Seneca Global Income & Growth Trust’s (SIGT’s) manager, Seneca Investment Managers (Seneca IM), has continued to reduce SIGT’s equity weighting, in advance of a global recession it now expects in late 2020/ early 2021. Consistent with its view, SIGT has made its first allocation into gold (through a gold exchange traded fund (ETF) and a fund of gold mining companies)… Read more
SIGT’s managers expect the new gold allocation to provide a hedge against the inflationary monetary stimulus that central bankers typically undertake during a recession. SIGT’s managers believe that the end of the economic cycle may be closer than was previously thought (see page 3), but it expects its multi-asset strategy to strongly outperform equities in the downturn, although during such a period the trust would struggle against its absolute return-orientated benchmark.
Multi-asset, low volatility, with yield focus
Over a typical investment cycle, SIGT seeks to achieve a total return of at least the Consumer Price Index (CPI) plus 6% per annum, after costs, with low volatility and with the aim of growing aggregate annual dividends at least in line with inflation. To achieve this, SIGT invests in a multi-asset portfolio that includes both direct investments (mainly UK equities) and commitments to open- and closed-end funds (overseas equities, fixed income and specialist assets). SIGT’s manager uses yield as the principal determinant of value when deciding on its tactical asset allocation and holding selection.
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