The Motley Fool

Opened a stocks & shares ISA? Consider these high-growth investment trusts

Image source: Getty Images.

If you have just opened a brand new stocks & shares ISA, you may be wondering where to invest your capital. With financial markets on edge at present, investing feels a little daunting right now.

One option is to invest in an investment trust. These can be bought and sold through your broker just like regular stocks, yet unlike regular stocks, investment trusts give you access to a whole portfolio of companies, managed by a professional portfolio manager. The advantage is that you can increase your diversification and lower your investment risk. 

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

Here’s a look at two growth-focused trusts that have performed exceptionally well in recent years. 

JP Morgan Mid Cap Investment Trust 

The JP Morgan Mid Cap Investment Trust (LSE: JMF) invests in medium-sized UK companies predominantly within the FTSE 250 index. The trust aims to achieve capital growth for investors, by putting it’s money in under-researched dynamic companies with strong growth potential and reliable income streams. The portfolio managers have the ability to use borrowing to leverage the portfolio in an attempt to generate higher returns.

An analysis of the portfolio reveals a number of stocks I’m quite bullish about. For example, Ashtead Group, JD Sports Fashion and OneSavings Bank, three stocks in the top five holdings, are all companies that I rate highly for their growth prospects.   

The performance of this trust over the last five years has been outstanding, with the share price returning 144% to the end of February. In contrast, the FTSE 250 index returned 64%. With an ongoing charge of just 0.86%, I believe this trust is a fantastic choice for growth investors with slightly higher risk tolerances. It currently trades with a 3% discount to its net asset value (NAV). 

Schroder UK Mid Cap Fund 

Another growth-focused investment trust that I rate highly is the Schroder UK Mid Cap Fund (LSE: SCP). This trust also invests in mid-cap equities with the aim of generating a total return in excess of the FTSE 250 (ex-Investment Companies) index. 

Over the last five years to the end of February, the trust has easily achieved that objective, with the share price returning an impressive 11.6% per year vs 10.4% for the benchmark. Since inception, SCP has delivered even higher returns for investors, generating total returns of 16.7% per year. Ongoing charges are just 0.93% per year. 

The portfolio manager of this trust has a unique investment process, taking a stock-specific approach with a focus on growth companies with strong management teams, good future prospects and strong business franchises. A look at the portfolio reveals some exciting growth stocks such as food and beverage concessions specialist SSP Group, veterinary pharmaceuticals group Dechra Pharmaceuticals and UK property website Rightmove

Given that the trust currently trades on a sizeable discount of 15% to its NAV, I believe now could be good time to take a closer look. 

“This Stock Could Be Like Buying Amazon in 1997”

I'm sure you'll agree that's quite the statement from Motley Fool Co-Founder Tom Gardner.

But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.

What's more, we firmly believe there's still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.

And right now, we're giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.

Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!

Edward Sheldon owns shares in JD Sports Fashion. The Motley Fool UK owns shares of SSP Group. The Motley Fool UK has recommended Rightmove. 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.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.