Wealth Preservation Trusts Fall Short of Inflation Bites

Investors who turned to wealth preservation trusts during the past five years have been disappointed. The UK inflation rate, measured by the consumer price index (CPI), has averaged 5% per year or 27.5%. In contrast, Personal Assets Trust (LSE: PNL) has seen its net asset value rise only 20.8%, equivalent to a 3.85% annual gain. Ruffer (LSE: RICA) and Capital Gearing (LSE: CGT) have also underperformed inflation, with returns of 20% or 3.7% per year, and 11.5% or 2.2% per year respectively.

The performance of these trusts has been particularly notable as they were chosen by investors seeking to protect their assets from rising prices. However, their lackluster results have left many investors wondering if they can recover from this underperformance. The trust's reliance on a diversified portfolio and low-risk investment strategies may be contributing factors.