Merchants trust makes bullish bet on energy and mining firms

Era of ‘cheap money’ is over

clock • 2 min read
Shell Gannet Alpha oil platform in the North Sea (Photo - Shell-EPA)

Shell Gannet Alpha oil platform in the North Sea (Photo - Shell-EPA)

Merchants trust has rotated into a range of energy and mining companies as rising inflation and interest rates bring an end to the era of “cheap money”.

Manager Simon Gergel told Investment Week that the 133-year-old trust has continued to top up its position in firms across the sector, arguing that the surge in commodity prices twinned with spiralling inflation had bolstered the outlook for these companies. Shell, Scottish & Southern Energy, Drax Group and Rio Tinto take up some of the equity income trust's largest positions, and at the end of April, 9.5% of the trust was invested in the energy sector. R&M's Sergeant: 'There are a huge number of anomalies for value managers to exploit this year' Despite pressures to divest away fr...

To continue reading this article...

Join Investment Week

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now


Already an Investment Week