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

To find out more information about Securities Trust of Scotland visit MartinCurrie.com

IMPORTANT INFORMATION

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.

Recommended

4 cheap investment trusts to buy and 3 to avoid
Investment trusts

4 cheap investment trusts to buy and 3 to avoid

Valuing funds that hold unlisted assets can be tricky, but some discounts look excessive.
25 Nov 2022
2 investment trusts with growing dividends: which one should you invest in?
Investment trusts

2 investment trusts with growing dividends: which one should you invest in?

They might not have spectacular yields but these two trusts have increased their dividend every year for 55 years.
24 Nov 2022
The MoneyWeek portfolio of investment trusts
Investment trusts

The MoneyWeek portfolio of investment trusts

MoneyWeek has created a low-maintenance portfolio of investment trusts.
17 Nov 2022
2 cheap investment trusts yielding up to 6%
Investment trusts

2 cheap investment trusts yielding up to 6%

These 2 investment trusts are both trading at less than net asset value and have plans in place to grow their dividends substantially.
17 Nov 2022

Most Popular

Wood-burning stove vs central heating ‒ which is cheapest?
Personal finance

Wood-burning stove vs central heating ‒ which is cheapest?

Demand for wood-burning stoves has surged as households try to reduce their heating costs this winter. But how does a wood burner compare with central…
21 Nov 2022
Fan heater vs oil heater – which is cheaper?
Personal finance

Fan heater vs oil heater – which is cheaper?

Sales of portable heaters have soared, as households look to cut their energy costs. But which is better: a fan heater or an oil heater? We put them t…
21 Nov 2022
Santander launches new bank account – is it any good?
Bank accounts

Santander launches new bank account – is it any good?

Santander’s new accounts gives you up to £20 cashback a month and 4% interest rate on savings.
25 Nov 2022