Investment trusts are popular vehicles for many investors. Handily, analysts at broker Peel Hunt have built top list of trusts across the three most common styles of investment; growth, value and income.
The selections are based on three-year returns annualised, with some subjective cherry-picking by Peel Hunt.
TOP FOR GROWTH
Monks Investment Trust (MNKS) has been managed by Charles Plowden, Spencer Adair and Malcolm MacColl since March 2015. In that time the trust has delivered a 66% cumulative return in net asset value (NAV). That is versus its benchmark MSCI AC World Index's 49% return over the same period.
Among its top 10 holdings are technology sector powerhouses such as Amazon, Alibaba and Google-owner Alphabet, as well as lesser-known names, like Naspers, the South African internet company.
Peel Hunt notes that the significant turnaround in performance has resulted in the discount disappearing over the course of this rough three-year timeframe. Back then the shares were valued around 15% NAV, compared to the 3% premium today’.
The broker also spells out its opinion that Baillie Gifford, which manages the trust, is a top global growth investor.
SEARCHING FOR VALUE
Fans of Warren Buffett may like value plays, finding under-priced assets capable of unlocking underappreciated returns potential.
Topping the broker’s selections in this segment is British Empire Trust (BTEM). It is managed by Asset Value Investors’ Joe Bauernfreund, who has been in the hotseat since October 2015.
His mandate is to find undervalued stocks around the globe, but outside of the US.
Since Bauernfreund took the helm the trusts has outperformed is benchmark MSCI World Index in NAV terms by 17%. Its NAV total return of 13% last year was driven primarily by two of its top holdings, Wendel and its Japanese Special Situations which is a basket of 17 Japanese stocks.
Regular and reliable income is in increasing demand as people typically live longer. That makes attractive dividends all the more important, and area where Peel Hunt believes Murray International Trust (MYI) is a leading option.
Managed by Bruce Stout since 2004 and supported by 10 global equity specialists, the typically invests for the longer-term. That means the turnover of stocks within its portfolio is typically low.
The trust has so far paid three 11p per share payouts for 2017 so far, although is fourth quarter dividend has yet to be confirmed. Peel Hunt estimates the trust's income yield at around 3.9%.
Importantly the sources of its cash flows are diverse. Some of the trust’s more recent performance enhancers have come from diverse sources, including Venezuelan bonds, both sovereign and corporate (Banco Bradesco, for example).
Among its top holdings are microchip manufacturer Taiwan Semiconductor Manufacturing, Groupo Asur, the Mexican airports operator, and Daito Bank of Japan. This neatly illustrates the broad spread of companies and nations favoured by the trust.
While there can be no guarantees regarding future performance investors may find it instructive to keep an eye of which trusts have performed positively, both in absolute and relative terms.