Investment Trusts


#1

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:.


(Emma) #2

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


#3

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.


(Big Boss) #4

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!


(Jeff puckering) #5

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

Also props on the profile pic :wink:


#6

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:


(Justin T) #7

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.