Finding an investment trust that you can buy, hold and watch your money growth for the long term isn’t easy. There are over 400 trusts out there (according to Hargreaves Landsdown), and each one follows a different strategy.
The good news is that some of them have been around for 100 years or more, so they have a lengthy record for investors to consider before buying.
One that has recently popped up on my radar is the Value and Income Trust (LSE: VIN), which has a unique investment approach.
A unique approach
Unlike other funds, Value and Income invests in both shares and property directly and has been successful with this strategy for over 30 years.
Set up in 1986, over the past 31 years the investment trust has grown its net asset value from 44p per share at inception, to 356p today, a compound annual growth rate of 7.2%. Including dividends the trust has returned 7.6% per anum over this period, smashing the FTSE All Share’s return of 4.7% per annum.
These steady, market-beating returns show that Value and Income’s strategy works but today, shares in the trust are on special offer. At the end of September, the net asset value was reported at 356p per share, so at current levels, the shares are trading at a discount to NAV of 23%.
As well as the discounted valuation, the shares support a dividend yield of 4.1%. So, if you’re looking for an undervalued investment trust with a proven record of creating value for investors, this one ticks all the boxes.
An investment in the future
Value and Income is a defensive trust with an impressive record but if you’re looking for something with a bit more risk, and a bet on future technologies, Polar Capital Technology Trust (LSE: PCT) might be for you.
Over the past five years, shares in Polar Capital have gained a little over 200% as it has benefitted from the global tech boom. And today, the company announced yet another strong portfolio performance for the six months to the end of October. In the period, it reported a 19% rise in its NAV per share, outperforming its benchmark, the Dow Jones World Technology Index by 2%.
According to management, gains came from companies benefitting from growth in payments (PayPal Holdings Inc), robotics (Cognex Corp) and iPhone content (Universal Display Corp).
Unfortunately, while Polar Capital is a great way to play future trends, high demand means that it trades at a slight premium of 0.5% to NAV. No dividend is offered, but with such a strong capital performance over the past five years, arguably income is not necessary.
Since the beginning of 2014, it has produced a total capital return of 731% for investors. Over the same period, the FTSE 100 has returned only 70% — it’s hard to ignore this scale of outperformance.
If you’re looking to invest in the technology of the future, with a fund that has a proven record of beating the market, Polar Capital might be the company for you.
Making money the easy way
Investment trusts can be a great tool to improve your wealth with minimal effort as they're usually run by experienced managers who know the ins and outs of the market. Value and Income is a great example of how trusts can create wealth for you with little effort on your part.
For more tips on how to manage your wealth, I highly recommend you check out this Foolish guide.
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Rupert Hargreaves owns no share mentioned. The Motley Fool UK owns shares of and has recommended PayPal Holdings. The Motley Fool UK has recommended Hargreaves Lansdown. 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.