Moneywise First 50 Funds - 10 investment trusts for starters

27 February 2020
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You might feel that investment trusts are not for you, as they are traded like stocks and shares on the London Stock Exchange, and therefore their prices can go up and down depending on investor sentiment.

However, many investors love investment trusts for their tendency to perform better than actively managed open-ended funds over the long term – five years or more.

To get you started, here are 10 investment trusts to consider buying and stashing away for the long term.

Investment trusts are identified by their TIDM (which stands for Tradeable Instrument Display Mnemonics), a short, unique code, used to identify UK-listed shares (show in brackets). We’ve also included the annual ongoing charges figure (OCF) for each trust.

UK STOCK MARKET INCOME

City of London Investment Trust (CTY)
A core holding for investors looking for long-term growth in income and capital from companies listed on the London Stock Exchange, it has very low charges and a lower-risk, cautious investment style. The dividend has risen every year for 50 years.
OCF: 0.41% 

Finsbury Growth and Income (FGT)
Its aim is to provide income and growth by investing primarily in UK-listed companies. Manager Nick Train’s long-term patience and deep understanding of his companies sets him apart from his peers.
OCF: 0.67%

UK STOCK MARKET GROWTH

Henderson Smaller Companies (HSL)
Seeking to maximise shareholder total returns by investing mainly in UK smaller companies, its manager, Neil Hermon, has built up an impressive record of capital growth and dividend increases. 
OCF: 0.42%

GLOBAL STOCK MARKET GROWTH

Scottish Mortgage (SMT)
Aims to maximise total return, while also generating real dividend growth, from a focused and actively managed global portfolio, with a focus on the theme of technological change.
OCF: 0.38%

Edinburgh Worldwide IT (EWI)
This trust focuses on companies that are very early-stage disruptors within their industry. Managers take a very long-term approach to investment and spread risk through diversification. 
OCF: 0.75%

Witan Investment Trust (WTAN)
A good core portfolio holding, it invests in global equities and is managed via a multi-manager strategy, which means it invests in other funds.
OCF: 0.76%

Jupiter European Opportunities (JEO)
Fund manager Alexander Darwall has proved to be an exceptional stock-picker. He invests in a focused portfolio of around 40 stocks and favours high-quality European businesses. 
OCF: 0.91%

GLOBAL STOCK MARKET INCOME

Murray International (MYI)
Its goal is to achieve income and capital growth through investments predominantly in worldwide equities. Fund manager Bruce Stout is a ‘contrarian’ investor (he buys companies that everyone else is selling).
OCF: 0.64%

PROPERTY

TR Property IT (TRY)
The only trust listed by the Association of Investment Companies that invests mainly in the shares of property companies, rather than physical property. 
Most holdings are in Europe including the UK. 
OCF: 0.59%

BMO Commercial Property Trust (BCPT)
Investing in a diversified UK commercial property portfolio, it aims to provide an attractive level of income together with the potential for capital and income growth. Formerly BMO Commercial Property Trust (BCPT).
OCF: 1.2%

HOW TO TURN THE FIRST 50 FUNDS INTO A POTENT PORTFOLIO

When putting together a portfolio of funds, the easiest way to think about combining these is through the ‘core and satellite’ approach. This separates a portfolio of investments into two distinct segments: the first is a core of long-term, low-cost and highly diversified investments, while the other is a selection of more specialist satellite investments.

Moneywise has put together some simple portfolios, that will help you begin investing for income or for growth. You can view them here.

 

First published on 14 July 2016