David Stevenson

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Expect more launches if the investment trust drought continues

Over the past few years, I’ve written about why private investors might want to invest in private assets and especially equity, usually through a listed investment trust. At its very simplest, there are more high-growth businesses that are choosing to avoid the public markets and opting to stay private for longer, aided by private equity funds. So, if as an investor you want some exposure to these higher-growth private businesses, you are forced to consider the broad spectrum of funds ranging f…

Risk levels are on the rise and stock market volatility is set to surge, according to some fund managers. In recent weeks, two defensive investment trusts — Capital Gearing and Ruffer Investment Company, both beloved of private investors — have warned about a long list of risks. These include more inflation to come, impending recessions, liquidity squeezes and the obligatory “geopolitical risk”. I have no idea whether these experienced and respected managers are right, but one measure of stock…

The most interesting investment story of 2023 was how all the experts and commentators — me included — got the market so wrong. Along with many others, I thought we’d be mired in a recession with stocks getting a good beating. How wrong we were. But I’m not about to let that stop me putting out some adventurous investment thoughts for 2024. Most measures of financial market volatility are presently very low — in fact well below their long-term averages. It nonetheless feels potentially volatil…

As stock markets in the US surge, many increasingly cautious local private investors are turning to options and derivatives to protect against changing sentiment. There has been an explosion in funds in the US that use options in one form or another to act as a hedge, be that through so-called covered call writing, or more structured defined outcomes. Options are hugely popular on US retail platforms such as Robinhood but derivatives are also finding their way into more mainstream products, suc…

For all the excitement over artificial intelligence, I’d wager that most investors would struggle to identify many sectors where there is hard financial evidence of it helping businesses boost sales or improve margins. But in fintech, the benefits are becoming plain to see. Reports emerged a few weeks back from Microsoft-backed OpenAI that its work for Klarna — the “buy now, pay later” group soon to float — had already yielded a $40mn improvement in Klarna’s profits this year. About two-thirds…

Returns have been dismal over the past decade, but investment banks are buying into cleaner energy

Care home shortage and a stabilising residential market offer opportunities in rate-sensitive property funds