Picking stocks can be a complicated and time-consuming process. Therefore, sometimes it is better to leave stock picking to the experts.
However, a large number of ‘expert’ stock pickers fail to produce value for their shareholders. With this being the case, you need to be careful where you decide to invest your hard-earned money.
Here are two investment funds that have a track record of creating value for their investors, no matter what the market throws at them.
RIT Capital Partners
RIT Capital Partners (LSE: RCP) is one of a handful of companies in the FTSE 250 that is still majority-owned and managed by its founding family. The trust was initially set up by the Rothschild family to preserve and grow their wealth over the long run.
Its managers have done an outstanding job of meeting this goal. A sum of £10,000 invested in RIT at inception in 1988 would be worth £326,000 today. That’s a total annual return of approximately 12.1% per annum.
The trust has achieved this return by investing in a basket of assets, including real estate private equity and derivatives.
Where the firm excels is protecting investors’ capital in volatile markets. That’s why the company could be a great addition to a retirement portfolio.
Unfortunately, due to its defensive nature and track record of creating value for shareholders, RIT is not cheap. It is currently dealing at a premium to net asset value at 5.5%.
Still, considering the company’s track record of creating value for investors, it might be worth paying this premium to be part of the trust’s shareholder register.
It also supports a dividend yield of 1.6% at a time of writing, which is more than you get on most savings accounts.
As such, if you are looking for a trust that can protect your wealth in all market environments, it could be worth taking a closer look at RIT.
Polar Cap Technology Trust
The technology sector has been one of the market’s best-performing industries over the past decade.
However, picking tech stocks can be a risky process. That’s where the Polar Cap Technology Trust (LSE: PCT) can help.
This trust has been navigating the technology industry since 1996. Over the past 10 years, the trust has returned 21.7% annualised. That’s enough to turn an initial investment of £10,000 into £71,000 today.
This track record suggests that Polar’s managers know how to pick tech stocks. While the trust does not offer the sort of asset diversification provided by RIT, its long-term returns suggest that if you’re looking to build a sizeable financial nest egg, this fund is certainly worth considering.
The good news is, today you can buy the trust as a discount. It is currently trading at a discount of 2% to its net asset value. It does not pay a dividend to investors, although considering Polar’s capital growth over the past decade, that’s not too much of a disaster.
The largest holding in the portfolio, making up 9.5% of assets under management, is technology giant Microsoft. The trust charges an ongoing management fee of 1.3% as well as a performance fee for good returns.
Rupert Hargreaves owns no share mentioned. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK owns shares of and has recommended Microsoft and recommends the following options: long January 2021 $85 calls on Microsoft and short January 2021 $115 calls on Microsoft. 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.