September's 10 most-bought trusts

Investors continue to favour more established investment trusts, with Money Observer Rated Funds Scottish Mortgage, Biotech Growth, Finsbury Growth & Income and City of London all ranking within the top five most-bought trusts on Interactive Investor in September.

The exception to the rule is Woodford Patient Capital, which was the second most-bought trust last month for the second consecutive month.

The trust enjoyed a brief period at the top following its record-breaking launch in April this year, but was soon knocked off by Scottish Mortgage, which - excluding April - has been the most-bought trust on Interactive Investor for more than 18 months.

The only new entry to the table this month was Money Observer Rated Fund Henderson Smaller Companies which was the tenth most-bought fund in September following a one-month absence.

Dividend heroes

UK equity income fund City of London climbed two places to the fifth slot last month. Launched in 1891, City of London has the longest track record of dividend increases of any UK listed investment trust.

According to the Association of Investment Companies (AIC), City of London has hiked its dividend every year for the past 49 years. The trust currently yields 4%, which is 0.5% above the sector average of 3.5%.

Scottish Mortgage and Henderson Smaller Companies are also top dividend payers, having increased their payouts to shareholders every year for the past 32 years and 12 years respectively. Witan, September's seventh most bought fund, is also one of the AIC's so-called 'dividend heroes' having increased its dividend every year for the past 40.

Stockmarket volatility

Jupiter European Opportunities - also a Rated Fund - climbed one place to be the eighth most-bought fund in September. BlackRock World Mining, Witan and Fidelity China Special Situations all fell one place to sixth, seventh and ninth place last month respectively.

All of the most-bought trusts experienced tough trading conditions in September, with not a single one delivering a positive share price return.

Biotech Growth was the worst performer, shedding nearly 20% in the month to 30 September as the biotechnology sector experienced one of its worst periods of the past three years.

Woodford Patient Capital was the second worst performer as shares shed nearly 8% of their value, bringing the trust's share price to net asset value premium down to 9.4% from a high of more than 15% earlier in the year.

This is, however, still the highest premium in the UK all companies sector by a country mile (the sector average is currently a 0.6% discount).

The best performer was Finsbury Growth & Income, which shed just 0.4% over the period as manager Nick Train's famously defensive positioning paid dividends.

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.