In a month that saw both the end of a tax year and the start of a new one, the same investment trust names continued to grab investors’ attention, with just one change to our top 10 table.
The rankings, which are based on the number of buys among interactive investor customers in April, saw BlackRock World Mining Trust (LSE:BRWM) re-enter the top 10 at the expense of India Capital Growth (LSE:IGC). The commodity-focused trust is a regular fixture in the top 10, but it slipped out of the table in March.
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However, while there was only one change last month, over the past year there’s been plenty of movement. In fact, only four investment trustsconsistently retained a place in the top 10 over the past year: Scottish Mortgage (LSE:SMT), Alliance Trust (LSE:ATST), Greencoat UK Wind (LSE:UKW) and City of London (LSE:CTY).
Topping the table is Scottish Mortgage, the growth-focused global trust that seeks out companies capitalising on technological advancements. Interest rate rises hurt its three-year numbers, with a loss of -33.9% over that period, but a gain of 33.3% over the past year shows that a recovery is under way. The turnaround stems from technology stocks returning to form amid excitement over the potential for advancements in artificial intelligence (AI).
In addition, Scottish Mortgage’srecently announced £2 billion share buyback plan over the next two yearsto address its discount, which currently stands at -10%,has been warmly welcomed.Also of note is news that US activist investor Elliott has built up a 5% stake in the trust. While it remains to be seen what Elliott’s intensions are, the presence of an activist investor could be a positive, as the firm will be looking to make the most out of its stake.
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Swapping places to occupy second and third place are and Alliance Trust. Both are “style neutral”, meaning they do not favour a particular category of stocks, such as value or growth, but mix and match. Over both one and three years, this approach has paid off, despite a small number of high-growth tech stocks dominating global markets over the past 18 months, the so-called Magnificent Seven.
Fourth in the table is Greencoat UK Wind.It has a stellar dividend track record, having grown payouts ahead of RPI inflation each year over the past decade. It offers a dividend yield of 7.2% and recently increased its target dividend for 2024 to 10 pence per share, above the Retail Prices Index for December 2023.
However, 11.3% of shareholders voted for the trust to be wound up during its recent continuation vote. This may be down to disgruntlement over the discount, which is currently -11.5%. Overall, the renewable energy infrastructure trust sector is out of favour, with the average discount at -23.5%. This is mainly down to interest rate rises causing bond yields to rise, which has boosted demand for lower-risk assets.
In fifth place, climbing up two positions, is City of London. Managed by Job Curtis since 1991, this trust predominately invests in dividend-paying FTSE 100 firms. Curtis adopts a conservative approach by focusing on companies with good cash generation. City has raised its dividend for 57 years in a row, making it one of 10 investment trusts with a track record of more than 50 years of income increases. It has a market-beating dividend yield of 4.9%.
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BlackRock World Mining returns to the top 10 in sixth place. The headwind of higher interest rates has reduced appetite for the riskiest areas of the market, which includes mining stocks. In addition, China missing out on a post-Covid boom, which was widely expected when the economy re-opened, has stoked fears over commodity demand. China is the dominant buyer in many commodity markets.
The trust has a dividend yield of 5.7%, but it's important to bear in mind that this is not progressive. If mining companies reduce dividend payouts, there will be less income for BlackRock World Mining to pay out. In its last financial year, to the end of December 2023, BlackRock World Mining's dividend was cut by -16%.
In seventh place is . The global portfolio, which is regarded as a potential one-stop shop for beginner investors due to being highly diversified, is managed by Paul Niven. It is a steady performer, but has notably underperformed rival Alliance Trust over the past one and three years. Both F&C and Alliance Trust adopt multi-manager approaches, where the stock picking is outsourced to a range of fund managers.
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Pershing Square Holdings (LSE:PSH) is in eighth place. It is managed by star investor Bill Ackman, who oversees a concentrated portfolio of US-listed stocks. Despite Ackman’s strong track record, Pershing Square consistently trades on a big discount, which is -26.9% at present.
Rounding off the top 10 are two tech trusts, Polar Capital Technology (LSE:PCT) and Allianz Technology Trust (LSE:ATT). The duo are the top performers in the top 10 over one year, with Allianz Technology having a slight edge in being up 54.7% versus 51.3% for Polar Capital Technology.
There’s little to separate the two in performance terms, and the same is true for their discounts, which stand at -8.5% for Allianz Technology and -7.4% for Polar Capital Technology. For those who think the AI theme has plenty of staying power, the tech trust duo offer investors a cheaper entry point for gaining exposure to an area that has seen both share prices and valuations sizzle.
Exiting the top 10 is India Capital Growth. This trust had appeared in the top 10 for the past four months, with investors drawn to India’s strong stock market performance over the past few years. In addition, some investors prefer India over China as an investment destination since they view India as carrying less political risk.
Top 10 most-popular investment trusts in April 2024
| Ranking | Investment trust | Change from March | One-year return to 29 April 2024 (%) | Three-year return to 29 April 2024 (%) |
| 1 | Scottish Mortgage | No change | 33.3 | -33.9 |
| 2 | JPMorgan Global Growth & Income | Up one | 25.1 | 43.3 |
| 3 | Alliance Trust | Down one | 28.4 | 34.6 |
| 4 | Greencoat UK Wind | No change | -3 | 26.7 |
| 5 | City of London | Up two | 1.4 | 22.1 |
| 6 | BlackRock World Mining | New entry | -1.9 | 15.4 |
| 7 | F&C Investment Trust | Up two | 13.2 | 22.7 |
| 8 | Pershing Square Holdings | Up two | 44.4 | 50.1 |
| 9 | Polar Capital Technology | Down four | 51.3 | 24.4 |
| 10 | Allianz Technology | Down four | 54.7 | 16.8 |
Performance data sourced from FE Fundinfo. Performance data to 29 April2024.Rankings are based on the number of“buys”during April2024.
