Top 10 most popular investment trusts - January 2018

Once again, Scottish Mortgage IT has kept its position as the most popular investment trust among users of Interactive Investor, Money Observer’s sister-website. 

Baillie Gifford’s two Japan-focused investment trusts have also continued to prove popular. Baillie Gifford Shin Nippon retains third position in our list, despite its 8 per cent premium. Its sister-fund, Baillie Gifford Japan IT, is on a slightly lower premium of 4 per cent, rose in the rankings by three places, becoming the fifth most popular trust. 

Both have benefited from growing investor optimism around Japan. The two trusts have also seen a storming performance – BG Shin Nippon’s three-year share price performance is currently at 178.6 per cent, while BG Japan IT’s is 108.6 per cent. Of the top 10 most-bought trusts, BG Shin Nippon was the only one to see positive returns over the past month, at 1.6 per cent.

Japan’s new-found strength has several drivers. The economic backdrop has materially improved – GDP growth is rising and there are even signs of organic inflation. In addition, new corporate governance rules have encouraged companies to sharpen up their acts, bring in independent directors, pay dividends and tackle the cronyism that had held back shareholder returns.  

Elsewhere, Woodford Patient Capital has disappeared from our top 10 list, after sitting at number two spot just one month ago. The star manager’s troubles have followed him into 2018, with a number of holdings in his various funds and trusts seeing poor performance. As a result, some investors have headed for the door. Likewise, less are looking to buy. Over the past three months Woodford Patient Capital’s share price has declined just over 18 per cent.

Foreign & Colonial investment trust is a new entry into the rankings. This year also marks 150 years since the trust’s founding, making it the oldest investment trust in the world. Over the past three years, the trust has seen a share price return of 48.6 per cent. In an interview with Money Observer last month manager Paul Niven explains why he prioritises asset allocation over stockpicking.  

Another new entrant is Vinacapital. Its popularity is reflective of growing optimisms surrounding Vietnam’s economic future. Vietnam’s government is gradually opening up the country to further international investment. Recently, our SaltyDog columnist explained what Vinacapital has done for his portfolio. 

Templeton Emerging Markets has come in at eight place, three places below last month. It remains to be seen if the investment trust will continue to win the backing of investors following the unexpected departure of star fund manager Carlos Hardenberg at the start of February. Hardenberg took over the trust two and a half years ago and turned around performance.  

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