Interactive Investor

Top 10 most-popular investment trusts: May 2021

1st June 2021 13:57

Kyle Caldwell from interactive investor

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Two trusts with contrasting investment styles are new entries in our top 10 table.

A growth-focused investment trust and a cautiously positioned multi-asset fund have both entered our top 10 most-bought table for May.

Polar Capital Technology (LSE:PCT), which has over the past couple of months had a wider-than-usual discount, was the third most-purchased trust during the month by interactive investor customers. In early February, our investment trust bargain hunter article first highlighted its wide discount. It has remained on a discount wider than its one-year average discount figure, which prompted our columnist Ian Cowie to declare the trust a standout bargain.

The trust’s share price is up 14.2% over the past year, while over three years it has returned 74.6%. The one-year performance figures have been weighed down by the technology sell-off that took place in February. It is currently trading on a discount of 7.5% versus an average discount over the past year of 4.7%.

Its main competitor – Allianz Technology (LSE:ATT) – dropped out of the top 10 in May. It has produced higher returns over one and three years, up 28.3% and 90.9%. In early February, Allianz Technology was trading on a small premium, but has now joined Polar Capital Technology in trading on a discount. Allianz Technology is trading on a discount of 5.4% against an average discount figure of 0.5% over the past 12 months.

Polar Capital Technology, managed by Ben Rogoff, is more benchmark-aware than Allianz Technology. It is not beholden to it, but its portfolio takes into account how the benchmark (Dow Jones World Technology Index) is constructed in an attempt to outperform it. As a result, Polar Capital Technology tends to have bigger stakes in the biggest companies in the index. The trust currently has just over a quarter of its assets in Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOG). Its top 10 holdings account for 53.4% of the portfolio versus 35.7% for Allianz Technology.

The other new entry in May was Capital Gearing (LSE:CGT), which has a completely different investment style and approach to Polar Capital Technology. Capital Gearing, which was introduced to interactive investor’s Super 60 list at the start of 2021, is managed by Peter Spiller. He has managed the trust since 1982 and is the longest-serving manager of an investment trust.

The trust invests in a cautious manner through a multi-asset approach. It has a low weighting to equities (less than 20%) and plenty of defensive armoury through inflation-linked bonds and a small weighting to gold. It successfully protected investor capital during last year’s Covid-19 sell-off. Its maximum net asset value (NAV) fall over the period was limited to just 1.5%.

Of the eight trusts remaining in the top 10, just one is in an unchanged position from April – Scottish Mortgage (LSE: SMT) – which once again is in pole position as the most-popular investment trust.

Moving up three places into second position is BlackRock World Mining (LSE:BRWM). It entered the top 10 last December. Commodities have soared during the pandemic, and investment bank Goldman Sachs believes the rally has only just started. The bank has predicted the start of a commodities super-cycle – a multi-year bull market.

In fourth and fifth place are City of London (LSE:CTY) and Edinburgh Worldwide (LSE:EWI). Both slipped two places. City of London fund manager Job Curtis is mindful of the increasing risks of inflation rearing its ugly head. Last week Curtis highlighted to interactive investor the shares he owns that have pricing power and should therefore provide protection if inflation take hold.

In the bottom half of the top 10, Baillie Gifford US Growth (LSE:USA) climbed two positions to take sixth place. Monks (LSE:MNKS) fell three places to seventh, while Alliance Trust (LSE:ATST) and Smithson Investment Trust (LSE:SSON) swapped places in ninth and tenth.

The other trust to exit the top 10 in May was Fidelity China Special Situations (LSE:FCSS). After a strong showing in 2020, returns for China-focused trusts and funds have cooled over the past three months. China Special Situations is down 4.4% over that period. Over one year, it is up 78.9%.

Top 10 most-popular investment trusts in May

  Trust Sector Rank change from April 2021 One-year performance to 1 June 2021 (%) Three-year performance to 1 June 2021 (%)
1 Scottish Mortgage Global No change 61.8 137.4
2 BlackRock World Mining Commodities & natural resources Up 3 88.1 90
3 Polar Capital Technology Technology & Media New entry 14.2 74.6
4 City of London UK Equity Income Down 2 20.7 4.4
5 Edinburgh Worldwide Global Smaller Companies Down 2 33.7 88.8
6 Baillie Gifford US Growth North America Up 2 58.8 161.9
7 Monks Global Down 3 35.9 63.9
8 Capital Gearing Flexible New entry 12.3 24.8
9 Alliance Trust Global Up 1 30.5 38.5
10 Smithson Investment Trust Global Smaller Companies Down 1 15.4 N/A*

Source: Interactive investor. FE Analytics used for performance figures. Note: the top 10 is based on the number of “buys” during the month of May 2021. *Insufficient track record. 

 

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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