Trustnet Magazine Issue 46 December 2018 | Page 36

In focus [ 2019 OUTLOOK ] 34 / 35 Adam Lewis finds fund managers bracing themselves for an uptick in volatility as he sums up the outlook for every regional investment trust sector in 2019 The UK Fasten your seat belts I nterest-rate rises and the return of volatility were the dominant themes in 2018. After a period of calm, markets plummeted in February, prompting asset allocators to adopt defensive positions. Closer to home, Brexit uncertainty continued to abound, leading to outflows from domestic UK equity portfolios. With these questions unresolved, 2019 looks set to be another eventful year. So what are managers doing with their portfolios and what are the best investment trusts to help you navigate the coming 12 months? Heading into 2019, Toby Ross, co-manager of the Baillie Gifford- managed Scottish American Investment Company (SAINTS), says his focus remains exactly where it was in 2018 and the year before: namely the most resilient sources of income and growth. As a result, he is concentrating less on what is happening with global monetary policy FE TRUSTNET and politics and more on bottom-up stock selection. SAINTS’ global mandate means it can invest anywhere in the world; it currently has little domestic UK exposure, focusing instead on large caps that derive the majority of profits from overseas.  “We own Admiral, which has some domestic exposure and some international earnings, but this is not a stock which will be driven by Brexit concerns, because Brexit will not make a difference to your decision about insuring your car,” says Ross. “However, more generally we have more money in more global, high-quality UK growth businesses, which aren’t likely to get trustnet.com