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.
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.
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. Indeed, the Allianz Technology Trust is a great example of how trusts can create wealth for you with little effort on your part.
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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.