Interactive Investor

Top 10 most-popular investment trusts: November 2020

1st December 2020 13:23

Kyle Caldwell from interactive investor

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Two new entries to the top 10, as investors look to profit from trusts in a rich vein of form.   

Investors are continuing to look East in pursuit of potentially higher returns, with a total of four trusts investing in Asia equities in our top 10 most-popular trust list in November.

This marks a big change since the start of 2020 when there was not a single trust focusing on Asian equities in the top 10. At the time, UK funds were proving popular, with a total of four trusts featuring in the top 10 in January 2020. Only one remains, the ever-popular City of London (LSE: CTY), although it has for the last couple of months been at risk of dropping out of the top 10.

The three Asian trusts retaining their places from October are Baillie Gifford China Growth (LSE: BGCG), Fidelity China Special Situations (LSE: FCSS) and JP Morgan China Growth & Income (LSE: JCGI).

Baillie Gifford China Growth has climbed three places up to second in the rankings. The trust emerged from Witan Pacific, which was taken over by Baillie Gifford in mid-September. Baillie Gifford revamped the portfolio’s strategy and renamed the trust Baillie Gifford China Growth. It appears to already have a strong following given that it has already entered interactive investor’s top 10 list in October and is now in second place in November.

However, investors who are currently buying the trust are paying a rich price, as the premium currently stands at 18.8% (as at the close of trading 30 November), according to investment trust analyst Winterflood. 

Fidelity China Special Situations and JP Morgan China Growth & Income occupy the positions of third and fourth in the top 10. Fidelity China Special Situations is trading on a small discount of 0.2%, while JP Morgan China Growth & Income is trading on a small premium of 1.6%.

In a recent video interview with interactive investor, Dale Nicholls, the fund manager of Fidelity China Special Situations, named the trends and themes that are driving the trust’s impressive performance. 

The fourth Asian-focused trust, a new entry in November, is Baillie Gifford-managed Pacific Horizon (LSE: PHI). The trust has shot the lights out over the past year, doubling investors’ money. This was driven by stock selection, including strong performance from its largest holding SEA Limited (NYSE:SE), which is an e-commerce and online gaming business. Manager Ewan Markson-Brown and deputy manager Roderick Snell look for companies with high earnings and revenue growth on a five-year time frame.

Pacific Horizon is also trading on a high premium, of 11.8% versus 0.4% for its 12-month average. Therefore, it may pay to wait for the premium to cool. 

Elsewhere, retaining its place in the number one spot is Scottish Mortgage (LSE: SMT). The trust continues to impress (up 108% over the past year), driven by the performance of some of its top 10 technology holdings including Tesla (NASDAQ:TSLA)Amazon (NASDAQ:AMZN)Tencent (SEHK:700) and Alibaba (NYSE:BABA)Scottish Mortgage particularly benefited from its exposure to Tesla in November, with the electric car maker’s share price given a further boost following the announcement that it will enter the S&P 500 index on 21 December. 

Monks (LSE: MNKS), which is regarded as a less aggressive version of Scottish Mortgage, is the second new entry in the top 10. Fund manager Charles Plowden, who is set to retire at the end of April 2021, is a growth investor, focusing on the ‘best of the best’. Plowden says he aims to “seek out that rare subset of companies with the potential to grow to multiples of their current size”. Co-manager Spencer Adair will step up to become the trust’s lead manager when Plowden retires.

Baillie Gifford Shin Nippon (LSE: BGS) retains its position in sixth place, while Edinburgh Worldwide (LSE: EWI), also managed by Baillie Gifford, slipped one spot from seventh to eighth. In total, there are six Baillie Gifford-managed trusts in the top 10.

Elsewhere, Allianz Technology (LSE: ATT) fell four places, from third to seventh. Walter Price, who has 40 years’ experience of investing in technology, has run the trust since 2007. Price favours companies creating new markets or effecting significant change in old ones. Themes the trust seeks to profit from include semiconductors, cloud computing, robotics and automation, and security.

The two trusts exiting the top 10 are International Biotechnology Trust (LSE: IBT) and Baillie Gifford US Growth (LSE:USA).

Top 10 most-popular trusts: November 2020 

Ranking Trust Sector Rank change from October One-year performance to Dec 1 (%) Three-year performance to Dec 1 (%)
1 Scottish Mortgage Global no change 108 152.8
2 Baillie Gifford China Growth Asia Pacific ex Japan Up 3 54.4 65.1
3 Fidelity China Special Situations Asia Pacific ex Japan -1 77.4 71.9
4 JP Morgan China Growth & Income Asia Pacific ex Japan no change 101.5 109.2
5 Pacific Horizon Asia Pacific ex Japan new entry 119.9 122.7
6 Baillie Gifford Shin Nippon Japan no change 38.7 47.9
7 Allianz Technology Technology & Media -4 67.9 134.4
8 Edinburgh Worldwide Global Smaller Companies -1 61.2 127.7
9 City of London UK Equity Income no change -12.6 -3.4
10 Monks Global new entry 35.7 66.1

Source: interactive investor. FE Analytics used for performance figures. Note: the top 10 is based on the number of “buys” during the month of November.

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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