Full Video Transcript Below:
Aubrey Citadel is a defensive fund that invests in investment-grade bonds and defensive undervalued equities and defensive undervalued alternatives. We are looking for defensive assets that we can buy on attractive value terms that have catalysts that can change the investment outlook for the better, in some cases significantly. Ideal assets for us at the moment are infrastructure assets. These are defensive assets with inflation protection. They have repriced for higher interest rates and their prices are at deep discounts to their net asset value. So in terms of equities, I’m currently very positive on Japanese and Korean equities. Both markets demonstrate real quality and real value, which is an unusual combination at the moment. And both have strong catalysts, both on improving corporate governance that is going to drive real shareholder value.
They are also benefiting as the West reduces its exposure to China, both Korea and Japan offer good alternatives to Chinese production and manufacturing. I think we have got a really interesting opportunity set at the moment because a whole range of sectors that we might like to have exposure to because of its innate defensive and inflation protected characteristics Are looking very attractive for a whole range of reasons. So we have got the investment trusts and the alternatives sitting at deep discounts. So that’s one strong opportunity set we have got the defence sector That is has been under invested in for a long period of time. We have got the gold miners that are going to benefit as from the whole move away from the dollar towards gold as the new reserve currency, or certainly at the very least as the least worst alternative to the dollar.
So in addition to that, we have got energy with the botched energy transition. We have got general investment trust discounts for equity funds that have moved out to, its not just on alternatives, its on a range of equity and also defensive funds. So there is value and opportunity on that side. And then we have looked just on the bonds. So, you know, there is scope for us to have catalysts on the bonds with both our Norwegian government bonds and the rupee bonds that we have got exposure to via Supranational, which is AAA rated, giving us six and a half percent yields. plus rupee upside. And I think there is scope for currency benefits, there is scope for discount benefits, we are getting high yields, and there is a whole range of catalysts coming through on the equities that we own.
Companies like Drax, where all the bad news seems to be in the price, all the good news that has come out over the last quarter seems to be ignored. And we are getting an attractive yield plus significant upside optionality at a very attractive price. That sort of upside optionality from a defensive valuation I think is the opportunity set, is the real opportunity that this fund provides at the moment.
Disclaimer:
This video has been issued by Aubrey Capital Management Limited which is authorised and regulated in the UK by the Financial Conduct Authority and is registered as an Investment Adviser with the US Securities & Exchange Commission. You should be aware that the regulatory regime applicable in the UK may well be different in your home jurisdiction.
This video has been prepared for information purposes and is not a solicitation, or an offer to buy or sell any security. The information on which the video is based has been obtained from sources that we believe to be reliable, and in good faith, but we have not independently verified such information and no representation or warranty, express or implied, is made as to their accuracy. All expressions of opinion are subject to change without notice. Any comments expressed in this video should not be taken as a recommendation or advice.
Please note that the prices of shares and the income from them can fall as well as rise and you may not get back the amount originally invested. This can be as a result of market movements and of variations in the exchange rates between currencies. Past performance is not a guide to future returns and may not be repeated. Aubrey Capital Management Limited accepts no liability or responsibility whatsoever for any consequential loss of any kind arising out of the use of this video or any part of its contents.
This video does not in any way constitute investment advice or an offer or invitation to deal in securities. Recipients should always seek the advice of a qualified investment professional before making any investment decisions.
