October's 10 most-bought trusts

Investment trusts invested in UK and global equities dominated Interactive Investor's most-bought list in October, with Scottish Mortgage and Woodford Patient Capital holding onto the top spots.

Scottish Mortgage, a Rated Fund on our sister website Money Observer, was the most-bought trust for the sixth consecutive month in October. The £3.2 billion global generalist has been Interactive Investor's most popular closed-ended fund for 19 of the past 20 months due in part to its strong long-term performance record and low fees.

Scottish Mortgage is the second best-performing trust in the 36-fund large global sector over three, five and 10 years to 1 November, returning 89%, 110% and 278% in share price gains respectively, and boasts an ongoing charges figure of just 0.51%.

UK equity income stars

Scottish Mortgage was unseated from the top spot for only one month in April this year when UK equities trust Woodford Patient Capital replaced it after its record-breaking launch in the same month.

The latter was the second most-bought trust in October for the third consecutive month. This is despite Woodford Patient Capital having shed 10% of its value in the three months to 1 November while it trades on the second highest share price to net asset value (NAV) premium in the UK all companies sector (6.1%).

Money Observer Rated Fund Finsbury Growth & Income climbed one place from September to be the third most-bought fund in October. The enduringly popular trust is the third UK equity income vehicle to make it into the top 10 in October, underling investors' continued thirst for yield in a low interest rate environment.

Fellow Money Observer Rated Fund City of London as well as the Edinburgh Investment Trust - a former charge of Neil Woodford - were the other two UK equity trusts to make it into Interactive Investor's top 10 in October, as the fifth and ninth most bought trusts respectively.

Despite a worrying period for Edinburgh following Woodford's departure in January 2014, the trust has performed well under new manager Mark Barnett and over one year has returned 16.6%; this makes it the second best performer in the sector during the period.

In contrast City of London has struggled, returning just 7.3% over one year and shedding 3% over three months. However, City has more of an income bias than Edinburgh, yielding 4% compared to 3.3% from the former, while it has raised its dividend every year for the past 50.

Special favourites

High-profile specialist trusts also continued to prove popular in October. The Biotech Growth Trust fell one place from September to be the fourth most-bought last month as the volatility seen in the biotechnology sector over the summer appears to be abating.

While over three months Biotech Growth has shed a painful 20.5%, it has recovered some ground recently, with shares gaining 4% last month.

BlackRock World Mining also continued to prove popular despite the steep losses seen in recent months and years as it clung onto its place as sixth most-bought trust. This is thanks in part to the trust's impressive 9.4% yield, although doubts continue to be raised about the sustainability of this dividend.

Fidelity China Special Situations also climbed one place to eight most-bought trust in October as a strong rally in Chinese markets last month helped manager Dale Nicholls to recover some of the steep losses endured over the summer.

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.