- Equity markets are pricing in a lot of good news
- Wealth preservation trusts somewhat disappointed last year
- But they could be a useful hedge for bearish investors
The past two years have been tough for the four investment trusts that promise to deliver a degree of capital growth but with a focus on wealth protection, regardless of how financial markets perform. Ruffer Investment Company (RICA) and RIT Capital Partners (RCP) have had particular difficulties, and Capital Gearing Trust (CGT) and Personal Assets Trust (PNL) have also underperformed the FTSE All-Share since Russia invaded Ukraine. The index returned 8.8 per cent in the two years to 23 February.
But these trusts remain relatively defensively positioned and can still be a useful hedge against the risk of future woes in equity markets, particularly if you think the market's current optimism is overdone.