Top 10 most popular investment trusts – May 2018

Tech shares have surged of late, so it is no wonder the rankings were dominated by investment trusts with large tech focuses.

Investors have been piling into tech over the past few weeks, so its no surprise that tech-focused Allianz Technology Trust was one of the most purchased funds in May, according to data from our sister website Interactive Investor.

Run by Walter Price, it was the second most-bought investment trust, shooting up from fifth place the month prior.

The surge in popularity, however, has made the trust expensive, compared to historic averages. It is currently on a premium of 3.5 per cent, whereas over the past year the trust has typically traded on a small discount of 2.4 per cent.

Other tech focused firms also attracted a lot of buyers. Edinburgh Worldwide re-entered the top 10 in May, also likely off the back of tech’s rebound. The sector constitutes over 30 per cent of the trust’s portfolio. The popularity has also pushed the trust’s premium above its 12-month average, now sitting at 3.2 per cent.

Tech-heavy Scottish Mortgage once again came in as the most purchased investment trust. Investors, as of yet, have not been disappointed. Over the past three years it provided a return of almost 100 per cent. The trust, however, is quite pricey at the minute, with a premium of 3.4 per cent compared to its 12-month average of 1 per cent.

Monks, another global fund with a heavy tech-weighting, stayed at number five in the rankings. Foreign and Colonial, with only 14 per cent of its portfolio in tech, slipped two places.

Woodford Patient Capital has retained a place in the top ten most purchased, despite returns being lacklustre. The trust has left investors nursing losses of 33 per cent over the past three years. However, at an 11.7 per cent discount, compared to a 12-month average discount of 7.1 per cent, for investors that still have faith in manager Neil Woodford, right now the trust is a bargain.

Baillie Gifford’s star performer Shin Nippon has slipped from second most bought to third most bought trust in April. The trust has provided storming results for investors, providing returns of 150 per cent over the past three years.

However, Japan’s general disappointing performance in 2018 so far may be weighing on the trust slightly. Its premium now sits at 3.7 per cent. While that’s high compared to most trusts, it’s a fair way off what it was before. The trust’s 12-month average premium is 7.3 per cent, while at some points over the past year its premium soared to over 14 per cent.

City of London, known as a solid dividend payer fell six places in the rankings. The trust is on a 1.2 per cent premium, the same as its 12-month average.

Two new trusts entered the rankings in May, Tritax Big Box and BlackRock Smaller Companies.

BlackRock Smaller Companies surge in popularity is likely to be the result of a general surge in interest in UK smaller companies among investors. Although the Brexit sell-off of UK firms started two years ago, various experts still believe that UK smaller companies are undervalued.

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