Three investment trust advantages in current markets
SPONSORED CONTENT – Mark Whitehead, Portfolio Manager, Securities Trust of Scotland, discusses how investment trusts can help in the current markets
Investment trusts offer certain features that help me, as a portfolio manager, during a period like this to deliver for you as investors.
Investment trusts are the original collective investment portfolio. They have been part of the investment landscape for over 150 years – surviving and thriving through wars, famine and umpteen economic crises.
The longevity and success of Investment Trusts owes much to their structure, which enables them to look through volatility in the markets in order to focus on delivering more consistent income and capital returns to shareholders.
As a ‘closed end’ investment vehicle, the number of shares in the company are largely fixed and traded on the stock exchange. This avoids the manager having to sell holdings at an inopportune time or close the fund altogether – as has been the case recently for Neil Woodford and several property funds using different structures.
Significant crises can also disrupt the flow of dividends from companies in an investment portfolio. Investment trusts, however, can hold back up to 15% of income in the good times to make up for shortfall in the bad times and many maintain a smoother income stream for investors than alternative investments.
The added flexibility to borrow also means that trusts can increase exposure at times when the market is cheaper, though this can magnify returns – up or down!
You can find out lots more about investment trusts at the Association of Investment Companies’ website at www.theaic.co.uk
Past performance is not a guide to future returns. Capital at risk.
Information correct at time of publication. This information is issued and approved by Martin Currie Investment Management Limited. Opinions contained in this article are those of the named manager only. Market and currency movements may cause the value of shares, and the income from them, to fall as well as rise and you may get back less than you invested. Shares are traded on a stockmarket, will fluctuate and, may not always reflect the value of the underlying assets.
Martin Currie Investment Management Limited, registered in Scotland (no SC066107). Registered office: Saltire Court, 20 Castle Terrace, Edinburgh EH1 2ES. Tel: 0808 100 2125 Fax: 0870 888 3035 www.martincurrie.com. This company is authorised and regulated by the Financial Conduct Authority. Please note that calls to the above number may be recorded.