Interactive Investor

December's 10 most-bought trusts

13th January 2015 10:04

Rebecca Jones from interactive investor

Money Observer Rated Fund Scottish Mortgage was the most popular investment trust among users of Interactive Investor in December, marking the 11th month the £3 billion global generalist trust has held on to the top spot.

Managed by Baillie Gifford's James Anderson and Tom Slater, Scottish Mortgage has grown its net asset value (NAV) by 19.9% over the 12 months to 12 January and 90% over three years to 12 January; more than any other global trust in each respective period.

While loathe to be labelled a technology trust, Scottish Mortgage is heavily invested in technology stocks, with the majority of its portfolio invested in the sector.

Its top-10 holdings including US internet giants Amazon, Google, Facebook and Chinese firms Alibaba (BABA) and Tencent (TCEHY).

Strong gains

The second most-bought trust was fellow Money Observer Rated Fund Biotech Growth Trust, which holds onto its spot for the second consecutive month.

Managed for Frostrow Capital by US biotech specialist Orbimed Capital, the trust has delivered 46% in NAV growth over the past year and 223% over the past three years as the biotechnology sector continues to enjoy strong gains.

BlackRock World Mining was the third most-bought trust, again for the second consecutive month, as investors continue to pile into the company despite well-publicised write downs that have seen it lose over £100 million in asset value in recent months.

Over the past year the trust has lost 22% of its NAV and 27% in share price terms while over three years it has shed 49% and 44% respectively.

The Finsbury Growth and Income Trust - another Money Observer Rated Fund - was the fourth most-bought trust in December. Star manager Nick Train has run the trust since 2000 during which time his highly concentrated, brand-led investment style has led to strong gains.

Over the past 10 years the trust has delivered 215% in NAV growth and 219% in share price growth, more than any other trust in the UK equity income sector. Train's portfolio of less than 30 holdings consists largely of well-known global names including Unilever, Heineken and Burberry.

Perennial favourite City of London Investment Trust was the fifth most-bought trust in December as investors continue to be enticed by its 4% annual dividend yield - the fifth highest in the UK equity income sector.

Money Observer Rated Fund Witan was the sixth most-bought fund last month following a strong year in which the company returned 16.5% in share price gains compared to an average of 11.1 from the global sector.

This has helped the trust move from an average 2.7% share-price-to-NAV discount over the past 12 months to a slight 0.7% premium.

Re-entering the top 10 for the first time in over a year is Neil Woodford's former charge Edinburgh Investment Trust, which was the seventh most-bought trust in December.

Criticism 

Woodford's former colleague Mark Barnett has managed the trust since March and has faced criticism from some who were unconvinced of his ability to manage his and Woodford's former funds effectively.

However over the past six months Edinburgh Investment Trust has delivered 5.2% in NAV gains compared to an average of just 2.1% from the UK equity income sector while its share price has grown 8% over the same period.

Money Observer Rated Fund Templeton Emerging Markets was the eighth most-bought trust as veteran manager Dr. Mark Mobius enjoys a change in fortune after three years of disappointing performance.

In the twelve months to 12 January the trust has returned 16% in NAV growth compared to just 10% over the past three years combined, over which period it is the worst-performing emerging market trust in both NAV and share price terms.

The £1.2 billion Money Observer Rated Fund Temple Bar Investment Trust was the ninth most-bought trust in December.

This is despite a disappointing year that has seen it shed 2.2% of both its NAV and share price as its large holdings in oil and gas majors Royal Dutch Shell and BP have weighed on the portfolio.

Money Observer Rated Fund Strategic Equity Capital was the 10th most-bought trust last month following its initial entry into the top 10 in November.

Managed by Stuart Widdowson since 2009, the trust is the best performer in the UK smaller companies sector over 12 months, delivering 16.7% in NAV gains compared to an average loss of 2.7% from the latter.

December's 10 most-bought trusts
RankFundSector% NAV return 1 year to 12 Jan% NAV return 3 years to 12 Jan
1Scottish MortgageGlobal19.990
2Biotech GrowthBiotechnology and healthcare46223
3BlackRock World MiningCommodities and natural resources-22-49
4Finsbury Growth & IncomeUK equity income7.377
5City of LondonUK equity income5.350.6
6WitanGlobal8.158.3
7Edinburgh Investment TrustUK equity income13.555
8Templeton Emerging MarketsGlobal emerging markets1610
9Temple BarUK equity income-2.249.6
10Strategic Equity CapitalUK smaller companies16.7110.4

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.