Top 10 most popular investment trusts – April 2020

In a bid to play the pandemic, investors rushed to add a healthcare focused trust to their holdings. 

Despite the world changing events around the world, investment trust investors once again proved reluctant to change their buying choices in April, according to the latest data from interactive investor (Money Observer’s parent company). As with the previous month, the usual big-name trusts, such as Scottish Mortgage, City of London, Smithson, Finsbury Growth & Income, all still made an appearance.

Indeed, one of only two new entries to the most bought list in April was Worldwide Healthcare Trust. A Money Observer Rated Fund since 2013, it runs a portfolio of pharmaceutical, biotechnology and healthcare equipment, technology and services companies worldwide. The new inclusion of this trust in is likely reflective of investors looking to play the pandemic – finding a trust with holdings likely to benefit from the global effort to treat and halt the spread of coronavirus. Over the past month, it has returned 11.6 %.

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As noted above, broadly the choices stayed the same. Scottish Mortgage retained its place in the top spot, a position it has occupied for the past couple of years. The trust’s one-month return was an enviable 15.8%, with a number of its technology holdings performing well over the period.

Smithson, launched by Terry Smith’s fund management company in 2018, lost a few places but remained in the top 10 as it has for almost every month since its launch. The trust has seen particularly strong performance of late, returning 13.3% over the month. Its one-year performance is more modest at 7.7%.

City of London, usually the second most bought trust in our rankings, slipped one place.

However, the most bought rankings do show one trend: a pick up in interest in US tech. Polar Capital Technology, a semi-regular on the most-bought list, shot up the rankings this month by five places, becoming the second most bought.

Allianz Technology Trust also climbed the rankings by five places compared to the previous month, coming in at fifth place.

Both trusts are heavily exposed to large cap US tech stocks. Polar Capital Technology, as the name suggests, invests in tech stocks with around 76% in US listed companies. Its largest holdings include Microsoft and Apple, Facebook, Amazon and Alphabet (Google).

Allianz Technology Trust, managed by Walter Price, has similar stocks but with an even higher exposure to US-listed companies.

Investors likely climbed into these two trusts due to the relatively safety they have offered in the coronavirus sell-offs. Despite the recent market declines, US tech stocks continued their relative dominance, falling less than the broader market.

This has served these trusts and their investors well. Over the past month, Polar Capital has returned over 13%, while Allianz Technology Trust has gained 10.1 %. The latter is the best performing trust over the past three years, doubling investors’ money.