- Wealth preservation trusts continue to favour protection over growth
- Due to their very different profiles you need to look carefully at how they are positioned
- They all run some equity exposure but have very different levels of bond exposure to each other
Few funds made it through 2022 unscathed, and even those with an explicitly defensive profile took a hit. A combination of problems, including a painful government bond sell-off, ultimately took its toll on most of the so-called wealth preservation investment trusts, although most of them fared better than equity markets. Personal Assets Trust's (PNL) and Capital Gearing Trust's (CGT) share price total returns fell around 4 per cent in 2022, while RIT Capital Partners' (RCP) share price total return was down by more than a fifth. However, their more cautious peer, Ruffer Investment Company (RICA), made a decent share price total return of around 7 per cent.
These four names are well known for running some equity exposure but also using a variety of assets – from classic safe havens such as bonds and gold to more esoteric holdings – as a way of protecting investors from the worst pain of stock market falls. So with challenges persisting in 2023 even as equity markets show some signs of life, it is worth looking at how these trusts are positioned now.