September's 10 most-bought trusts

Scottish Mortgage continued to be the investment trust most bought by Interactive Investor clients in September - a position it has held since May 2015.

The top of the table shows little change, with Woodford Patient Capital trust staying in second place; however, Finsbury Growth & Income leapfrogs Witan into third.

A number of high-octane trusts sit lower down the table, with Biotech Growth and BlackRock World Mining in sixth and seventh places respectively.

Rebecca O'Keeffe, head of investment at Interactive Investor, notes the trend of investors continuing to favour high-risk, high-reward strategies, with commodities and emerging markets proving attractive. "With markets approaching recent highs," she adds, "this strategy has delivered so far."

Scottish Mortgage dominance

Scottish Mortgage, managed by Baillie Gifford's James Anderson, continues its popularity - and its performance figures show why, with the globally focused, technology-dominated trust providing long-term holders with a gain of almost 200% over five years.

Another reason why investors value it is for its low fees - its ongoing charges figure stands at just 0.45%, compared to rivals in the global sector who typically tend to charge around 1%.

City of London is in fifth place, having climbed three places since AugustWoodford Patient Capital, the trust that ended Scottish Mortgage's long initial run atop the table in April 2015, stays as second most-bought trust for the fourth month running.

This offering, which provides exposure to a mix of early-growth businesses as well as mid and large-cap stocks and is run by star manager Neil Woodford, saw a record-breaking launch in April last year, but performance over the year to 6 October shows a loss of 12.2%. It is, though, ahead of its sector over the last three months, with a 16.9% return.

As in the most-bought funds table, Nick Train takes third place as Finsbury Growth & Income pushes Witan into fourth. Both of these trusts are Money Observer Rated Funds. Fellow Rated Fund City of London is in fifth place, having climbed three places since August.

Dividend heroes popular

Especially in the current low interest rate environment, the latter two are valued by investors for their long track records (over 40 years) of increasing their dividends. Witan's payout is relatively small at 1.6%, while City of London's is a higher 3.9%.

Other dividend heroes in this month's table include Scottish Mortgage, Foreign & Colonial (eighth most-bought trust) and Bankers Investment Trust (10th most-bought). Bankers was the biggest climber, having been out of the top 10 in 14th place last month.

Elsewhere, after making its debut in the top 10 in August, Fundsmith Emerging Equities slipped down to ninth place from fifth. It has benefited since Brexit as investors have looked further afield for their investment opportunities. It has returned 16.4% in the year to 6 October.

If Terry Smith is proved correct in his view that the trust will eventually outperform his successful open-ended offering, Fundsmith Equity, investors will be well rewarded - Fundsmith Equity has returned 181% over the past five-year period.

This article was originally published by our sister magazine Money Observer here

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.