Adrian Lowery, investments and markets analyst at DIY investing platform Bestinvest, discusses how top investment trusts have fared since the Queen started her historic 70-year reign.
To mark the start of the long bank holiday weekend of
celebrations for the Queen’s Platinum Jubilee, Adrian Lowery from
Bestinvest looks at
how investment trusts have been faring since 1952.
Although Scottish Mortgage investment trust has taken a severe battering this year, Lowery said it has recorded an impressive share price total return (including re-invested dividends) over the last 30 years of 3,480 per cent.
Companies launched at least 70 years ago that appear on the Bestinvest Best Funds List which is published twice a year include:
Mercantile Investment Trust
A £1.7 billion ($2.14 billion) trust run by Guy Anderson and Anthony Lynch at global investment house JPMorgan Asset Management. It focuses on businesses that combat rising inflation and supply chain issues. It also focuses on UK smaller and medium-sized companies which have seen a sharp sell-off this year as the outlook for the economy soured. This resulted in Mercantile’s share price falling to a discount of more than 14 per cent, despite the stock offering a yield of 3.9 per cent, the firm said. Mercantile has a high proportion of holdings in technology stocks, including Softcat and Computacenter.
Henderson Smaller Companies
This trust provides exposure to companies such as Oxford Instruments, a tech company worth £1.14 billion ($1.44 billion), against the $2.14 trillion-valued Microsoft. It offers a yield of 2.7 per cent and is currently trading at a discount of about 17 per cent, the firm said.
This UK-based investment company is the only investment trust which invests mainly in the shares of property companies rather than physical property. About a third of the trust is invested in residential property, and its shares – trading at a 9 per cent discount – provide a dividend income equivalent to around 3.5 per cent. The team, led by Marcus Phayre-Mudge, have worked together for many years and are regarded as the leading real-estate securities team in the UK, with a strong track record, the firm stressed.
This is still managed from Baillie Gifford’s Edinburgh offices, investing in high growth stocks from the US to China, most of which are publicly listed. The trust has taken a battering since the start of the year, as sectors such as tech have sold off aggressively, but the long-term track record is outstanding and the fees are also low too, the firm said. This means that its share price is trading on a significant discount of more than 10 per cent, it added.
Finsbury Growth & Income
High-profile fund manager Nick Train apologised at a recent investment seminar for this trust's performance over the last 18 months, the firm said. The trust, which is sitting on a 6.8 per cent discount, has underperformed its benchmark and sector so far this year. It is down 13.8 per cent as of 27 May, while the UK Equity Income trust sector is down 2.0 per cent, much like the London stock market year-to-date.
Temple Bar (TMPL)
Contrarian investor Ian Lance is co-head of the UK value and income team at Redwheel and co-manager of the Temple Bar investment trust.This investment trust with an equity income focus is trading at a discount of 5.4 per cent with a yield of 3.5 per cent.