Top 10 Investment Trusts

Which closed-end funds are favoured by Morningstar readers? We reveal the most popular investment trusts as voted for by you

David Holder 5 November, 2015 | 3:35PM

UK Equity Income funds have been the most popular areas for UK retail investment in eight of the last 12 months. Investors clearly remain very focused on the importance of deriving income from their investments. Whether it is from Murray International Trust, with a 5.33% yield, with its material weighting to Asia and Emerging Markets, The City of London Investment Trust yielding 3.93%, with its cautious approach to investment in predominantly UK equities or the concentrated and extremely patient approach followed at Finsbury Growth & Income Trust, yielding 2.07%, the trend is very clear.

Whilst all of these Morningstar Gold rated investment companies offer investors differing approaches to investment the one thing that they all have in common is that they benefit from some of the very best managers of their generation whom we continue to hold in very high regard at Morningstar.

Scottish Mortgage (SMT)

This gold rated trust remains one of our favourites for global equity exposure.

The fund is run by an investment veteran James Anderson, who is further supported by Tom Slater. In fact, Slater’s involvement here has been increasing and between July 2013 and Jan 2014, when Anderson was on sabbatical, Slater was in sole charge of the fund. The duo can also draw on the wider investment team at BG, comprising nearly 80 investment professionals, as well as seven research specialists who serve this wider group.

Murray International (MYI)

Aberdeen’s focus on quality, and its unconstrained, long-term investment approach, means this Gold Rated trust typically lags momentum-driven markets where low-quality names rally the most, but overall this is an excellent offering that is head and shoulders above most peers in terms of consistency and delivery.

Finsbury Growth & Income (FGT)

We think Finsbury Growth & Income is a standout. For one, it features an experienced, talented, and pragmatic manager. Nick Train draws on his three decades of expertise, which cover a number of market cycles.

Jupiter European Opportunities (JEO)

We think Jupiter European Opportunities is a compelling choice for European equities. 

Since the fund's launch in 2000, it has returned 13.2% annualised, some 8 percentage points more than its average Europe flex-cap equity Morningstar Category peer.

City of London (CTY)

We think City of London is a standout. There are several reasons we have such conviction in the fund. Job Curtis has been at the helm for more than 20 years—a length of tenure that’s rare to see. His involvement with the fund dates back to his time at Touche Remnant, which was acquired by Henderson in 1992, although he officially took charge in July 1991.

Witan Trust (WTAN)

Witan Investment Trust is serving its shareholders well. Andrew Bell became the manager/chief executive officer here in Feb 2010; he brings many years’ experience in asset allocation and research, including a spell as head of investment trusts at BZW. He has less experience in actually managing money, but given the structural changes he’s made here, in conjunction with the board, that’s less of a concern to us.

Standard Life UK Smaller Companies (SLS)

We think Standard Life UK Smaller Companies is a strong offering. Fund manager Harry Nimmo remains a key strength. He is an experienced small-cap investor who has managed money in this style through a variety of market cycles.

He has run this fund since September 2003 and its open-ended sister fund since 1997, remaining true to his philosophy throughout.

Woodford Patient Capital Trust (WPCT)

The trust aims to gain long-term capital growth through investing in a diversified portfolio consisting predominantly of UK companies, both quoted and unquoted. The company will aim to deliver a return in excess of 10% a year over the longer term.

Biotech Growth (BIOG)

We think Biotech Growth Trust is a strong choice for investors looking for a dedicated sector fund.

Firstly, it has a strong management team whose depth of knowledge and experience in this sector is one of the best, in our view. Manager Richard D. Klemm brings industry as well as investment experience, having completed extensive studies in molecular biology, molecular and cell biology and economics.

Edinburgh Investment (EDIN)

Investors are in safe hands at Edinburgh Investment Trust. Although Mark Barnett is a new face at the fund, his tenure at Invesco Perpetual exceeds 18 years and throughout that time he worked alongside the fund’s former manager, Neil Woodford.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Biotech Growth Ord777.02 GBX-1.39
City of London Ord426.70 GBX-0.42
Edinburgh Investment Ord584.31 GBX-0.63
Finsbury Growth & Income Ord933.98 GBX-0.43
Jupiter European Opportunities Ord839.17 GBX-1.16
Murray International Ord1,166.66 GBX-0.46
Scottish Mortgage Ord549.67 GBX-1.14
Standard Life UK Smaller Co. Ord484.19 GBX-0.68
Witan Ord219.50 GBX-0.90
Woodford Patient Capital Trust54.84 GBX-0.29

About Author

David Holder  is a senior investment research analyst at Morningstar

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