liontrust funds have significant exposure to international equities; they make up more than 50% of their investments, with a strong bias towards the US (37%), which gave them an advantage last year when the American markets recovered quicker than others.
The EdenTree fund has a very different geographical breakdown with 54% invested in the UK and 15% in the rest of developed Europe; only 5% is in America, which has proved a good mix for this fund in recent months.
Hopefully as we emerge from lockdown, and the economy starts to recover, the UK will continue to be a lucrative place to invest.
Yours aye
THE MOST DIFFICULT THING IS THE DECISION TO ACT: THOUGHTS OF SALTYDOG INVESTOR
‘The most difficult thing is the decision to act. The rest is merely tenacity.’ (Amelia Earhart).
The last few months have been the most difficult to navigate in regard to where and how much money to invest in the various IA sectors since I began DIY investing in the early 2000s.
You will know from my previous epistles, I believe in the positive long-term future of green renewable funds, technology funds and UK funds, with hydrogen shares tacked-on; recently the only one to perform has been UK funds, the other three have gone into reverse!
The question is whether to cling to these beliefs, making minor reductions or simply jump ship. I may not be the fastest boat on the sea, but today’s investment weather is definitely foggy; no sane person goes fast in a fog, so changes have to be made. Commentators give various for the reversal of progress in these sectors.
• Inflation is imminent due to astronomical world government handouts.
• Technology companies are too big and strong with unsustainably high bubble prices.
• The Covid recovery will be tortuous in many countries, upsetting world supply and demand chains.
• Europe and the UK additionally have Brexit to contend with.
• Some in Western economies have built-up large amounts of savings in lockdown; when they spend these nest-eggs it will drive prices up (which links to the point on inflation).
Even without brain-fog and short periods of mental absence, that is a lot to contend with, and it is difficult for me to make a considered judgement.
Many of you have far more experience and better knowledge to fall back on than I do; not intended to be a directive of divine thought, this is what I am going to do with my own portfolios, be it a right or wrong decision. I am not going to exit any fund that I hold today; I am going to halve the green, renewable and technology funds, reinvesting this same amount into UK funds.
UK sectors still seem to have gas in their tanks; I am hopeful of an improved trading relationship with Europe over time, plus, the UK sectors are overdue an upwards revaluation.
I have decided to cling on to the hydrogen shares I purchased two years ago; even though ITM has halved from its 700p high of a few months ago, it is still three times my purchase price. Only time will tell; my mind is coloured by my exiting early, many years ago, from ASOS and Hargreaves when I sold both of my holdings in similar circumstances, only to see them go up by multiples of ten or more over the following few years. Why I did not buy them back again, I do not know; I guess it was just a reluctance to confirm a poor decision!
An isolated fund I hold is TB Guinness Global Energy, which I intend to keep as it continues to edge up in price and should benefit from an increase in world activity as the pandemic eases and fuel and energy prices increase with demand. We’ll see.
Satisfyingly, even in times of stress the Tugboat and Ocean Liner portfolios continue to make steady progress; for those happy with an average 6% annual gain they have proved very reliable over the years, and considerably better than cash ISA returns.
After my recent operations, my wife has to do the driving and oversee all of our activities. Fortunately, she enjoys this, and is very good at these things. All I have to do now is find a way of reducing her rum ration!
Best wishes and good luck with your investments. Douglas, Founder & Chairman
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41 DIY Investor Magazine | Jun 2021