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Most popular investment trusts in 2019

We look at what were the most popular investment trusts with HL clients in 2019, and delve deeper into three from the list.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

As we approach the end of December, it’s natural to look back on one year before we prepare to begin the next. After a nervous end to 2018, stock markets got 2019 off to a swift start. Mid-way through the year though, caution began to creep back in. The price of gold, which normally does well when there are worries about the stock market, started to climb.

Then the US Federal Reserve cut interest rates in the latter part of the year, injecting optimism back into stock markets. The US gained the most from this move, but global stock markets were also buoyed.

And it was global investment trusts that were among the most popular during the year. Five of the top ten among our clients are from the Global sector. Four are trusts investing in the UK, and an Asia-focused trust completes the set.

Where did HL’s clients invest in 2019?

The list below shows the most popular investment trusts (the number of investment trust buys minus the number of sells) with HL’s investors in 2019.

This isn’t personal advice or a guide on how to invest. You should choose investments based on your own objectives and attitude to risk.

Investment values and any income from them can fall as well as rise, so there’s no guarantee you’ll make a profit – you could get back less than you put in. If you’re not sure whether an investment is right for you, please seek advice.

Based on trades up to 9 December. Investment trusts are listed in alphabetical order. Finsbury Growth & Income Trust, and the underlying investments in Lindsell Train Investment Trust, hold shares in Hargreaves Lansdown plc.

Monks Investment Trust

It’s been a strong year for this trust, run by Baillie Gifford trio Charles Plowden, Spencer Adair and Malcolm MacColl. They’re experienced, patient investors, who run a diversified portfolio of companies they think have the best long-term growth potential. They’ve found the most opportunities in the US and the financial and technology sectors.

The managers also invest in some emerging markets, and hold Baillie Gifford’s Schiehallion Fund, which invests in high-growth unquoted businesses. They use gearing (borrowing to invest) and derivatives too. All these things add risk. You can find more details about the risks and charges in the latest annual reports & accounts.

Since the start of the year the trust gained 29%*, compared with the FTSE World index’s 21.6% rise. That’s not a reliable guide to future returns. If you’re looking for income you won’t find much here as the trust currently yields just 0.2%. At the time of writing it trades at a 4.6% premium.

Annual percentage growth
Nov 2014 -
Nov 2015
Nov 2015 -
Nov 2016
Nov 2016 -
Nov 2017
Nov 2017 -
Nov 2018
Nov 2018 -
Nov 2019
Monks Investment Trust 6.6% 31.2% 42.3% 1.7% 18.9%
FTSE World 2.6% 25.6% 15.4% 6.0% 13.1%

Past performance is not a guide to the future Source: Lipper IM *to 30/11/2019

See the latest Monks Investment Trust share price, charts and how to trade

City of London Investment Trust

Job Curtis has been at the helm of this trust for nearly three decades, and has continued the trust’s record of increasing dividends every year for over half a century. The yield is currently a healthy 4.4%, although income is variable, not guaranteed and past performance is not a guide to the future.

Curtis looks mainly to large FTSE 100 UK companies, but invests a small amount in overseas companies and some higher-risk smaller companies too. The trust’s current largest holdings come from sectors like financial services, consumer goods and oil & gas.

The manager uses gearing (borrowing to invest) which can magnify gains and losses, so it increases risk. You can find out more about the trust’s risks and charges in the latest annual report and accounts.

2019 has been a pleasing year for the trust, which has been helped by fading Brexit worries and the strong performance of large UK companies. The trust returned 15.8%*, just ahead of the FTSE All Share’s 15.3% gain. Remember these figures don’t indicate or guarantee future performance.

Annual percentage growth
Nov 2014 -
Nov 2015
Nov 2015 -
Nov 2016
Nov 2016 -
Nov 2017
Nov 2017 -
Nov 2018
Nov 2018 -
Nov 2019
City of London Investment Trust 4.5% 4.1% 13.5% -1.5% 11.7%
FTSE All-Share 0.6% 9.8% 13.4% -1.5% 11.0%

Past performance is not a guide to the future Source: Lipper IM *to 30/11/2019

See the latest City of London share price, charts and how to trade

Henderson Far East Income

The benefits of diversification don’t only apply to capital growth – having income streams from different parts of the world is also a sensible idea. This trust could provide just that.

Managers Michael Kerley and Sat Duhra invest in companies they think will grow both their dividends and capital from both developed and higher-risk emerging markets in the Asia-Pacific region. They’ve found the most opportunities in China and Australia, and in the real estate and communication sectors.

The managers’ focus on income-paying companies means the trust currently has a high yield of 6.4%, although remember yields are variable and income isn’t guaranteed. The trust gained 9.2% since the beginning of the year*, which is less than the FTSE Asia Pacific (excluding Japan) index’s 11% gain. Remember past performance isn’t a guide to future returns.

The managers don’t currently use gearing (borrowing to invest), but they have the option to, and they use derivatives to help them invest, both of which increase risk. You can find more details about the risks and charges in the latest annual reports & accounts.

Annual percentage growth
Nov 2014 -
Nov 2015
Nov 2015 -
Nov 2016
Nov 2016 -
Nov 2017
Nov 2017 -
Nov 2018
Nov 2018 -
Nov 2019
Henderson Far East Income -9.3% 28.0% 16.8% -2.7% 10.1%
FTSE Asia Pacific ex Japan -7.6% 31.7% 19.6% -2.9% 8.3%

Past performance is not a guide to the future Source: Lipper IM *to 30/11/2019

See the latest Henderson Far East Income share price, charts and how to trade

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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