Top 10 most popular investment trusts – September 2018

A China trust was snapped up by investors looking for a bargain, while Woodford Patient Capital saw renewed investor interest.

Funds and Investment Trusts October 5, 2018 by Tom Bailey

The consensus among financial commentators is that emerging markets are cheap right now due fears surrounding the China/US trade war, among other reasons. However, that hasn’t meant much of a pickup in popularity for the sector among investment trust investors, according to data from our sister website Interactive Investor showing the most bought trusts in September 2018.

The only trust with large emerging market holdings to appear in the top 10 was Fidelity China Special Situations. Having been the tenth most popular investment trust in August this year, in September it shot up the rankings to number four. This growth in popularity is presumably on the back of more adventurous investors seeing now as a good time to buy into the trust after share price valuations had fallen, or indeed to top up holdings.

However, investment trust investors were more interested in the seeming safe global equity focused investment trusts.

Scottish Mortgage, one of the best performing investment trusts in recent years, maintained its top spot, a position it has held for over a year. One of Scottish Mortgage’s biggest holdings is Tesla, accounting for around 5 per cent its portfolio. Recent controversies surrounding the company’s chief executive Elon Musk, however, hasn’t dented investor’s confidence in the investment trust.

Edinburgh Worldwide, also a Baillie Gifford managed fund with a US technology tilt, edged up two spaces in the rankings. Edinburgh Worldwide has been one of the best performing trusts over the past year, managing to return investors 47.4 per cent, the highest of all trusts in the rankings.

These trusts invest heavily in US technology equities which have been the most popular and best performing stocks of 2018. Indeed, according to investor surveys, US equities are seen as a safe haven in an increasingly volatile world

Continuing on this theme, investors also invested in tech specialist trusts which also have a heavy US tilt. Allianz Technology, run by veteran investor Walter Price, edged up in the rankings, taking the second spot while Polar Capital Technology entered the rankings.

Woodford Patient Capital saw its re-entry into the top 10 following a relative pick up in performance. Over the past three years the star investors’ trust has lost around 18 per cent due to a number of unfortunate trades.

However, performance picked up slightly in September, with one of the trust’s holdings Industrial Heat revalued upwards by 357 per cent, adding 8.8 per cent to Woodford Patient Capital’s net asset value. This upswing in performance may have convinced some investors that Woodford Patient Capital is still a good hold for the long term.

Finally, City of London re-entered the top 10 list. The defensive income focused fund may have seen a pickup in popularity as more investors start to become wary of either a market dip or economic downturn. While the trust has only returned investors a 2.5 per cent return over the past year, in many investor’s eyes, it is a safe bet with which to weather any impending market turbulence.

Trust Sector Change since August 1-year return (up to 2 October 2018) 3-year return (up to 2 October 2018)
Scottish Mortgage Global -- 29% 129.6%
Allianz Technology Sector Specialist: Tech Media & Telecomm +1 46.2% 179.6%
City of London UK Equity Income New entrant 2.5% 25.6%
Edinburgh Worldwide Global +2 47.4% 130.6%
Fidelity China Special Situations Country Specialists: Asia Pacific +4 -2.7% 85%
Baillie Gifford Shin Nippon Japanese Smaller Companies -2 38.5% 175.7%
Finsbury Growth & Income UK Equity Income New entrant 11.7% 52.9%
Foreign & Colonial Global -3 19.8% 82.8%
Woodford Patient Capital UK All Companies New entrant -9.1% -18.9%
Polar Capital Technology Sector Specialist: Tech Media & Telecomm New entrant 25.8% 145.3%

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