Top 10 most popular investment trusts – May 2019

Woodford Patient Capital went up the rankings, while Scottish Mortgage, Smithson and City of London all held the same spots as the previous month.

Funds and Investment Trusts June 11, 2019 by Tom Bailey

Despite the market turmoil throughout May, the buying choices of investment trust investors largely remained the same, with Scottish Mortgage and Smithson the two most-bought trusts, according to data from interactive investor, our parent company.

Both trusts invest globally, with Scottish Mortgage holding a significant amount of global tech companies, leaving them more exposed than other trusts to a fallout of the US and China trade war as well as other risks to global growth.

Scottish Mortgage, for instance, lost 5.3% over the course of the month to 6 June, while Smithson declined by 2%.

Meanwhile, City of London, the defensive UK equity income trust, retained its third place on the list. Run by veteran investor Job Curtis, the trust lost 1.7%. Fellow UK equity income trust Finsbury Growth & Income was also unchanged in the rankings, in fourth spot.  

There were two new entries for May: Baillie Gifford Shin Nippon and Greencoat UK Wind.

The former had previously been a regular on the most bought trusts list. However, over the past few months it had slightly fallen out of favour, with investors perhaps put off by its premium, which has typically stood at around the 5% mark over the past year – although there is no significant change to the premium at time of writing. The trust has produced eye-catching performance in recent years, having provided a five-year return of 159% to 10 June 2019.

The latter, Greencoat UK Wind, has not regularly appeared in the most bought trust list before. The trust invests primarily in both and on- and off-shore UK wind projects. Five-year performance stands at 74%. But its premium may be too high a price for some, as it stands at 13.6%.

Renewables Infrastructure Group kept its place in the rankings, albeit falling by three places. The trust was added to Money Observer’s Rated Fund list for the first time in 2019, replacing Bluefield Solar Income.

Elsewhere, Neil Woodford’s Woodford Patient Capital investment trust went up the rankings by three places.

However, the recent debacle over the suspension of Woodford’s open-ended fund may now be causing some of those investors to kick themselves, with the trust down by roughly 20% over the course of the month to 6 June. Its share price has been under further pressure since.

Behind the fall was Woodford’s decision to suspend trading for his open-ended fund after being unable to meet the demand for redemptions.

Woodford’s trust, being a closed-ended vehicle, will not face those same issues. However, investors in the trust appear to have been spooked by the large crossover in holdings between the fund and trust, as well as a general loss of faith in the manager due to the suspension.

Allianz Technology fell by three places, losing 4.3% over the month, while F&C IT kept it position in ninth place.

The two trusts exiting the top 10 were Fidelity China Special Situations and Lindsell Train. As Money Observer pointed out last month, Lindsell Train’s premium, which currently stands at 90%, is excessive

Investment trust AIC Sector Rank change from previous month 1-month return (as at 6 June) 3-year return
Scottish Mortgage Global No change -5.3 97.5
Smithson Global smaller companies No change -2  
City of London UK equity income No change -1.7 22.8
Finsbury Growth & Income UK equity income No change 0.9 57.6
Greencoat UK Wind Sector Specialist: Infrastructure - Renewable Energy New entry 0.2 52.5
Baillie Gifford Shin Nippon Japanese Smaller Companies New entry -3 70.8
Woodford Patient Capital UK All Companies 3 -19.1 -31.9
The Renewables Infrastructure Group Infrastructure -3 2.3 53.5
F&C Global No change -1.3 64.6
Allianz Technoloy Technology & Media -3 -4.3 157.7

 

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