Interactive Investor

Top 10 most-popular investment trusts: April 2022

3rd May 2022 14:33

Kyle Caldwell from interactive investor

There are three new entries in our top 10 investment trust table.

With various headwinds threatening to destabilise stock markets, many investors are seeing the glass as half-empty at the moment, reflected in the continued inclusion of three ‘wealth preservation’ trusts in our top 10 most-popular table.

Capital Gearing (LSE:CGT), Personal Assets (LSE:PNL) and Ruffer Investment Company (LSE:RICA), prioritise protecting investor capital. Each has a low weighting to equities and plenty of defensive armoury to defend against stock market storms – including recessions – the prospect of which is becoming more likely, according to the bond market.

While there’s plenty of debate over whether a recession will occur, the wealth preservation trio are solid candidates for investors considering adding ballast to their portfolio.

A counter-intuitive way to prepare a portfolio for an economic slowdown is to turn to the biggest tech shares. While such companies have been out of form of late, with investors instead favouring value shares, the likes of Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) generate high and reliable profits. In a recession, these companies are likely to continue making a lot money.

In March, two technology-focused trusts fell out of the rankings, but April saw Polar Capital Technology (LSE:PCT) return to the top 10. The trust, managed by Ben Rogoff, continues to trade on a big discount, currently 13.3%. It has lost 13.7% over the past year, but is up 49.3% over three years.

Only Scottish Mortgage (LSE:SMT), which retains pole position, has produced a bigger loss over the past year among trusts in the top 10, down 27.2%. Over three years, however, it is up 75.2%, only beaten by BlackRock World Mining.

Scottish Mortgage backs disruptive companies with a technological edge over competitors. It has a sizeable position, around 25% of its assets, in unlisted companies and many are at an early stage of development. Investment trust analysts have continued to back it, with those at Numis and Stifel saying they expect the innovative companies Scottish Mortgage invests in to continue growing value for long-term shareholders.

Longstanding fund manager James Anderson retired at the end of April. Tom Slater, who has been joint manager of the trust since 2015, has now become lead manager. Lawrence Burns, who has co-managed the Baillie Gifford International Concentrated Growth Strategy since 2017, is the deputy fund manager. He has worked at Baillie Gifford since 2009.

Moving up a couple of places to second is City of London (LSE:CTY). The trust, which backs UK dividend-paying shares, is a favourite with income investors having raised its income payouts for 55 consecutive years. The trust has been managed by Job Curtis since 1991.

Keeping its place in third is BlackRock World Mining Trust (LSE:BRWM). Commodities have been on a tear for the past two years, with some predicting the early stages of a new ‘super-cycle’, which is being driven by the global green revolution as major economies strive to decarbonise.

Lower down the table, falling one place to ninth, is Greencoat UK Wind (LSE:UKW). This trust, which as the name suggests invests in wind farms in the UK, was a new entry in the top 10 in March. It aims to provide investors with an annual dividend that increases in line with RPI inflation.

The remaining two trusts are both new entries in the top 10. The first, taking fifth place, is Gore Street Energy Storage Fund (LSE:GSF). Our columnist Ian Cowie owns the trust in his ‘forever fund’ and has pointed out that “it aims to smooth out inevitable peaks and troughs of electricity production from wind and solar power by means of massive batteries.”

Over one and three years, the returns catch the eye, with the trust up 19.1% and 58.1%. Its dividend yield is a key attraction, currently 6.9%.

The other new entry – alongside Polar Capital Technology and Gore Street Energy Storage – is Alliance Trust (LSE:ATST) in 10th place. It invests globally and adopts a multi-manager approach that is overseen by Willis Towers Watson. In our Funds Fan podcast, we recently interviewed Stuart Gray of Willis Towers Watson.

JPMorgan Russian Securities (LSE:JRS), RIT Capital Partners (LSE:RCP) and Smithson Investment Trust (LSE:SSON) exited the top 10 in April.

Top 10 most-popular investment trusts: April 2022 

Rank Trust Sector Rank change from March One-year performance (%) to 1 May 2022 Three-year performance to 1 May 2022 (%)
1 Scottish Mortgage  Global Unchanged -27.2 75.2  
2 City of London UK Equity Income Up two -5 45.4  
3 BlackRock World Mining Commodities & Natural Resources Unchanged 22 140.6  
4 Capital Gearing Flexible Investment Up one 7.6 26.7  
5 Gore Street Energy Storage Renewable Energy Infrastructure New entry 19.1 58.1  
6 Personal Assets Flexible Investment Up four 8 28  
7 Ruffer Investment Company Flexible Investment Up two 15.1 57.1  
8 Polar Capital Technology Technology & Media New entry -13.7 49.3  
9 Greencoat UK Wind Reneweable Energy Infrastructure Down one 25.4 31.4  
10 Alliance Trust Global New entry 0.6 31.4  

Source: interactive investor. Performance figures: FE fundinfo. Note: the top 10 is based on the number of “buys” during the month of April.

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