August’s 10 most-bought trusts
Terry Smith’s Fundsmith Emerging Equities Trust (Feet) was a popular choice in August among investors who use our sister website Interactive Investor.
The trust has entered the top 10 for the first time, taking fifth spot. Its previous best position was 11th, achieved in June 2014, the month the trust launched. At the time demand for the trust was high, with investors who did not buy ahead of the float sending Feet to a big premium in the first couple of days following its listing.
Many investors have bought on the back of Smith’s success with Fundsmith Equity, which since launch in August 2011 has made gains of 188 per cent.
But as our associate editor Andrew Pitts pointed out in a recent exclusive interview with Smith, investors in Feet have so far had much less to celebrate. From inception to the end of August, the share price is up 11.5 per cent.
As Pitts notes, performance has so far been rosier in 2016, with the trust up 17 per cent year to date. That is likely to be one of the drivers behind the trust soaring into the top 10 list for the first time.
The top two most popular trusts remain unchanged, with Scottish Mortgage leading the way, followed by Woodford Patient Capital. In August the number of investors buying Scottish Mortgage was almost double the number who bought Woodford Patient Capital, which highlights the global equity portfolio’s popularity with Interactive Investor clients.
Scottish Mortgage has been the most-bought trust on Interactive Investor every month since February 2014. Only once, in April 2015, it was briefly toppled by Woodford Patient Capital during its record-breaking £800 million launch.
One of the reasons the trust is so popular is down to the fact that over the years it has made a conscious effort to take advantage of economies of scale, reducing charges for investors on the back of growth in the trust's assets, which total £4.4 billion.
Lead fund manager James Anderson has pledged to ‘continue bringing down costs for shareholders’. The trust's ongoing charge of 0.45 per cent is much lower than those of global trust rivals, which typically tend to be around 1 per cent.
Taking third spot in the top 10 is Witan, climbing four spots month on month, while Finsbury Growth & Income takes fourth position.
Outside the top five BlackRock World Mining is in sixth place, followed by Biotech Growth. Both highly specialist trusts have slipped two positions from July.
But the biggest faller is City of London, which has dropped from third to eighth spot. Nonetheless the trust, managed by Job Curtis, is a perennial favourite with income investors, thanks to a long track record of year-on-year dividend increases.
F&C Smaller Companies and Foreign & Colonial complete the top 10.
It is noticeable that globally focused trusts dominate the top ten, a trend that has been playing out for a couple of months, given the challenges and uncertainty facing the UK market following June’s Brexit vote.
RIT Capital Partners exits the top 10, following Feet’s rise to fifth spot. The trust was recently tipped in our Investment Trust Bargain Hunter series as a trust where it may pay to take profits due to its premium being close to its highest level in five years.
|Rank||Fund||AIC Sector||Change since July||Share price total return 1 month to 6 September (%)||Share price total return 3 years to 6 September (%)|
|2||Woodford Patient Capital||UK All Companies||---||4||N/A|
|4||Finsbury Growth & Income*||UK Equity Income||+2||2||46|
|5||Fundsmith Emerging Equities Trust||Global||New Entry||1||N/A|
|6||BlackRock World Mining*||Commodities and natural resources||-2||-4||-28|
|7||Biotech Growth Trust*||Biotechnology and healthcare||-2||-8||69|
|8||City of London*||UK Equity Income||-5||3||29|
|9||F&C Global Smaller Companies*||Global||+1||2||43|
|10||Foreign & Colonial*||Global||-1||2||46|
*denotes Money Observer Rated Fund