Not so long ago, I learned about the existence and attractiveness of investment trusts (also known as investment companies). Basically, investment trusts are close ended funds that are traded on the stock exchange (London Stock Exchange). Below I list some pros and cons of investment trusts, as a non-UK resident:
| Pros | Cons |
|---|---|
| – easily be bought/sold on the exchange – actively managed (arguably a pro) – provide exposure to a wide range of asset classes, including unlisted assets – delegate the task of analysing and selecting individual components of a portfolio to fund managers | – bought/sold in GBP which might incur currency conversion fees if you don’t already hold GBP and also currency risk – requires a broker whose platform has access to the market (London Stock Exchange) – Prices of shares can be at a premium or discount to the NAV – Taxes (AFAIK fairly minimal amounts apply for non-resident investors? i.e. UK Stamp Duty) – Fund management fees |
Since overall equities have risen so much since the Coronavirus Pandemic started, I am looking at alternatives with less risky valuations. Below are some interesting investment trusts that I am researching.
| Name | Ticker | Description | Top Holdings | Cumulative Share price return | Link |
|---|---|---|---|---|---|
| JPMorgan US Smaller Companies Investment Trust plc | JUSC.L | Invests in US smaller companies that have a sustainable competitive advantage. Focuses on businesses that trade at a discount to intrinsic value, with strong management teams. |  | 5Y: 105% | https://am.jpmorgan.com/gb/en/asset-management/per/products/jpmorgan-us-smaller-companies-investment-trust-plc-ordinary-shares-gb00bjl5f346 |
| F&C Investment Trust PLC | FCIT.L | The first ever investment trust, established in 1868. A diversified portfolio gives exposure to most of the world markets. Invests in more than 400 companies in 35 countries. |  | 5Y: 82% | https://www.bmogam.com/fandc-investment-trust/ |
| BMO Managed Portfolio Trust PLC Growth Portfolio | BMPG.L | diversified portfolio of investment companies |  | 5Y: 91% | https://www.bmogam.com/managed-portfolio-trust/ |
| European Assets Trust PLC | EAT.L | invests in quoted small and medium-sized companies in Europe. This area of the market is less well researched, allowing value to be added from stock selection. |  | 5Y: 35% | https://www.bmogam.com/european-assets-trust/ |
| 3i Group Plc | III.L | Invests in private equity and infrastructure assets | https://www.3i.com/portfolio/ | 5Y: 98% | https://www.3i.com/ |
These are just a few investment trusts I have started looking into. What do you think? Check out the list of investment trusts linked below to view a comprehensive list of investment companies, which you can also sort and filter by different variables.
Links
- List of investment trusts on Association of Investment Companies’ website: https://www.theaic.co.uk/aic/analyse-investment-companies
- https://www.bogleheads.org/wiki/Investment_trusts
- https://www.trustnet.com/fund/price-performance/t/investment-trusts?tab=fundOverview&IsTrustnetITSpecialistVct=false&pageSize=25