The diary: Unicorn’s Peter Walls

Peter Walls is manager of the Unicorn Mastertrust fund. His diary runs between 24-30 June.

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Monday It is the first day of Wimbledon and the BBC’s weather forecaster is predicting an overnight frost! It is pretty chilly in the markets too, with China moving into bear market territory on fears of a rapidly deflating credit bubble. I’m not sure what, if anything, this says about Anthony Bolton’s timing in announcing his planned retirement from fund management but the share price of Fidelity China Special Situations ends the day 5.3 per cent lower. If further evidence that GDP growth and stockmarket performance do not go hand in hand were needed, I note that Chinese equities are significantly below their levels of 20 years ago.


Tuesday
 Emerging markets investment trusts have experienced a tough few weeks and are now firmly down year-to-date. Fortunately I have had very little EM exposure in recent times but with discounts starting to look more attractive it could be time to revisit. It is timely then that the manager of Pacific Assets Trust is presenting in London today. First State Stewart took over the management of this trust three years ago, since when performance relative to the peer group has been impressive. It was an interesting presentation and while the long-term case for investment remains strong, I decide to keep my powder dry for the present. The evening entertainment takes place on the rooftop of No.1 Poultry at the annual AIC Summer Party. Not only does this event provide an excellent forum to catch up with old friends and foes, it also offers the opportunity to review the City skyline and check out the crane count.

 

Wednesday A welcome respite from the screens is provided by a marketing trip to see investors in Norwich. In a first, for me at least, the lunchtime presentation is delivered over chilli and a pint of Best in a micro-brewery! In the post-RDR world, there is growing awareness of the benefits of investment trusts and my fund is generating interest from those that recognise the attractions but may not have the time or expertise to invest directly.

 

Thursday An early-morning review of the overnight market reports tells me that the gold price has gone down because of encouraging US economic data and Wall Street has gone up because of a downward revision to US GDP growth. Confused? Me too. I spend some time revisiting the wording of the discount control mechanisms that have been put in place by more than a third of all of the conventional investment trusts currently in issue. Quite of a few of the statements refer to buying back shares in ‘normal’ or ‘stable’ market conditions, implying that some discount ratings could be vulnerable if markets continue to wobble.

 

Friday I spend the majority of the day poring over spreadsheets and catching up on the enormous quantity of research and economic commentary that passes my way throughout the week. Food for thought is supplied by two articles, the first asserting that the commodities super-cycle is dead and the second highlighting possible cracks in the structure of exchange traded funds following the suspension of redemptions by a bond ETF in the previous week.

 

Saturday Just about manage to catch the second Lions Test before heading off to my daughter’s school speech day and prize giving. I am filled with pride as she gets a mention as a member of the winning team in the Rotary International Youth Speaks public speaking competition, the national final of which took place at Hull University back in May.

 

Sunday My daughter’s reward (if that is the right word for it) for her success is to reprise her performance for the benefit of the local district Rotary Clubs at its annual lunch. The team receives a particularly warm reception on what transpires to be the hottest day of the year. Be it the weather or the financial markets, so much can change in the course of a week.