What caught my eye this week.
Robinhood is planning to launch [1] a publicly traded fund to enable US investors to gain exposure to unlisted companies like SpaceX and Stripe.
It reminded me that this is one area where we UK investors actually have it better.
Similarly, the news of another soon-to-be listed venture fund in the US from an outfit called Powerlaw [2]. It’s an investor in the likes of OpenAI and bleeding-edge weapons maker Anduril.
These kinds of risky but potentially revolutionary startups are meat and potatoes for Baillie Gifford, the Scottish manager that runs investment trusts like Scottish Mortgage and Edinburgh Worldwide.
And to my mind the investment trust structure is the ideal vehicle for holding private companies for the long term. It sidesteps the liquidity issues you inevitably get with open-ended funds that hold illiquid assets. And a trust’s transparency requirements and independent board of directors mean – at least in theory – extra safeguards for ordinary shareholders.
Ironically though, a big reason the investment trust sector has been under pressure for the past few years is precisely because some trusts have large holdings in unlisted companies!
Even storied RIT Capital still trades on a discount [3] to net assets of over 25%, largely on account of its private holdings.
And this despite a track record of private investments previously delivering good returns for the fund.
Trusts worthy
The absolute amounts managed by such trusts is tiny in the grand scheme of things. Mighty Scottish Mortgage – by far the biggest – has an asset base of just £15bn. Many others – such as titchy Augmentum [4] – manage only a fraction of that.
It wouldn’t take much new money flowing in for such trusts to grow. In an ideal world I think they would be gently expanding, not facing existential pressures [5] for survival.
Of course they must deliver returns that make holding the trust worthwhile in the long run. Discount risk is a headache for many everyday investors, too.
But the trusts do offer genuinely different exposure (compared to say a trust that owns FTSE 100 stocks) and I think we take them for granted.
Investing in private assets is not for everybody today. But there’s an argument [6] to be made that one day it could be. Public markets globally are shrinking. We’ve also seen the rise of multi-hundred billion dollar unlisted ‘start-ups’ that most investors have zero exposure to – and hence do not benefit from.
Hopefully we’ll still have a vibrant investment trust sector to serve private investors if and when we need them!
Have a great weekend.
From Monevator
Returns aren’t average – Monevator [7]
Investing in the face of AI: beauties or the beasts? – Monevator [8] [Mogul members [9]]
From the archive-ator: Gagadom and The Grim Reaper – Monevator [10]
News
Lower food and fuel prices drive inflation down to 3% – BBC [11]
Record-breaking budget surplus as government’s tax income rises – Sky [12]
Household energy bills forecast to fall by £117 a year – Guardian [13]
UK unemployment hits highest rate for nearly five years – BBC [14]
Small investors in Brewdog reeling as brewer put up for sale – This Is Money [15]
Man receives £42,000 bill for data roaming charges in Morocco – Guardian [16]
Supreme Court rules Trump’s ’emergency’ tariffs are illegal… – CNN [17]
…and Trump announces immediate 10% global tariff after the rebuke – Sky [18]
UK flat prices fall after sharp drop in London [Paywall] – FT [19]
[20]
Record number of buy-to-let limited companies set up in 2025 – This Is Money [21]
Products and services
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Are you ready for HMRC’s Making Tax Digital self-assessment shakeup? – Guardian [22]
Natwest offers £150 switching bonus and a 7% savings rate, with a catch – This Is Money [23]
Should you use a mortgage broker to get a mortgage? – Which [24]
Get up to £1,500 cashback when you transfer your cash and/or investments to Charles Stanley Direct through this affiliate link [25]. Terms apply – Charles Stanley [25]
The best auto savings hacks and apps – Be Clever With Your Cash [26]
Tides of tax drive high-earners to offshore bonds [Paywall] – FT [27]
Banks slash mortgage rates for first-time buyers with small deposits – This Is Money [28]
Password managers’ promise that they can’t access your vaults isn’t necessarily true – Ars Technica [29]
Get up to £3,000 cashback when you open or switch to an Interactive Investor [30] SIPP. Terms and fees apply, affiliate link – Interactive Investor [30]
Tembo HomeSaver review: 5.75% if you’re saving for a house [Catches!] – B.C.W.Y.C. [31]
Five ways that AI could be reshaping your relationship with money – The Conversation [32]
Does your car insurance really cover stolen possessions? – Which [33]
Homes for sale with luscious lawns, in pictures – Guardian [34]
Comment and opinion
The brutal hunt for low-paid work: “It’s like the Hunger Games” – Guardian [35]
Inflation matters more than returns to retirees – White Coat Investor [36]
“Why I’m telling my kids to saddle themselves with student debt” – This Is Money [37]
Is it better to rent or buy when you retire? [Paywall] – FT [38]
Young Britons on why they’ve left to work abroad – Guardian [39]
AI comes to FI – FIRE v London [40]
Don’t major in minor things – A Teachable Moment [41]
The best strategies for boosting starting withdrawals in retirement – Morningstar [42]
US equities are still 40% more expensive than non-US equities – Apollo [43]
Escaping the permanent underclass may not be necessary – Financial Samurai [44]
Active managers keep losing as passive investing grows – Larry Swedroe [45]
Naughty corner: Active antics
The eternity of intelligent investment – Kingswell [46]
How to be one of the less terrible retail investors – Morningstar [47]
Fund beating 99% of peers says few software firms will survive AI – Bloomberg via Yahoo [48]
Let’s talk about the new Berkshire Hathaway – Brooklyn Investor [49]
Mad money and the big AI race – OM [50]
Bayes and base rates [Nerdy, PDF] – Morgan Stanley [51]
Kindle book bargains
The Wealth Ladder by Nick Maggiulli – £0.99 on Kindle [52]
How to Work Without Losing Your Mind by Cate Sevilla – £0.99 on Kindle [53]
Million Dollar Weekend by Noah Kagan – £0.99 on Kindle [54]
The Retirement Handbook by Ted Heybridge – £0.99 on Kindle [55]
Or choose an investing classic – Monevator shop [56]
Environmental factors
Plug-in hybrids use three times as much fuel as claimed, analysis finds – Guardian [57]
China is killing the fish – Noahpinion [58]
Environmental groups sue Trump’s EPA over repeal of climate finding – Guardian [59]
The curse of dead coral – Biographic [60]
Robot overlord roundup
Why AI writing is so boring and dangerous: semantic ablation – The Register [61]
The AI disruption we’ve been waiting for is here – NYT [62] [h/t Abnormal Returns [63]]
AI takes a swipe at the online dating scene – PitchBook [64]
Video game experts says Google’s Project Genie isn’t an industry killer – Sherwood [65]
The AI productivity takeoff is finally visible [Paywall] – FT [66]
Not at the dinner table
The UK’s trade after Brexit: not pretty – Klement on Investing [67]
How Brazil stopped a Trump-style authoritarian in his tracks – Vox [68] [h/t Abnormal Returns [63]]
Trump’s new world order is real and Europe is having to adjust fast – BBC [69]
The grift economy is going mainstream – Your Brain on Money [70]
Trump’s relentless self-promotion fosters an American cult of personality – NYT [71]
Office versus work-from-home mini-special
The end of the office – Andrew Yang [72]
Younger companies and leaders embrace more remote work, study finds – Sherwood [73]
The worse-case scenario for white-collar workers – The Atlantic [74]
US office market is as K-shaped as the US economy – Bloomberg [75] via A.P.
Off our beat
Why Europe doesn’t have a Tesla – Works in Progress [76]
The biggest myths about attraction, debunked by science – Next Big Idea Club [77]
Cringeworthy in the future – Kevin Kelly [78]
And finally…
“I had thought the destination was what was important, but it turned out it was the journey.”
– Clayton Christensen, How Will You Measure Your Life? [79]
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