Global Opportunities Trust is finding investment opportunities in overlooked international markets as investor concentration in artificial intelligence stocks raises questions about valuations and portfolio risk.
Manager Alan Bartlett believes companies outside the dominant AI theme can deliver the trust’s targeted annual return of 10%, without the same exposure to potential losses if expectations for AI adoption disappoint.
The argument comes as technology stocks account for an increasingly large share of major equity indices, leaving some established businesses and smaller companies overlooked. For Global Opportunities Trust, this creates opportunities to invest in companies where market valuations do not fully reflect their underlying assets or earnings potential.
Japan is one area of interest. Bartlett highlights Katakura, a Japanese property business trading at a significant discount to the value of its underlying assets. He also sees opportunities among domestically focused Japanese small-cap companies, where valuations remain low and returns may be less closely linked to global equity market movements.
The trust’s approach extends beyond property and smaller companies. Defence is another area of interest, with government spending and geopolitical pressures supporting demand. Healthcare also offers potential long-term growth, driven by demographic trends and expanding demand in emerging markets. Rather than focusing on large pharmaceutical companies, the trust has identified businesses including Laboratorios Farmaceutico in Spain, Terveystalo in Finland and RaySearch Laboratories in Sweden.
The strategy reflects a broader search for returns beyond the most popular areas of the market. By focusing on company fundamentals, asset values and longer-term growth prospects, Global Opportunities Trust aims to identify businesses that may benefit if capital shifts away from highly valued technology stocks.
Global Opportunities Trust plc (LON:GOT) invests globally in undervalued asset classes without reference to the composition of any stock market index.
