Most stocks and companies weren’t around when the Queen took the throne in 1952 but 35 investment trusts were already going strong.
As the UK prepares for a long Bank Holiday weekend of celebrations to mark the Queen’s Platinum Jubilee, we look at six investment trusts that have been going strong since before 1952.
1. Mercantile Investment Trust (MRC.L)
A £1.7bn ($2.1bn) trust run by Guy Anderson and Anthony Lynch at global investment house JPMorgan Asset Management (JPM).
It focuses on businesses that are doing their best to combat rising inflation and supply chain issues.
The trust focuses on smaller and medium-sized UK companies which have seen a sharp sell-off this year as the outlook for the domestic economy has soured. That resulted in Mercantile’s share price falling to a discount of more than 14% — despite the stock offering a yield of 3.9%.
2. Henderson Smaller Companies (HSL.L)
As many as 84% of the companies in the FTSE All Share index (^FTAS) are small or medium-sized. But a tracker will allocate just 18.5% of your cash to such companies, although they have been the best-performing parts of the UK market over the longer-term.
Henderson Smaller Companies trust provides exposure to companies such as Oxford Instruments (OXIG.L), a tech company worth £1.14bn, against the $2.14tn-valued Microsoft (MSFT). It offers a yield of 2.7% and is currently trading at a discount of about 17%.
3. TR Property (TRY.L)
This UK-based investment company listed on the FTSE 250 (^FTMC) index invests in European property equities and UK direct property.
It is the only investment trust which invests mainly in the shares of property companies rather than physical property.
About a third of the trust is invested in residential property, and its shares — trading at a 9% discount — provide a dividend income equivalent to around 3.5%.
The team, led by Marcus Phayre-Mudge, are at BMO (now owned by Columbia Threadneedle) and have worked together for many years, previously at Thames River Capital. They are widely regarded as the leading real-estate securities team in the UK, with a very strong track record.
4. Scottish Mortgage (SMT)
This is one of the racier global equity funds, which, while still managed from Baillie Gifford’s (USA.L) Edinburgh offices, has nothing to do with mortgages.
It invests in high growth stocks from the US to China, most of which are publicly listed but a proportion of which are unquoted. It was the investment trust universe’s poster boy during the pandemic when the impressive returns the fund had achieved over the previous decade went stellar.
The trust has taken a battering since the start of the year, as sectors like tech have sold off aggressively, but the long-term track record is outstanding — and the fees are also low too. This means its share price is trading on a significant discount of more than 10%.
5. Finsbury Growth & Income (FGT.L)
High-profile fund manager Nick Train apologised at a recent investment seminar for this trust's performance over the last 18 months, following on from an initial apology in May 2021.
The trust, which is sitting on 6.8% discount, has underperformed its benchmark and sector so far this year. It is down 13.8% up to 27 May, while the UK equity income trust sector is down 2.0%, much like the London stock market year-to-date.
However, a stock exchange announcement just revealed that Train has purchased 1.2 million shares of his own trust since the end of September 2020 — most recently 25,000 shares on 23 May. This means he now owns almost 2% of the trust and this suggests his conviction in his buy and hold approach remains resolute.
6. Temple Bar (TMPL.L)
Contrarian investor Ian Lance is co-head of the UK value and income team at Redwheel and co-manager of the Temple Bar investment trust.
He has recently argued that in this period opportunities abound in cyclical companies, telling Investment Week: "We believe some of the greatest value opportunities occur during periods of market stress when investors shorten their time horizons and focus on near term earnings trends rather than long-term value."
This investment trust with an equity income focus is trading on a discount of 5.4% with a yield of 3.5%.
Adrian Lowery, investments and markets analyst at DIY investing platform Bestinvest, said: “The oldest of these stock exchange listed funds were established as long ago as 1868 and is still going strong today — F&C Investment Trust.
“And the Association of Investment Companies has revealed that 35 such vehicles — with current aggregate assets of £55bn – were in existence at the time of the Queen’s accession.
“One of the best known of these, Scottish Mortgage investment trust, has recorded an impressive share price total return (so including re-invested dividends) over the last 30 years of 3,480%.
“And Scottish Mortgage — which has suffered something of a share price reversal this year amid the global tech and growth stock sell-off — is one of six of those 35 venerable investment trusts to be named on Bestinvest’s Best Funds list.
Read more: Stocks: Should investors sell in May?
“This list of approved funds that the investment research teams at Tilney Smith & Williamson (the wealth manager that owns Bestinvest) maintains is constantly updated as funds fall in and out of favour according to a number of rigorously enforced selection rules. Twice a year we publish the list as a reference document, the Best Funds List, for investors to pore over and the latest was released in February.”
“As well as Scottish Mortgage, two of the companies on the AIC’s list were featured on that list: Henderson Smaller Companies and TR Property. Since then, three more have attained approved status from our investment research team and are likely to appear on the next Best Funds list later this year: Mercantile, Finsbury Growth & Income and Temple Bar,” Lowery said.