As we look into 2023, its clear that some of the biggest themes of the last year will continue to dominate the agenda. With inflation soaring, and the UK officially in recession, our managers will be keeping a sharp eye on how these factors develop, but it’s important for investors to know that its not all doom and gloom in the months ahead. These conditions affect every company differently, which presents ample opportunity for those managers who take a genuinely active approach, who prioritise true stock-picking and who know where to look to find value in the market.

Investment trusts possess several characteristics that make them particularly well-suited to this environment. Their ability to utilise revenue reserves affords them greater resilience in delivering reliable dividends to their investors which is more important than ever at times like these. They are also uniquely positioned in their ability to make use of permanent capital and leverage facilities, which allows portfolio managers to act quickly and decisively when they sense the inflection point in the market, unlike their open-ended counterparts who are inhibited by the time-lag of fresh capital associated with building investor confidence.

Beyond the challenging market conditions, there are plenty of things for the investment trust industry to be excited about in the year ahead.

As a sector, we are on a positive trajectory in terms of improving board composition by addressing skills gaps and working to cast a much wider net in terms of attracting diverse talent. Shareholder engagement will also remain a big focus for us as we continue to encourage and support investors in making sure their voices are heard.