The choice for Japan is very different, since Baillie Gifford’s Shin Nippon trust is invested in small, entrepreneurial companies, outside the moribund grip of the large international corporates, and so free to take advantage of Abenomics. Which of these two island-based societies will prosper over the coming decade? No forecast can tell, so that is the guess the investor must make.
Domestic options
Another way to hedge the future of the UK is to invest in the Perpetual Income and Growth IT, a successful trust investing in small UK companies that ought to do well in the post-Brexit era. But this choice, in turn, could itself be hedged by going global, via a similar holding in F&C Global Smaller Companies trust.
Many investors look with envy at the most high-profile Baillie Gifford trust, the FTSE 100-listed Scottish Mortgage. The trust’s managers long ago settled on technology as their sector of choice, not least the Fang (Facebook, Amazon, Netflix and Google) stocks, and ran these holdings all the way. But a manager clever enough to do that is also clever enough to be aware of regulatory risks to these companies, and to adjust the portfolio accordingly.
If this awareness is not enough to calm fears over technology, then the Personal Assets Trust may make for a wise complement. At the other end of the spectrum to Scottish Mortgage, the volatility of this portfolio is very low. This is because the overriding principle of Personal Assets is to secure the value of the shareholder’s money first, and only then try and maintain its value against inflation and a rising standard of living. In this regard it has been very successful indeed.
But those who voted Remain in 2016 may well wonder at the incompetence of the political class, and as a result question if the time has come to wave goodbye to the FTSE All-Share index entirely.
In that case, there are two global trusts with dividend hero status. Witan has a strong link between the board and the manager, and definite ideas on asset allocation. Alliance Trust, on the other hand, has chosen to rely completely on its investment adviser, Willis Towers Watson, which chooses a limited number of asset management companies to run the portfolio – each of these are limited to just 50 high-conviction businesses.
Yet if Remainers are to follow the advice given to young Americans to “go west, young man”, they might also allow themselves the exhortation to “go global and embrace technology”. In that case, the Worldwide Healthcare portfolio promises the products, while Polar Capital Technology offers the electronic plumbing that all such products need.
