These 2 investment trusts are perfect for your first £1,000

Only just started investing? These two trusts could be for you.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Healthcare is one of the most defensive industries in the world, and it’s one of the best sectors to invest in for this reason. 

The BB Healthcare Trust (LSE: BBH) does all the work for you when it comes to picking the best healthcare firms. Indeed, the trust holds healthcare investments of all shapes and sizes including biotechs, distributors, generic drug producers, managed care operators, speciality pharmaceuticals businesses and other companies in the business of selling treatments to customers, such as Walgreens Boots.

This defensive collection of stocks has yielded an impressive return for investors, even though the trust is only a little over a year old. For the year to 30 November 2017, BB Healthcare’s net asset value per ordinary share rose 17.2%, beating its benchmark, the MSCI World Healthcare Total Return Index by 2.8% over the same period. 

Defensive income 

Founded as an income-yielding healthcare play, BB Healthcare also offers something for dividend investors. Alongside the trust’s full-year 2017 results, which were published today, management announced that the company would be paying a distribution of 1.75p to investors for a full-year payout of 3.5p. Management expects there to be more cash available for distribution during 2018 and is planning a total payout of 4p. 

While the income is a nice touch, BB Healthcare’s most attractive quality is the company’s exposure to the healthcare sector. With an ever-growing, ageing global population, it’s almost certain that the demand for healthcare and profits of providers will rise steadily going forward, virtually guaranteeing returns for investors. 

That’s why I believe that this investment trust is one of the best investments for beginners as there’s not much that can really go wrong over the next few decades.

Diversified tech play 

Another investment trust that I believe would fit perfectly into a beginner’s portfolio is Allianz Technology (LSE: ATT). This is an excellent buy for both experienced and beginner investors alike due to its exposure to the fast-growing US tech sector

Tech investing is a risky sport, especially for UK investors who have the added complication of dealing in overseas securities and a different currency so building a diversified portfolio of US tech stocks can become an expensive task. That’s why Allianz is a great buy. The trust has exposure to all of the most significant tech stocks in the US, with Amazon.com, Apple, Microsoft and Facebook accounting for 20.5% of the portfolio, but there are none of the complications that can come with buying US shares. 

Allianz has also proved that it is a safe bet for investors. Over the past five years, the trust has returned 234%, outperforming its benchmark by 23%. The one downside is that the company does not offer shareholders a dividend, although, with an average capital return of 23.7% over the past five years, investors aren’t losing out. 

Allianz is trading at a slight 3% discount to its net asset value, and the fund charges 1% per annum in fees, which looks a tad expensive. But when you consider its historical returns, plus the overseas exposure, it’s not too demanding. 

So for beginners looking for exposure to the fast-growing tech sector as well as the slow and steady healthcare industry, Allianz and BB Healthcare seem to be the perfect duo. 

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Rupert Hargreaves owns no share mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Teresa Kersten is an employee of LinkedIn and is a member of The Motley Fool’s board of directors. LinkedIn is owned by Microsoft. The Motley Fool UK owns shares of and has recommended Amazon, Apple, and Facebook. The Motley Fool UK has the following options: long January 2020 $150 calls on Apple, short January 2020 $155 calls on Apple, short March 2018 $200 calls on Facebook, and long March 2018 $170 puts on Facebook. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

5 steps to start buying shares with under £500

Learn how this writer would start buying shares with a few hundred pounds in a handful of steps, if he…

Read more »

Young happy white woman loading groceries into the back of her car
Investing Articles

The FTSE 100 offers some great bargains. Is this one?

Our writer digs into one FTSE 100 share that has had a rough 2024 to date, ahead of its interim…

Read more »

Smiling white woman holding iPhone with Airpods in ear
Investing Articles

£9,000 of savings? Here’s my 3-step approach to aim for £1,794 in passive income

Christopher Ruane walks through the practical steps he would take to try and turn £9,000 into a sizeable passive income…

Read more »

Group of young friends toasting each other with beers in a pub
Investing Articles

I’d buy 29,412 shares of this UK dividend stock for £150 a month in passive income

Insiders have been buying this dividend stock, which offers an 8.5% yield. Roland Head explains why he’d choose the shares…

Read more »

Red briefcase with the words Budget HM Treasury embossed in gold
Investing Articles

Could the new UK budget spell growth for these 6 FTSE stocks? I think so!

Mark David Hartley considers six UK stocks that could enjoy growth off the back of new measures announced in the…

Read more »

Investing Articles

With a 6.6% yield, is now the right time to add this income stock to my ISA?

Our writer’s looking to boost his Stocks and Shares ISA. With this in mind, he’s debating whether to buy a…

Read more »

Dividend Shares

This blue-chip FTSE stock just fell 12.5% in a day. Is it time to consider buying?

Smith & Nephew is a well-known, blue-chip FTSE stock with a decent dividend yield. And its share price just dropped…

Read more »

Investing Articles

At 72p, the Vodafone share price looks to be at least 33% undervalued to me

Our writer looks at a number of valuation measures to determine whether the Vodafone share price reflects the fair value…

Read more »