Investment trust portfolios annual review - expert tips

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.

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Charles Cade, head of investment companies research at Numis Securities, picked HgCapital Trust, which did well within the private equity sector, gaining 18.6 per cent.

Alan Brierley, who leads the investment companies team at Canaccord Genuity, also did well given his defensive emphasis, as his selection of the sterling- denominated shares of BH Global hedge fund achieved a gain of 15.4 per cent.

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For the next 12 months, Cade picks Schroder AsiaPacific fund (SDP), which seeks to capitalise on Asian growth through a bottom-up approach. ‘Manager Matthew Dobbs invests in quality companies with good corporate governance, strong balance sheets and sustainable earnings, and has an impressive long term record,’ Cade says.

Elliott prefers SDP’s sister trust Schroder Asian Total Return (ATR), which has a similar five year NAV total return but a more nuanced approach and a much higher rating.

‘Managers Robin Parbrook and King Fuei Lee attempt to capture long-term growth trends in Asia, such as the rise in consumption, through benchmark-agnostic investments driven by fundamental research and the potential for absolute returns.

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In addition, they use hedging to reduce unwanted country and market exposure,' Elliott explains.

Brierley is sticking with BH Global (BHGG) as he remains cautious about prospects. ‘It is one of the few investment companies to offer a genuine low correlation with bonds and equities, with limited downside risk,’ he says.

‘In a risk-off environment, we believe its fortunes will be inversely correlated with those of risk assets. When this happens, any company that can preserve capital will have significant value.’  

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