PA ANALYSIS: Time to pick the winners from the ‘end of austerity’

Investment trusts have demonstrated impressive post-referendum resilience in recent weeks, with top-level macro swings indicating positive things to come for real assets.

PA ANALYSIS: Time to pick the winners from the ‘end of austerity’

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The largest fund raisings of the past month have been £125m for International Public Partnerships and £75m for GCP Infrastructure, indicating real demand for infrastructure in the closed-ended space.

Elliott points to a strong month for share price returns in the sector as investors sought safe havens following the Brexit vote and expectations of a cut in interest rates grew, prior to the eventual move by the Bank of England last week.

“Eight out of the 13 funds [in the infrastructure sector] returned more than 5% in share price terms during July and all but two funds returned more than 2%,” he added.

Given the problems facing open-ended funds, it is interesting to note that the sector average for UK property narrowed sharply from 12.4% to 7.9% during July.

As Portfolio Adviser found last week, expectations now are that commercial real estate values will be far more resilient than the post-Brexit doomsday scenario some initially feared.

More than one commentator has singled out the creation of a good buying opportunity in the sector, though it is closed rather than open-ended funds that could be the big beneficiaries.

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