City of London slid down the rankings slightly compared to January, possibly reflecting the less bearish attitude among investors in February compared to previous months.
Scottish Mortgage continued to dominate the list of the most popular investment trusts among clients of our parent company interactive investor. The trust’s three-year return currently stands at 100.6%.
City of London slid down the rankings slightly compared to January, possibly reflecting the less bearish attitude among investors in February compared to previous months. City of London is often held as a safe, reliable income-payer. It may also have been impacted by continuing negativity towards the UK among investors in the run-up to Brexit.
Re-entering the rankings were Fidelity China Special Situations and JPMorgan Emerging Markets. Both emerging markets and China faced a tough year in 2018 on the back of trade war fears and US dollar strength. For brave investors, this made for a good buying opportunity. However, as fears over China and emerging markets have eased, it would appear that more have bought the upside with the two trusts.
Those who opted for Fidelity China Special Situations were likely best rewarded, with the trust returning shareholders around 12% over the month.
February saw a number of new trusts joining the top 10. The Renewables Infrastructure Group made an appearance. It was added to Money Observer’s Rated Fund list for the first time in 2019, replacing Bluefield Solar Income, and currently yields around 5.5%.
The trust invests in renewable energy infrastructure, buying assets depending on where the most attractive subsidy regime for renewable energy is at a given point. Over the past three years the trust has provided investors with a 41.7% return.
Two new global trusts also joined the list. One was 2019 Rated Fund Bankers Investment Trust, which provides global large company exposure and is managed by Janus Henderson. The trust has separate portfolios for each region, each run by the relevant regional specialists. Its three-year return stands at 60.7%.
Its fellow Rated Fund F&C Investment Trust, which takes a highly diversified approach to a global mandate, is also in the rankings, at number eight.
Finally, Dunedin Enterprise makes an appearance. This represents something of an anomaly in terms of reflecting current macro sentiment, as the private equity-focused trust is currently in the process of winding up. That means it is currently selling its holdings and returning the proceeds’ net asset value to shareholders. This presents a potential profitable trade for investors who are able to buy into the trust at around 10% discount to net asset value.
However, warns Simon Elliott, head of investment trust research at Winterflood, investors should exercise some caution: “Be careful, investors can be left in a trust with the stuff that can’t be sold. Attractive holdings are sold first.”
Baillie Gifford Shin Nippon, a staple of the most-bought list in 2018, found itself completely out of the rankings in February.
|Investment trust||AIC Sector||Rank change from previous month||1-month return % (as of 4 March 2019)||3-year return %|
|Scottish Mortgage||Global||No change||1.4||100.6|
|Smithson||Global Smaller Companies||1||5.5|
|Finsbury Growth & Income||UK Equity Income||1||2.8||43.1|
|City of London||UK Equity Income||-2||2.3||25.7|
|The Renewables Infrastructure Group||Sector Specialist: Infrastructure - Renewable Energy||new entry||1.4||41.7|
|Dunedin Enterprise||Private Equity||new entry||6.7||114.7|
|Fidelity China Special Situations||Country Specialists: Asia Pacific||new entry||12.2||86.1|
|Bankers Investment trust||Global||new entry||3.1||60.7|
|JPMorgan Emerging Markets||Global Emerging Markets||new entry||0||70.1|