February's 10 most-bought trusts

Kyle Caldwell
7 March 2017
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Financial markets are enjoying a fine run of form, with both the FTSE 100 and S&P 500 hitting new all-time highs last week, but retail investors are not getting carried away.

Instead the general mood is one of caution, reflected by the latest fund statistics from the Investment Association, with the top three selling sectors being targeted absolute return, strategic bond and mixed investment 40-85% shares.

This list of 10 most-bought investment trusts, five of which are part of our First 50 Funds list, also reflects that cautious mind-set, as investors continue to adopt a safety-first approach.

Data from our sister website Interactive Investor shows global trusts have become an even more popular choice, with Witan, Foreign & Colonial and Bankers moving their way up the list.

 

Scottish Mortgage tops table

But Scottish Mortgage once again tops the table, extending its run in pole position to 22 months. Later this month (on 20 March) the trust will be promoted to the FTSE 100 index.

Although it does not always happen, when companies are promoted to the index their share prices tend to bounce higher. This is due to the fact that FTSE 100 tracker funds, which aim to replicate the performance of the index, are obliged to buy into them, boosting demand.

Multi-manager trust Witan has moved from third to second place in the top 10 table. The trust typically contains 10 to 15 fund managers, who each run a different geographical portfolio.

The blend of different approaches and styles helps smooth out the volatility normally associated with a single fund manager. The trust also has 41 consecutive years of annual dividend increases under its belt.

In third place is Woodford Patient Capital, managed by star fund manager Neil Woodford.

Since launch in April 2015 the trust's share price has lost 5%, but Woodford is confident performance will come good for investors who stick around for the long term, targeting annual returns of 10% through having a bias towards early stage and unquoted companies predominately in the UK.

Completing the top five are Finsbury Growth & Income and BlackRock World Mining.

Major moves

Outside of the top five there has been considerable movement. City of London, a trust that boasts a market-leading 50 years of consecutive dividend increases, has slipped two places to sixth, while Foreign & Colonial Investment Trust moves up three places to seventh spot.

Manager of Foreign & Colonial Paul Niven oversees a multi-manager approach, achieved by using a range of fund managers to invest in different regions.

US shares make up nearly 50% of the portfolio at present. The trust, which describes itself as conservatively managed, has a long history of annual dividend increases going back 46 years.

 

Elsewhere, RIT Capital Partners has dropped one place to eighth, followed by Bankers in ninth, as it re-enters the top 10 for the first time since September.

Bankers, one of the UK's oldest investment trusts, has one of the longest records for consecutive annual dividend increases, which it has now maintained for 50 years.

Alex Crooke, the lead manager, is responsible for deciding how much to invest in different markets. He also runs the UK segment, which has been cut to under 30% of the portfolio in recent years.

Finally, maintaining its place in the top 10 is the Biotech Growth Trust, which enjoyed a strong month with its share price rising 7.3%.

February's 10 most-bought trusts

RankFundAIC sectorChange since January1m SP total return to 6 Mar (%)3yr SP total return to 6 Mar (%)
1Scottish Mortgage*Global--1.570.9
2Witan*Global14.853.4
3Woodford Patient CapitalUK all companies-12.3n/a
4Finsbury Growth & Income*UK equity income2543.1
5BlackRock World MiningCommodities & natural resources---4.9-8.3
6City of London*UK equity income-25.124.6
7Foreign & Colonial*Global34.264.5
8RIT Capital PartnersFlexible Investment-13.358.3
9BankersGlobalNew entry9.347
10Biotech GrowthBiotechnology & healthcare-27.348

* denotes a Moneywise 50 First Fund

This story was originally written for our sister magazine, Money Observer.

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