Investors are hungry for high yields – so much so that a plethora of higher-yielding trusts investing in alternative asset classes has been launched over the past decade. These now account for around 45 per cent of assets under management by investment companies.
Share price discounts to net asset value have narrowed dramatically over recent years and are now increasingly vulnerable to market downturns
Investment trusts have had a great run over the past 10 years. The MSCI World index gained 195 per cent over the period, and many investment trusts performed even better.
Our annual tips offer an adventurous selection for seven broad categories of equity-oriented investment trusts, as well as for private equity and specialist trusts.
They also include a tip from each of three investment trust specialists who provide us with valuable research throughout the year.
Our annual tips offer a conservative and an adventurous selection for seven broad categories of equity-oriented investment trusts, as well as for private equity and specialist trusts. They also include a tip from each of three investment trust specialists who provide us with valuable research throughout the year.
Three experts whose research we find particularly helpful all made creditable choices for the last 12 months.
Simon Elliott, head of investment companies at Winterflood Securities, achieved the highest share price total returns with his pick of Monks Investment Trust, up 21 per cent.
BlackRock Emerging Europe (BEEP) seeks long-term capital growth by investing in companies doing business primarily in eastern Europe, Russia, central Asia and Turkey. Its shares are quoted in sterling, but its accounts are presented in US dollars. Its report for the year to 31 January 2018 shows shareholders’ assets of £145 million*. Sam Vecht has managed BEEP since May 2009, with Chris Colunga as co-manager since March 2016. The portfolio holds 20 to 30 high conviction holdings and derivatives are used for hedging and investment purposes.
BlackRock Latin American Investment Trust (BRLA) targets long-term capital growth by investing primarily in quoted securities in Latin America. In the year to 31 December 2017 it reports shareholders’ funds of US$280 million (£197 million). Will Landers has managed BRLA since March 2006. He favours mispriced/undervalued companies with proven management, good governance, good medium-term earnings prospects, plus strong balance sheets and cash flows. Investment decisions also incorporate a macroeconomic overview.
If leading stock markets maintain an upwards trajectory through the rest of 2018, the Association of Investment Companies’ 10-year performance tables could witness some significant changes.