Investment trust tips: what the experts tip

A lack of market volatility and a weak dollar hindered our 2013/2014 tips, chosen to do well in either bearish or bullish markets. Nevertheless, we are sticking with our formula and many of the trusts that have rewarded investors in previous years.

We have two categories, adventurous and conservative, as well as tips from a number of investment trust experts.

Two of our three experts' tips from 2013/14 also had a good year, with Witan Investment Trust performing well for Simon Elliott of Winterflood Securities and BlackRock World Mining achieving similar double-digit returns for Alan Brierley at Canaccord Genuity.

You can view our conservative trust selections in both UK-based and global-oriented sectors here, while our adventurous choices in both UK-based and global-oriented sectors are here.

Fiona Hamilton finds out what they recommend this time around and profiles those trusts.

Alan Brierley, head of investment trust research at Canaccord Genuity, is worried about increasingly demanding stock market valuations and mounting political tensions, so he favours a conservative strategy.

He says: 'HICL Infrastructure gives investors attractive risk-adjusted and genuine absolute returns and has capital preservation qualities we believe will be valued. In addition, HICL offers an attractive and sustainable dividend.'

Simon Elliott, head of the investment trust research team at Winterflood Securities, says tight discounts to net asset value make it hard to identify value opportunities in the trust sector but that British Empire Securities & General Trust (BTEM) does offer value. The trust focuses on identifying value opportunities among asset-backed companies.

Elliott says: 'Its discount reflects its recent disappointing returns and out-of-favour value approach. However, performance has picked up this year and its portfolio is benefiting from an increase in takeover activity. The double-digit discount could prove an attractive entry point.'

Ewan Lovett-Turner, a leading member of the investment companies research team at Numis Securities, is backing Julie Dean to turn around Schroder UK Growth Fund (SDU), after a disappointing first year in charge.

'She has a strong track record managing a £2.2 billion open-ended fund with a similar approach, combining bottom-up stock selection with a top-down overlay that alters the style tilt according to the business cycle,' Lovett-Turner says. 'Anticipating a slowdown, the overweight exposure to cyclical shares has been cut in favour of more conservative holdings.'

Subscribe to Money Observer Magazine

Be the first to receive expert investment news and analysis of shares, funds, regions and strategies we expect to deliver top returns, plus free access to the digital issues on your desktop or via the Money Observer App.

Subscribe now

Add new comment