Top 10 most popular investment trusts – April 2018

Funds and Investment Trusts May 4, 2018 by Tom Bailey

Despite a volatile month for equity markets, the investment trusts bought in April remained largely unchanged from the previous month, according to the data from our sister website, broker interactive investor.

Once again, trusts managed by Baillie Gifford made a strong showing in April, with Scottish Mortgage and Baillie Gifford Shin Nippon being the two most-bought.

Scottish Mortgage had a stellar month, achieving one-month returns of 12.6 per cent – higher than many trusts returned over a whole year. 

Such a high one-month gain, however, is likely to be a one-off. Scottish Mortgage saw its share price rally on the back of strong performance of some of its holdings. Amazon, the biggest holding in its portfolio, surged after it reported expected quarterly profits of between $1.1 billion and $1.9 billion. At the same time, Baidu, the trust’s sixth largest holding, also helped boost Scottish Mortgage’s fortunes, with its share price rising by around 14 per cent.

Baillie Gifford Shin Nippon has seen relatively disappointing returns lately, which is partly the result of the continued underperformance of the Japanese market. Despite being widely tipped, Japan has been one of the most disappointing regions this year

However, perhaps thanks to its strong long-term performance, investors are still buying in droves. Over the past three years the trust has returned investors 154.1 per cent, the highest return of all the trusts in the top 10 most-bought table. 

Monks, also a Baillie Gifford-managed trust, also proved popular, rising by four places within the top 10. As with Scottish Mortgage, the trust is focused on global equities, including the strongly performing e-commerce giants Amazon and Alibaba.

Woodford Patient Capital, run by star manager Neil Woodford, had a mixed month in terms of performance. Towards the start of April it looked as if the trust had turned a corner, with promising news from a number of chunky holdings. However, this was soon scuppered by news that Prothena, which accounts for over 9 per cent of the trust’s holdings, had seen one of its drugs fail at two trial stages, causing its share price to crash. 

Woodford’s name and reputation, however, still appears to support his trust’s appeal for investors, as it is still one of the most popular trusts to buy. 

City of London edged up the table slightly, going from fourth most popular to third. A relatively defensive trust with a focus on income, City of London may be proving popular among investors concerned about market volatility. At the same time, the trust saw strong one-month returns, with its share price rising by 6.1 per cent as the long-unloved UK equity income sector saw a return to favour among investors. 

A new entry to the table this month was HICL Infrastructure. The trust, along with other trusts focused on infrastructure, went from trading at a premium to a discount over the past year, in part due to fears over what a Labour government could mean for public-private infrastructure contracts. 

Whether or not that risk has receded is uncertain – however, its roughly 4 per cent discount, compared to a 12-month average premium of 3.1 per cent, may have convinced many investors it is currently a bargain. 

 

Rank Investment Trust AIC Sector Change since March 1 month share price return to 3 May 3 -year share price return to 3 May
1 Scottish Mortgage IT Global -- 12.6% 86.1%
2 Baillie Gifford Shin Nippon Japanese Smaller Companies -- 1.7% 154.1%
3 City of London IT UK Equity Income +1 6.1% 20%
4 Woodford Patient Capital UK All Companies -1 -6.2% -29.5%
5 Allianz Technology Tech, Media & Telecomm -- 9.9% 111.4%
6 Monks Global +4 4.1% 82.5%
7 HICL Infrastructure Infrastructure new entry 7% 9.1%
8 Foreign & Colonial IT Global -1 6.1% 59.1%
9 Fidelity Japanese Values Japanese Smaller Companies new entry 5.4% 82.3%
10 Primary Health Properties Property Specialist new entry 4.5% 43.2%

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