283. Rolling with the punches in the face of uncertain inflation

In this interview, Richard Parfect, co-manager of the VT Momentum Diversified Income fund, gives an overview of where he believes the opportunities in the market lie today, highlighting high yield, emerging market debt and specialist assets. We then shift to a broader discussion around inflation and how that impacts the fund’s inflation target of CPI plus 5%. Finally, the conversation touches on a critical issue within the investment trust industry – the inclusion of investment company costs in the reported costs of funds. Richard expresses concerns about this practice, as it can create an uneven playing field for fund comparisons and lead to misleading cost figures. He stresses the need for transparency and common-sense adjustments in cost reporting to ensure investors can make better informed decisions. 

What’s covered in this episode: 

• The largest holdings in the VT Momentum Diversified Income fund
• How high yield and emerging market debt can be defensive
• Why the fund is leaning towards fixed income 
• The importance of specialist assets, including an airline leasing company
• The role of gold in the portfolio
• The fund’s inflation target of CPI plus 5%
• Managing expectations around inflation
• Synthetic costs on investment trusts
• Why trust costs could be misleading to investors

More about the fund:
The aim of the VT Momentum Diversified Income fund is to consistently generate a substantial income stream while also aiming to safeguard the long-term real value of capital. The fund managers adopt a value-focused investment style and have the flexibility to allocate across various asset classes, including both UK and international equities, fixed income, real estate, and specialist investments.

Learn more on fundcalibre.com

Please remember, we’ve been discussing individual companies to bring investing to life for you. It’s not a recommendation to buy or sell. The fund may or may not still hold these companies at the time of listening. Elite Ratings are based on FundCalibre’s research methodology and are the opinion of FundCalibre’s research team only.