Midas’s Income and Growth investment trust manager Alan Borrows has reduced his exposure to fixed income after divesting a holding in an M&G fund and trimming several others.
The manager of the £65.3m multi-asset trust said he had removed the M&G European Loans fund and reduced holdings in the Axa US Short Duration High Yield Bond and Royal London Sterling Extra Yield Bond funds.
Mr Borrows used the proceeds to purchase a holdings in CVC Credit Partners, a closed-ended fund which provides exposure to senior secured loads in Europe.
The manager said the asset class would benefit the portfolio because senior loans are “immune long term inflationary pressure” and offered “participation to any increase in interest rates”.
Elsewhere, the manager has also rejigged his equity exposure after purchasing a stake in the Liontrust Asian Equity Income fund which he said “compliments other holdings in the region and offers a distinctive stock driven approach together with a strong emphasis on income generating stocks”.
Mr Borrows has also added a smaller position in British Empire Securities Trust because of the “attractive discount” the trust’s shares traded compared to the net value of its assets.
The manager has also backed BlackRock’s Evy Hambro and Catherine Raw after adding to the pair’s £947.5m World Mining trust.
“Additional investment was committed to Blackrock World Mining, as the discount to net asset value we felt was likely to narrow with the investment policy operated by the managers moving towards a more income orientated strategy,” Mr Borrows said.
“We were also attracted to increasing commodities exposure, given how out of favour they had become with investors over the past two years.”
Mr Borrows said funding for the purchases came from the sale of Ecofin Water & Power “following a prolonged period of disappointing performance” and a reduction in the Lindsell Train Japanese Equity fund where “strong performance and yen hedging had produced a significant uplift in value in the past 12 month period”.