Investment Trusts

Hi Everyone.
I see Scottish Mortgage is available on the investing universe. What are people’s thoughts on investment trusts ?
I have just 2 holdings in my SIPP with HL. City of London Investment Trust and Berkshire Hathaway B.
Of course once I’m onboard with Freetrade, I will leave my HL SIPP to grow and drip :droplet: all new money into Freetrade :selfie:t4::point_right:t4::pound::ok_hand:t4:.

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I’ve looked at this briefly and it’s something I’m considering. Great way to spread out investment over a greater range than you get with company shares due to the cost. Think ETFs also serve this purpose to an extent though so it really depends on the global spread the trust has invested in

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I invest in both ETFs and investment trusts, so have a mixture of passive and active investments in my portfolio. My ITs include both Scottish Mortgage and City of London.

I’ve invested in them mostly to bring in dividend income (which is reinvested). Scottish Mortgage I’ve invested in for growth, although it has increased its dividend consecutively for 35 years.

Hopefully, in time, more investment trusts will be available on the investing universe.

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SMT is a really well-run investment trust with quite a unique investment style. I acknowledge that it is not for everyone.

James Anderson is part/head of Baillie Gifford’s Long Term Growth group and they invest for the long term. When I say long term, I’m talking about 10-20 years down the road. For example, he believes that China will be the largest economy in the world in the next decade (I think this is quite consensual) and as a result has a ton of these Chinese technology companies (Tencent, Alibaba, Ant Financial, Baidu, Meituan-Dianping and Pinduoduo). He has also backed Amazon since 2003.

What’s interesting is that he can invest about 25% of the fund in illiquid private companies and over the years has been increasing those bets. The reason for this is because he believes that most of the shareholder value accrues will the company is private (again, pretty consensual thinking but not many people can execute in liquid instruments, except in an investment trust). The trust owns Airbnb, Ant Financial, TransferWise, Grail, etc. He has been quite successful as well, picking up Spotify, NIO, Delivery Hero, Dropbox and HelloFresh before their IPO.

I’d say this is a great long term growth instrument but can be highly volatile due to the concentrated positions in certain names. Also, highly correlated to a strong USD due to the underlyings.

Disclaimer: Not investment advice!

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Thanks for the insight, I need to start looking into trusts!

Also props on the profile pic :wink:

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I’ve put in a request for City of London Investment Trust. Yield generally around 4% and quarterly payments. 50+ years of rising dividends also.
:freetrade:

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Sometimes paid from capital. So be caution about the ‘weve paid rising dividends for 3 millennium now’ claims.

Not always. Not every IT. Just a point.

Otherwise, fill yer boots. TEM, SMT, CTY, EWI, EDIN, just some of my holdings over the years.

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Plenty of market screeners that can find this information. Going through you, and you through us, seems needlessly messy.

Aside from that, some example tickers above, take a look. I personally held SMT but exited at ~550 with an 11% profit. Far too volatile in this age of trade war uncertainty.

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BNKR - Bankers Investment Trust. 50+ years dividend increases. Quarterly dividends. 2.2% yield.

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Look at the FT universe spreadsheet…

Ping the finkiAPI use the ukDividendYield and ukDividendYieldv2 functions

For example, BNKR

https://finki.io/callAPI.php?isin=GB0000767003&function=ukDividendYield

or

https://finki.io/callAPI.php?isin=GB0000767003&function=ukDividendYieldv2

(since calc methods of div yield can vary)

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BNKR available on Freetrade :freetrade:

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CTY - Available on Freetrade :freetrade:
A buy and hold in my portfolio.
4.5% ish yield currently. Quarterly dividends.

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@Richard Is there a good UK website to do DD on British inv. trusts?

Hi Shane, DD ?

Due Diligence…research :sweat_smile:

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I had direct debit in my head :joy:
I look in every nook and cranny on the internet.
You tube, search for news, look everywhere but nowhere in particular :joy:
Sorry that’s not much help !

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I’ve found these on Pitchbook and it gives good information but I only have access to Pitchbook through work and won’t be here for that much longer so need a free UK website :joy:

FY19 on the left going back to FY14. Problem is they convert it to USD so even the share price in those statements is in USD

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AIC would be a reasonable place to start

https://www.theaic.co.uk/

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@Richard Why would you hold City of London Trust? It’s 5 years performance has been -13.62% and it trades at a premium to NAV.