220. Why a focus on capital gains can miss out on opportunities in income

Jason Borbora-Sheen, manager of the Elite Rated Ninety One Global Income Opportunities fund, takes a broad look across global asset classes in this far-reaching episode.He gives us his current and future outlooks for both the bond and equity markets, and how these have shaped the portfolio.He also comments on how the fund uses hedging to benefit the portfolio - in particular when it comes to gaining from emerging market debt - and tells us how consistency and reliability are key factors in their stock picks, and why investors who tend to focus on capital gains, may miss the opportunity that comes from income.
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Ninety One Global Income Opportunities fund invests conservatively around the world in a diverse range of equities and bonds. It can also invest a little in other assets and, overall, aims to achieve returns that are equal to, or more than, the rate of inflation +4% per annum (before fees are taken) over rolling 5-year periods. It also targets an income of 4% for investors.

What’s covered in this episode:

  • What’s happening in the equity and bond markets
  • Dollar v Sterling
  • Why the fund has halved its net equity exposure in the last 12 months
  • Why the fund’s duration has increased
  • How hedging currency exposure creates a differentiated performance profile
  • How reliability and consistency are key to stock picks
  • Why Daimler makes a good case for portfolio inclusion
  • A compelling outlook for income vs growth
This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice. Whilst FundCalibre provides product information, guidance and fund research we cannot know which of these products or funds, if any, are suitable for your particular circumstances and must leave that judgement to you. Before you make any investment decision, make sure you’re comfortable and fully understand the risks. Further information can be found on Elite Rated funds by simply clicking on the name highlighted in the article.

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