Investment trusts: the perfect vehicle for contrarians

If you were to design the perfect vehicle for a contrarian investor to use, it would look a lot like an investment trust, says John Stepek.

This week, it's all about investment trusts. If you're a regular reader, you'll know that we've always liked investment trusts. We explain exactly why in this week's issue. But to sum it up, we've always been a contrarian bunch at MoneyWeek, and if you were to design the perfect vehicle for a contrarian investor to use, it would look a lot like an investment trust.

Contrarians have to be patient, and can't be afraid to invest in unpopular areas investment trusts give the manager a permanent pool of capital to invest, which means they can make high-conviction bets without having to worry about jittery investors pulling out at short notice. Contrarians also like to get a bargain, and investment trusts often give you the chance to buy £1-worth of assets for a lot less than £1 particularly if sentiment has soured on a sector.

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John Stepek

John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.