Investment trusts give UK investors a unique way to invest money in a range of different assets and shares managed by expert teams looking to grow or preserve their funds.
These funds are all very different in their style and approach. So it can be useful to see which trusts are popular among investors in the UK. In this article, to help you on your investing journey, I reveal the top picks from the Interactive Investor platform and give you some investment tips to help you with your portfolio.
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How does an investment trust work?
Before jumping into the popular picks, it’s worth doing a quick refresher on investment trusts, because they’re a really interesting way of investing.
They are basically set up as a company listed on a stock exchange with a fixed number of shares. This set number of shares gives trusts a distinct advantage over ordinary investment funds.
Because only the shares are bought and sold, the people managing the fund don’t have to sell the assets they own if investors want to take their money out. This allows these trusts to invest with a long-term outlook, something we’re big advocates of here at The Motley Fool.
There’s loads of variety when it comes to investment trusts, and they all have specific goals or niches, so it’s likely you’ll find at least one that suits your investing strategy. Most come with low fees, making them an affordable option for expert active management.
What were the 10 most popular investment trusts last month?
These were the top 10 most popular investment trusts bought on the Interactive Investor platform (from ISAs, SIPPs, and trading accounts) during December:
| Position | Investment trust | Sector |
| 1 | Scottish Mortgage (SMT) | Global |
| 2 | Smithson Investment (SSON) | Global Smaller Companies |
| 3 | HarbourVest Global Private Equity (HVPE) | Private Equity |
| 4 | Polar Capital Technology (PCT) | Technology and Media |
| 5 | Allianz Technology (ATT) | Technology and Media |
| 6 | City of London (CTY) | UK Equity Income |
| 7 | Capital Gearing (CGT) | Flexible Investment |
| 8 | Monks (MNKS) | Global |
| 9 | Edinburgh Worldwide (EWI) | Global Smaller Companies |
| 10 | Personal Assets (PNL) | Flexible Investment |
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Where can you find good investment trusts?
Before you go shopping for an investment trust, the first thing to do is make sure you’re comfortable with your own investing goals.
Don’t go out and buy a fund just because it’s popular. It may be the case that a fund’s objectives are completely different from your own. There’s a trust for just about everything you can imagine. Some examples of sectors and options include:
- Private equity
- Technology
- Income (through dividends or bonds)
- Small cap businesses
- UK firms
So, once you have an idea of what interests you, the next step is to research different trusts that are a good fit. You can find loads of detailed information to help you over at Morningstar and of course, at The Motley Fool.
How do you actually invest in an investment trust?
Once you’ve picked out the fund for you, the next step is to invest. To do this, you’ll need a top-rated share dealing account that gives you enough choice to access the investment trust you want.
It’s a good idea to buy shares on a platform with low costs because these funds do charge an extra fee. Another top tip is to make use of an account such as the Interactive Investor Stocks and Shares ISA. Doing this will mean that you won’t pay tax on your investment gains.
Just remember that all investing carries risk and some funds are riskier than others. So make sure you do plenty of research and only invest what you can afford to lose.
