Investment Company plc

Since Dowgate Wealth assumed management of the Company's portfolio at the end of July, the themes underpinning our investment approach have moved from the margins to the front pages. The joint Japanese and US intervention to support the yen, followed by the US Treasury's increased bond-repurchasing plans to retire bond duration ahead of a long-dated auction has contributed to reviving the so-called debasement trade, dormant for much of the past several months. Meanwhile, re-shoring activity and continued investment in AI infrastructure may add to demand for capital at a time when governments continue to have significant borrowing requirements. In the Manager's view, these factors could contribute to an environment in which interest rates and inflation remain higher for longer than markets have experienced in recent decades. Re-shoring on a significant scale is also likely to require substantial investment over an extended period. EY-Parthenon, as reported by the Financial Times, has estimated that fully re-shoring Western manufacturing could cost approximately $23 trillion and take around 25 years. Against this backdrop, longer-dated government bond yields have remained elevated, while gold, Bitcoin and other assets perceived by some investors as alternative stores of value have experienced a period of renewed strength. These developments are consistent with the Manager's investment approach that preserving purchasing power through a period of economic and geopolitical realignment requires meaningful, foundational exposure to real assets. We met our initial target allocation to foundational reserves in the first two weeks, comprising 30% in Gold & 5% in Bitcoin. We remain patient on equities and it is the team's strategy to look for possible weakness around the US midterm elections, as an opportunity to build the strategic equity sleeve toward our framework weighting. The Company's closed-end structure allows the Manager to hold these positions through volatility and make procyclical decisions. It is our view that gold is a strong store of value in a fracturing monetary system, and we see Bitcoin as a complementary, energy-based neutral reserve asset closely tied to global liquidity conditions. The equity sleeve complements this defensive core by adding a selective group of hard-to-replicate assets that we believe can earn returns ahead of future monetary debasement.