Your Guide to Investment Trusts this 2019


It’s the start of the new tax year which means investors have decided where to put their money. Most have probably invested in funds. But if you’re still deciding where to put your hard-earned money, you might want to consider investment trusts.

First launched over 150 years ago, investment trusts are still approved of nowadays because of the feature it offers that are distinct from funds. Gearing is a tool exclusive to managers of investment trusts. This tool allows them to lease money and invest that money on your behalf. Below are two trusts that make use of this tool.

Who invested where?

Choosing investments should be based on your own goals and how much of a risk-taker you are. Bear in mind that just like any other investments, investment trusts can also fall or rise, which means there is a probability of you getting less than what you put in, so it’s always best to seek expert advice.

Hargreaves Lansdown is an award-winning investment platform based in the UK and for reference,  The company’s clients invested on the following investment trusts this 2019, listed in alphabetical order:

  1. Banker’s Investment Trust.
  2. City of London Investment Trust.
  3. Edinburgh Worldwide Investment Trust.
  4. Fidelity China Special Situations.
  5. Finsbury Growth and Income Trust.
  6. JPMorgan Emerging Markets IT.
  7. Lindsell Train Investment Trust.
  8. Murray International.
  9. Scottish Mortgage Investment Trust
  10. Smithson Investment Trust

Banker’s Investment Trust invests in companies from Switzerland, Germany, and Japan, among others. Managed by Alex Crooke, the trust also sometimes invest in high-risk developing markets. The US makes up a third of the trusts’ portfolio. A quarter portion is invested in the UK. The poor performance of the UK in the stock market has kept investors at bay.

Companies’ financial strength and their ability to provide long-duration growth and dividends that rise over time are the factors that Crooke looks for when deciding where to invest. With this in consideration, he invests in a company regardless of its size and length.

Fidelity China Special Situations is managed by Dale Nicholls. His investments are geared towards meeting the demands of the explosion of middle-class expenditure.  Like Crooke, Nicholls invests in big and small to medium-sized companies. The latter offers more growth potential at higher risk, a perfect example of which is the emerging Chinese market. Though it has slowed down the recent years, the Chinese economy is seen to be the biggest in the years ahead. But with the current trade friction between them and the US, there is no assurance.