Going in and out of favour is something we see almost daily in the investing industry. Oil was the dream investment when it was soaring to more than $100 a barrel, and experts claimed it would hit the $200 a barrel point. But recent over supply and slowing demand mean the commodity is now out of favour. We’ve seen the same recently in China and emerging markets, to name just a couple.
However, there are some areas of the industry that have long been unloved.
Investment trusts have for suffered such a fate for many years, losing out to open-ended funds year after year. Many wealth managers prefer the transparency and relative simplicity of the open-ended sector and are reluctant to navigate the gearing, liquidity and discounts that put them off investment trusts.
The RDR was set to change all that, with the investment trust industry claiming the banning of commission would remove the big hurdle to investment trusts and that the regulation would force advisers to look further afield.
Two years on and we look at whether these much hailed effects have actually helped the sector and if the vehicles are now in favour in our cover story on page 18.
Obviously, the launch of Neil Woodford’s record-raising investment trust this year has only helped asset flows to the sector, and put a spotlight on the products available.
Richard Pease is someone who is no stranger to being in and out of favour. He’s been in the industry for more than 30 years and had enjoyed glory and disapproval – having famously apologised to his New Star European Growth Fund investors for 2007 underperformance. He is once again riding high now, having recently launched Crux Asset Management, complete with his former Henderson European fund. He speaks to John Husselbee about breaking out on his own on page 42.
Emerging markets are clearly out of favour currently, with outflows for the sector ramping up amid concerns of the US dollar strength and the fallout from China. But Patrick Collinson hunts out one of the in favour funds of the sector on page 26, seeing who can make money in tough times.