When the Trump administration unleashed its punitive trade tariffs on 2 April, there were few places to hide.

Amid the global stock market sell-off that followed, a handful of defensive ‘all-weather’ investment trusts came to the fore with positive share price moves or moderate falls. 

According to broker Deutsche Numis, in the three days following ‘liberation day’, the discount at Ruffer Investment Company (RICA ) narrowed by as much as 5% as buyers looked for safe havens, while BH Macro (BHMG ) narrowed by 2%. 

Looking at short-term performance of the underlying portfolios is complicated by the fact the duo release weekly rather than daily portfolio valuations. But according to net asset value (NAV) updates both released on 15 April, Ruffer’s portfolio is basically flat month to date, while volatility-loving BH Macro has returned 2.1% in sterling.

Looking at their share price performance since 2 April, along with close peers Capital Gearing (CGT ) and Personal Assets (PNL ), we can see the classic defensive trusts have held up well.

The best performance has come from BHMG, with a more than 5% gain to yesterday’s close. Although it should be noted that BH Macro has still seen the worst year-to-date performance with a 2.7% fall, while RICA’s shares have returned the most at 4.4%. 

Also noteworthy is that RIT Capital Partners (RCP ), which has higher exposure to equities but is often considered a kindred spirit, is having another tough year. Its shareholders are down 7.4% in 2025, while the discount stands at 28%, which Deutsche Numis said makes it ‘attractive’ in this environment. 

In light of the interest in protective and absolute return strategies, both Deutsche Numis and Investec have released research summarising their views on the defensive trusts. 

In a complex and fast-moving situation, Investec noted there is a risk of an escalating trade war and a deterioration in the global economic outlook at a time when global growth is already sluggish and the US economy is losing momentum. There’s also the potential for higher inflation or so-called stagflation.

Invesctec also summarised the overall asset allocation of three of the trusts below. 

Source: Investec

BH Macro 

Source: Investec

BH Macro is a £1.3bn feeder fund that invests most of its assets into the $11.4bn (£8.6bn) Brevan Howard Master Fund. This hedge fund strategy is predominantly exposed to the global bond and currency markets via a combination of macro and relative value trading strategies. 

Deutsche Numis broker Ewan Lovett-Turner noted that BH Macro has a track record of delivering strong returns in weak markets and is typically ‘long volatility’, although a lack of disclosure and rapidly changing positioning means it is impossible to know its exposures. 

The trust traded on a double-digit discount for the first time in many years in 2023 after a sharp reversal in interest rate expectations. This caused its share price to fall 18.6% in 2023. Throughout 2024, the fund bought back approximately £116m of shares to narrow the discount. 

Investec, who are backers of the trust, explained: ‘BHMG has consistently demonstrated a low correlation with both equities and bonds, and notably, during times of elevated market distress, the correlation with equities has inverted and been most pronounced.’

Today, the shares trade on a discount of a 6% discount to net asset value (NAV), according to Deutsche Numis. 

Citywire columnist David Stevenson recently expressed surprise at that discount, given the strong record during volatile periods. 

Personal Assets

Source: Investec 

Personal Assets Trust also aims to provide a degree of protection in challenging markets. Troy Asset Management founder Sebastian Lyon and newly promoted Charlotte Yonge co-manage the £1.6bn trust, alongside the £5bn Trojan Fund. 

Both funds make long term investments across a range of assets, primarily developed market equities, bonds, gold-related investments and cash. 

Talking to Citywire last month, Yonge said the trust is ‘well positioned in terms of [its] liquidity’ to adjust its equity exposure (currently around 30%) at short notice. For example, during the cornavirus pandemic, this opportunistically increased from 30% to 45% in the space of a couple of weeks.

The maximum share price drawdown, or single sustained fall, since Troy’s appointment to the trust in 2009 has been 12%.

According to Lovett-Turner, the trust should be well-protected against further market volatility, given its ‘low equity exposure compared to history’, its preference for inflation-linked bonds, with 32% in US TIPS, and an 11% allocation to gold bullion.

While there is little discount risk due to the trust’s policy of maintaining a near-zero discount, Investec analyst Elliott Hardy noted ‘the NAV has historically experienced slightly greater participation in more severe downturns than peers.’ 

Ruffer

The Ruffer management team, made up of Jasmine Yeo, Ian Rees and Alexander Chartres, has been vocal in recent weeks in forecasting the end of American exceptionalism. 

After a couple of ‘painful years’, in which the near £1bn trust suffered amid surprisingly strong equity markets, its managers are at last reaping the rewards of their protectionist approach. 

The trust predominantly invests just under 30% in equities, with its top holdings being the iShares MSCI China ETF, BP, Prudential, Amazon and Alibaba, according to the latest factsheet. 

It also holds 15% in an ‘inflation’ bucket, including gold, precious metals and long-dated UK inflation-linked bonds. The remainder of the portfolio is in other ‘protection’ assets, including short-dated bonds, cash, and credit and derivative strategies. 

Lovett-Turner expects that these protective assets ‘should help [the trust] be resilient in the current market turmoil, given it has highlighted being positioned as the “antithesis” of market excesses, with low net equity exposure and circa 40% of the portfolio in short-dated government bonds.’ 

He added that around 77% of the portfolio is in sterling, which ‘might be more useful in more volatile currency markets’.

In Hardy’s view, the key differentiating factor for Ruffer is its ‘willingness to use derivatives to enhance returns through strategic and tactical allocation tilts’. 

‘Since the start of 2020 to 31 March 2025, protection strategies have contributed 18% to performance, including 7.1% from credit, 6.8% from swaptions, 3.2% from VIX call options and 1% from equity downside put options,’ he said. 

Although, he added the caveat that this ‘additional flexibility’ has come at a cost of around 8.7% over the last two calendar years.  

RICA’s current discount stands at 4.2%. 

Capital Gearing 

Peter Spiller, chief investment officer of CG Asset Management, has run the trust since 1982, during which time its market capitalisation has risen from less than £1m to in the region of £850m. He now co-manages Capital Gearing with Chris Clothier and Alastair Laing.

In Hardy’s view, ‘the depth of resource is not as great as that of Ruffer and, to a lesser extent, Troy, and there is a key man risk associated with Peter Spiller’.

The Investec analyst added: ‘That said, ideas filter up to Peter and Chris on an ongoing basis, and it is this process that has delivered the company’s long-term performance track record’. 

CGT seeks long-term absolute returns through a global portfolio of primarily equities and bonds. Like Personal Assets, there is a particular focus on inflation-linked debt. 

As of last month, CGT held about 29% in equities, 9% in corporate credit, 20% in conventional government bonds, a further 38% in index-linked government bonds, 1% in gold, and 3% in cash. 

The largest equity holdings were the JPMorgan Japan ETF and the Vanguard FTSE 100 ETF, although a distinctive feature of the portfolio is a long tail of investment trust holdings, such as North Atlantic Small Companies (NAS ). 

Two other notable features of the trust, according to Hardy, are its low costs, due in part to a relatively simple investment approach, which means no derivatives exposure and no short selling, as well as its tight discount control mechanism. 

Lovett-Turner highlighted the trust’s liquid portfolio. ‘Short dated inflation-linked bonds (UK or hedged to sterling) and Japanese government bonds have provided protection, with around a third of the portfolio now in “dry powder”,’ he said. 

He also highlighted that much of the trust’s equity exposure is via closed-end funds, notably infrastructure investment companies, which have been ‘relatively resilient in recent days, after historic weakness.’