Due to all the choice, it’s perfectly possible to build a diversified and high-quality portfolio through investment trusts. Here are two from the FTSE 250 I like in April.

Private markets

Schiehallion Fund (LSE:MNTN) is a newcomer to the mid-cap index, having joined in March. While it has more than doubled in 12 months, the trust remains 36% below highs reached back in 2021, when growth stocks overheated.

So what does this quirkily-named Baillie Gifford-run fund do? It invests in later-stage growth companies not yet listed on stock markets. Familiar holdings include SpaceX, TikTok owner ByteDance, payments giant Stripe, and Claude AI maker Anthropic.

What I like here is that Schiehallion is quite picky about which businesses it invests in. In 2024, it only made six new investments from more than 600 financing rounds it looked at.

We continue to judiciously deploy capital only into those companies that we regard to represent the very best private growth opportunities on offer.

Schiehallion Fund.

In the first half of 2025, net asset value (NAV) increased 9.9%, driven by top holdings SpaceX and Bending Spoons. The latter’s an Italian software company that buys and improves well-known-but-underperforming apps or platforms (it recently acquired Vimeo and AOL).

Another thing I like is that the trust’s willing to stay invested after a firm goes public. Funds like this normally exit their holdings to redeploy cash. But here we see listed stocks including Wise, Affirm, Chime and Tempus AI still in the portfolio. The aim is to capture more of a growth company’s lifecycle.

Looking ahead, one risk is that interest rates might be heading higher, which could put pressure on growth stock valuations. And while a successful blockbuster SpaceX IPO this summer could send Schiehallion shares flying even higher, the opposite’s also true.

Weighting things up, I’m bullish on this unique trust’s long-term prospects. The portfolio contains some exciting growth companies, including Anthropic, Revolut, SpaceX, Databricks, and UK self-driving software firm Wayve.

Out-of-favour stock

My second pick is Finsbury Growth & Income Trust (LSE:FGT), which focuses primarily on UK shares. Now, this one’s had a torrid time, falling 25% since January 2025. Over five years, Finsbury has declined 17.5%, significantly underperforming the FTSE All-Share index.

Admittedly, there’s a risk that the stock-picking skills of fund manager Nick Train may no longer be as sharp as they once were. Because many picks have performed very poorly in recent years, including Diageo, Fevertree Drinks and Burberry.

In 2026, the trust has been hit by the software sell-off, as it holds Sage, Experian, London Stock Exchange, RELX, Rightmove, and Autotrader. In hindsight, piling into so many software/data platforms was perhaps a tad rash.

Taking a contrarian view however, many of these stocks now appear fundamentally undervalued to me. Sage, for example, is trading at just 15 times next year’s earnings. Autotrader’s a mere 12.3 times.

On top of this, Finsbury itself is trading at a 7.3% discount to NAV. There’s also a 2.8% dividend yield.

Given the potential for turnarounds at key holdings like Diageo, Experian and Sage, I think the trust’s worth considering near 725p.

The post 2 top FTSE 250 investment trusts to consider in April appeared first on The Motley Fool UK.

Is quality investing finished? Or can it still make investors wealthier?

What is it?

For those wondering, this style focuses on high-quality businesses with high returns on capital, reliable cash flows, and strong balance sheets. As such, they’re often very established businesses.

Indeed, well-known quality investor Terry Smith even makes a point to note the average year of foundation for the companies in his Fundsmith portfolio. It’s currently 1919, meaning they’re collectively over a century old!

While there’s some crossover, these investing styles can broadly be separated into the following four camps.

Out of favour

In 2025, there was a notable rotation out of many quality shares. According to Hargreaves Lansdown, Europe’s quality market was 23 percentage points behind value in 2025, as of December. The gap in emerging markets was over 15 points and 13 in the UK.

There’s been a sudden revival in cheap UK value and cyclical stocks. Meanwhile, defence stocks such as BAE Systems have surged due to geopolitical shocks.

In the US, some AI-related growth stocks have exploded higher, most noticeably Palantir and Nvidia. These aren’t typical shares a quality fund manager would buy because they either don’t produce reliable cash flows or they’re very highly valued.

Terry Smith and Nick Train (another quality-focused investor) have both underperformed their respective benchmarks for five consecutive years.

Sectors commonly viewed as ‘defensive’, including healthcare, consumer staples, and telecoms, have still grown in value but lagged. These areas often form the backbone of quality-focused funds because they’re expected to offer steady demand and reliable earnings.
Hargreaves Lansdown.

The advantage of flexibility

When fund managers pivot away from a particular philosophy, it’s called ‘style drift’. This is generally viewed negatively, as opposed to ‘sticking to their guns’.

This is one advantage retail investors like myself have — not being bound by a strict investment mandate. I’m free to invest wherever, whether that’s quality, cheap value/dividend, or disruptive growth stocks. Or investment trusts and exchange-traded funds (ETFs).

To give a flavour, here are four very different investments that outperformed for my portfolio in 2025:

This shows how staying diversified across themes/sectors/styles can produce strong returns.

FTSE 250 trust

Having said all that, I think quality investing style can still make investors wealthier. The market’s cyclical and investing styles come in and out of fashion.

On this basis, Train’s Finsbury Growth & Income Trust (LSE:FGT) might be worth a look.

This FTSE 250 trust holds many quality UK shares that are currently unloved, including London Stock Exchange Group, Rightmove, Auto Trader, RELX, and Diageo.

These falling stars have held performance back. But they’re the sort of shares that could bounce back sharply if and when sentiment changes and there’s a rotation back into quality from value.

That said, many are data firms that are facing theoretical disruption threats from AI, so this adds an element of risk. The again, there’s a strong possibility that AI makes some software/platform businesses stronger due to their hard-to-replicate datasets.

Finsbury’s not one I’m going to buy, as I’m currently looking at other FTSE 250 investment trusts. But if quality comes back into fashion, this trust could recover strongly.

The post Can this unloved stock market style still make investors richer? appeared first on The Motley Fool UK.

As part of this milestone, the annual general meeting tomorrow (15 January) will include the trust’s first-ever continuation vote. This is a shareholder vote on whether the company should keep operating under its current strategy and structure. 

Might this be a good time for me to invest in this underperforming FTSE 250 stock in case it bounces back strongly? 

Disappointing five years

While this is a continuation vote, it can also be viewed as a referendum on manager Nick Train following five years of very disappointing underperformance. 

As we can see below, the £978m investment trust has languished since 2020 while the FTSE All-Share Index (the red line) has taken off.

Obviously, this is the complete opposite of what shareholders would have wanted.

If this week’s vote passes, the trust will continue under its current strategy. However, if it fails, Finsbury could be restructured with new management, merged with another trust, or even wound up to return cash to shareholders. 

What’s gone wrong?

The manager employs a ‘quality’ investing style, particularly focusing on what he considers durable brands or franchises.

Unlike many fund managers who hold 50-100 stocks to manage risk, Train runs an extremely concentrated portfolio, with the 10 largest holdings making up a whopping 86.7% of assets. 

When the selection is this concentrated, the stock picks need to be good. Unfortunately, this is where things have come unstuck. Key holdings Diageo and Burberry are down 55% and 41% respectively in just three years. 

To increase his exposure to technology, Train loaded up on stocks like London Stock Exchange, Rightmove, and Auto Trader. However, these three names (along with Sage Group) all fell by double digits in 2025, badly damaging performance.  

In 2024, Train admitted the trust “really should be able to do better than this and if we can’t, then I absolutely share shareholders’ growing impatience”. He said he was “frustrated” by the “malaise gripping the UK equity market”.

There was no malaise in 2025 though, with the FTSE 100 returning around 25% with dividends. Yet the trust managed to post negative returns, which will have left many shareholders questioning the strategy.

Should I invest?

Of course, I have no idea what will happen at tomorrow’s vote, but I doubt the trust will disappear. After all, Train’s performance record over 25 years is still impressive (roughly a 706% share price gain).

One thing I like is he’s apologetic about the underperformance, saying he’s run out of ways to say sorry to shareholders. In contrast, some other fund managers try to blame the market rather than their own stock selection.

Also, Train has significant skin in the game, having ploughed another £206,000 in earlier this month to take his stake to almost 5%. This shows he has faith in the turnaround prospects of the trust, which is trading at a 5.3% discount to net asset value.

It’s entirely possible Finsbury’s portfolio makes a roaring comeback in 2026 (I hope it does). Unfortunately though, I’m not confident enough to invest here due to the persistent underperformance.

Overall, I see better potential in other investment trusts right now.

The post After 100 years, is this FTSE 250 trust about to disappear? appeared first on The Motley Fool UK.

This mirrors the ‘meh’-like performance of Finsbury in recent times. It’s only up around 10% in five years and, disappointingly, was higher in August 2019 than it is today.

Between 2010 and 2020 though, the UK-focused trust easily beat the market, making investors richer along the way. Should I invest in the hope that manager Nick Train gets his mojo back? Let’s dig in.

Two sides

In the six months ended 31 March, Finsbury delivered a net asset value (NAV) per share total return of 2.1% and a 4.2% share price return. The benchmark, the FTSE All-Share Index, rose by 4.1% over the same period.

Therefore, while the share price basically matched the benchmark, the portfolio didn’t keep pace. This highlights how there can be a disparity between investment trusts’ underlying performance and their market valuation. The current discount to NAV is just under 8%.

Scratching his head, Train commented: “I look at FGT’s portfolio and I think — here is a collection of outstanding, predominantly global, companies, with obvious growth opportunities. Then I look at our NAV performance and wonder why it isn’t better.”

When I look at the portfolio, I see two sides. There’s the software/data part, which includes stocks like RELX, London Stock Exchange Group, Experian, Sage and Rightmove. I like this side, as AI should strengthen these businesses due to their valuable proprietary data.

Then there’s the other side dominated by consumer stocks like Diageo, Unilever, Burberry, and Rémy Cointreau. These have all struggled since the pandemic as high inflation and interest rates have ripped a hole in consumers’ pockets.

Here, I’m less certain a turnaround is imminent, as they rely on a recovery in consumer spending power. Unfortunately, UK inflation is on the rise again, and might spike in the US once tariffs work their way through the system.

Might these consumer stocks be stuck in a lost decade, much like FTSE 100 banks after the Financial Crisis? This is my concern, especially as Train is committed to buying more Diageo shares.

President Trump has promised to dramatically cut US taxes and that could benefit Diageo, whose largest market is America. But passing the bill, let alone achieving a booming US economy, isn’t guaranteed.

Finally — and perhaps symbolically — Finsbury also holds Manchester United shares. Like Train, the club used to be a serial winner, but performance in recent years has been disappointing, along with the share price.

Should I invest?

The dividend yield is just 2.2%, so this is more of a growth-focused trust. Around 60% of it is concentrated in just seven stocks. I like this high-conviction strategy because having hundreds of shares in an actively managed portfolio is pointless.

Then again, this approach risks a few duds dragging down performance. And Finsbury has held some stinkers — Diageo (down 45% in three years), Burberry (-52% in four years), and Rémy Cointreau (-56% over five years). These have negatively offset the software/data winners.

Weighing things up, I think a massive turnaround is unlikely. Yet while I won’t be investing, I’m still rooting for a return to form for Finsbury Growth & Income.

The post Is this former darling FTSE 250 trust set for a massive comeback? appeared first on The Motley Fool UK.

The Individual Savings Account (ISA) is a great way to target passive income after investors finish work. The Cash ISA and the Stocks and Shares ISA shield savers and investors from capital gains and dividend tax.

Over time, this can mount up to tens (or even hundreds) of thousands of pounds. With reinvestment and the power of compounding, these savings can significantly accelerate wealth growth to provide financial security in later life.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Here’s how prioritising investing in a Stocks and Shares ISA can create a handsome retirement fund.

The cost of security

Let me start by asserting the importance of the Cash ISA. Regardless of an investor’s goals, holding a certain amount of money in savings is generally a good idea to manage risk.

Unlike with stocks, where the value of my investment can fluctuate over time, my cash holdings remain 100% protected from volatility. But this security comes at a price. And over time, it can significantly impact chances of investing comfortably. Let me show you how.

Fancy a £419k portfolio?

According to insurance specialist Shepherds Friendly, the average Briton sets aside £421 each month for investments and non-investment savings. What would happen if someone parked the whole of this in the best-paying, easy-access Cash ISA on the market? That’s the 5%-paying product from Moneybox.

Over 25 years, that £421 would become £250,710. That’s not bad.

But there are two important caveats here. One is that it assumes interest rates will remain the same over that period. That’s a highly unlikely scenario. In fact, savings rates are collapsing as the Bank of England cuts interest rates.

The second is that this £250k is far lower than what someone could expect by also putting their money in a Stocks and Shares ISA.

Let’s say someone puts £100 in that Cash ISA each month, and the remaining £321 in a Stocks and Shares ISA. If they achieved a realistic average annual return of 9% on the latter, they’d have a total of £419,431 to retire on across both ISAs.

A top trust

Putting 75% of the leftover cash each month in riskier assets may not be for everyone. However, investing in a trust may be a more comfortable option to consider for cautious individuals.

Take the Finsbury Growth and Income Trust (LSE:FGT). Overseen by legendary investment manager Nick Train, this London-listed trust has holdings in 22 companies spanning multiple sectors.

These include consumer goods producers Unilever and Diageo, software developer Sage and financial services provider Hargreaves Lansdown. This approach helps to balance risk and reward, as well as provide a smooth return across all points of the economic cycle.

A large weighting of FTSE 100 shares also provides the trust with quality.

Its focus on UK equities means it carries more risk than more global funds. Yet since 2000, the Finsbury trust has delivered an average annual return north of 9%.

Past performance isn’t always a reliable guide to future profits. But trusts like this could be a great option for conservative and ambitious investors to consider.

The post Here’s how £421 in a Cash ISA and Stocks & Shares ISA each month could become £400k+! appeared first on The Motley Fool UK.

However, with the share price near 896p, it’s where it was about five years ago — how disappointing. The chart shows the stock’s been moving essentially sideways for half a decade. But better times may be coming for shareholders.

Even the trust’s well-known investment manager, Nick Train, thinks the performance has been rubbish. Train said in the recent annual report he’s been disappointed and recognises it’s been a frustrating period for shareholders.

Fantastic past performance

But under his management, the stock rose by more than 350% in the decade between 2009 and 2019. I think it can perform like that again. Meanwhile, stock market conditions today seem similar to those in 2009, just before it took off.

In 2009, the markets were licking wounds inflicted by the credit-crunch and financial crisis a couple of years earlier. One outcome of that was depressed company valuations in the UK.

Today, the markets are wounded because of the pandemic, war in Ukraine, energy price shocks and inflationary pressures. Again, the UK stock market has been depressed along with company valuations. But value looks like it’s been building up in many businesses as operational progress continues. Not exactly the same situation as in 2009, but it rhymes.

Meanwhile, Train runs the trust with a long-term perspective. The strategy is to hold the shares of quality businesses that can compound a growing stream of earnings over time.

Going forward, Train is “convinced” the best way to get the share price moving up again is by the same approach that generated good returns before. That means running a concentrated portfolio of shares backed by “exceptional” UK companies. 

The trust is unusual because it’s so concentrated — the opposite to being widely diversified. But it embraces the theory that exceptional results can come from doing things different from the crowd. 

There are 20 equity holdings in the portfolio. But the biggest six account for just over 73% of the invested money. So for a big fund, that’s super-concentrated.

Turnaround and growth potential

The top six holding are London Stock Exchange Group, Experian, RELX, Unilever, Diageo (LSE: DGE) and Sage. Of those, the share price of Diageo has been particularly depressed lately. But I reckon it has the potential to bounce back during 2025. 

The general economic challenges of the past few years affected Diageo’s premium alcoholic drinks business. The company posted declines in normalised earnings in 2021 and for the trading year to June 2024.

I reckon that weakness in the business unsettled the market. Previously, Diageo had carried a full-looking valuation for many years. That arose because of the steady, defensive and cash-generating qualities of the enterprise.

But the market has marked down the valuation and the share price over the past three years, as the chart shows.

However, City analysts expect improving earnings ahead. So Diageo could regain its popularity among investors and prove to be a decent hold for the trust going forward.

Positive outcomes aren’t guaranteed, but I reckon Finsbury Growth and Income Trust is well worth investors’ research time and consideration now.

The post I think this FTSE 250 stock may explode higher in 2025, just as it has done before appeared first on The Motley Fool UK.

We’ve just endured a difficult few years, but economies are firming up. Businesses and stocks are doing well in many cases and, to me, the general outlook looks positive.

Of course, that could all handbrake-turn if we get another pandemic, war, energy crisis, or any other unforeseen economic shock. But this may be as good as it gets for investing.

Stocks and shares, and their underlying businesses, come with risks, for sure. However, there’s also plenty of opportunity for the careful investor who’s prepared to roll up their sleeves and do a bit of research and investigative work.

Risk-first investing

So, I’d be keen to put my £5k to work in the stock market, and I’d start by opening an ISA because of the tax advantages of owing shares within one.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

But which shares should I choose?

The first principle I’d embrace is to invest risk-first. That means thinking about the risk of loss before the potential for gain.

One way of aiming to mitigate risk is by diversifying over several investments rather than bunging all the money in just one or two stocks.

Another safety device is to never size positions above the sleep-well-at-night level.

I found my level by jumping right in. My emotions and their effect on my body told me when my stock positions had become too large. I also spent a lot of time wandering around the house during the night!

To begin with, though, I’d choose to invest some of my £5K into a low-cost index tracker fund. In my own portfolio, there are trackers following the FTSE 100 index, the FTSE 250, and the American stock market.

A decent long-term performance

After that, I’d go for an investment trust, or two, or three. One I’m holding is Finsbury Growth and Income Trust (LSE: FGT), managed by the well-known, successful manager Nick Train.

I like it for long-term focused investing because its been underperforming for the past few years. However, over 10 years the stock has risen by about 70%, and over 20 years by around 380%.

My hope is the trust will splutter back to life and deliver decent gains ahead, although there are no guarantees.

One risk arises because Train uses a strategy of concentration into just a handful of underlying shares. At the end of March 2024, the top 10 holdings made up just over 85% of the fund.

However, the companies are quality compounders – businesses with strong market niches, potentially capable of compounding their earnings for years to come.

For example, the top five are London Stock Exchange Group, RELX, Experian, Sage, and Diageo.

They’re all quality stocks, yes, but the valuations are not cheap. Nevertheless, I’m hoping profit growth will help to move the share prices higher over time and lift my Finsbury Growth and Income Trust investment.

The investments mentioned here could deliver some good diversification across many underlying stocks. However, I’d also target the shares of carefully researched individual companies – perhaps when adding more money to my Stocks and Shares ISA.

The post £5,000 in savings? Here’s how I’d begin investing with a Stocks and Shares ISA right now appeared first on The Motley Fool UK.

Perhaps it’s better value now and can deliver decent returns going forward.

A concentrated portfolio

I drip-fed money into the stock over several months during the market’s recent bear-phase. My thinking was that well-known fund manager Nick Train’s investment prowess would likely deliver a satisfactory long-term return for me.

But since the market’s firmed up again, the share price can’t seem to get off the ground. It keeps trying, but then drops back. What’s going on?

One reason for the trust’s underperformance might be its narrow diversification. Around 58% of the portfolio is invested in just five names, and the top 10 positions account for 85% of the invested funds.

Concentration like that’s rare for funds and trusts. Most diversify across many stocks, but spreading widely across the market often leads to returns that are just like the market. If we want that, why not just invest in cheaper index tracker funds?

However, Train’s positions at least offer the potential for outperformance, as well as the potential for underperformance, as we are seeing now. But it’s the concentrated nature of the trust that attracted me in the first place.

Buying and holding quality businesses

Train’s strategy aims to target quality businesses with strong brands and powerful market franchises. Most are UK companies and Train tries to buy stocks when they’re priced below his estimate of the true worth of the business. Then he holds them for the long term, regardless of short-term volatility.

If that approach rings a bell, it’s probably because it sounds just like the way US billionaire investor Warren Buffett tells us he invests, and that’s deliberate.

The top holding in the trust is RELX, with almost 13% of invested funds. The firm provides information-based analytics and decision tools for professional and business customers. The stock had been rising until just recently when the share price slipped back a bit.

London Stock Exchange Group occupies the second slot with around 12% of the trust’s invested capital. It’s a similar story here. The global financial markets infrastructure and data provider saw its share price performing well for the past year until weakness very recently.

The third and fourth positions of Experian and Sage have also performed similarly. But one of the biggest detractors has been Diageo, which accounts for about 10.5% of the trust’s portfolio.

The premium branded alcoholic drinks supplier has been finding trading conditions tough in the current general economic environment. The share price chart tells the story:

Short-term challenges and stock-price weaknesses are normal events during a long-term holding strategy. However, there are no guarantees Finsbury Growth and Income Trust will perform well again in the future.

Nevertheless, on balance, I’d be inclined to dig in with further research and aim to add to my position in the stock now.

The post Is Finsbury Growth and Income Trust a good buy now? appeared first on The Motley Fool UK.

Here, I’ll take a look at three top-notch trusts that form the bedrock of my own portfolio.

Dividends and growth

First up we have BlackRock World Mining Trust (LSE: BRWM). As the name suggests, this firm invests in mining stocks around the globe. These include mega-miners like Rio Tinto and BHP, but also smaller players that could offer more rapid growth.

The stock currently carries a 6.9% dividend yield. Admittedly, that may be come under pressure in the near term following an economic slowdown in China, which consumes vast quantities of raw materials. That’s a risk here.

However, the main attraction is the future. As the world gears up for net zero, demand for raw materials is set to soar for many decades. 

The electrification of the global economy is going to require unbelievable amounts of copper. Nickel and lithium are vital for electric vehicle (EV) batteries, while wind turbines are predominantly made of steel (derived from iron ore).

The trust gives my portfolio broad-based exposure to this trend, offering handy income along the way.

There’s an ongoing charge of 1.06%.

High-quality UK stocks

Next up is Finsbury Growth & Income Trust (LSE: FGT). This is run by star manager Nick Train, with the portfolio mainly consisting of high-quality growth stocks listed in the UK.

There’s a thematic focus on the data revolution, with top holdings like RELX, London Stock Exchange Group and software firm Sage. To my mind, these are among the best FTSE 100 stocks around. And as I write, they’ve risen between 29% and 57% in 2023.

However, the trust’s shares have only risen around 1% in the same period. This is because it also contains some disappointing stocks, notably Burberry (down 27%) and Diageo (down 21%).

The drag on performance by these laggards is magnified due to the concentrated portfolio of just 23 stocks.

While it’s possible this disappointing performance could persist, I’m backing the trust to do well based on the quality of the portfolio.

There’s a 2.2% dividend yield and the ongoing charge is 0.6%.

Disruptive global growth

Finally, we have Scottish Mortgage Investment Trust (LSE: SMT), with the lowest ongoing charge of 0.34%.

The FTSE 100-listed firm states: “Our mission is to identify companies and entrepreneurs building the future of our economy. Companies set to change the world.”

So what might those be?

Well, there are those one might expect. These include Nvidia in artificial intelligence, Amazon in e-commerce and cloud computing, Tesla in EVs, solar energy, humanoid robots (and whatever Elon Musk targets next).

Then there are the next generation of potential big winners. Some of these include Joby Aviation (electric flying taxis), Northvolt (lithium-ion batteries) and Zipline (drone delivery).

One thing worth bearing in mind here is that the shares can be very volatile. However, the managers stress that shareholders should prepare for this. Progress is rarely linear.

As a result, the stock is suited to investors with a five-to-10-year (or longer) investing horizon. It’s only over such periods that companies potentially changing the world can start to have a major impact.

The post 3 world-class investment trusts to consider in 2024 appeared first on The Motley Fool UK.

The energy transition

The first one I would go for is BlackRock World Mining Trust (LSE: BRWM). As the name indicates, this trust holds stocks in the global mining sector (66, to be precise). It invests in diversified miners such as Vale, BHP, and Glencore.

Now, this area of the stock market displays above-average volatility when the global economic outlook softens, as it has recently. In particular, the Chinese economy, which consumes vast quantities of raw materials, has been showing signs of weakness.

The prices of copper and steel, two key commodities in the portfolio, have consequently struggled in 2023. And this has filtered through to the trust’s share price, which has dropped 15%, to 584p this year.

However, I think this dip could provide an excellent entry point and I’m considering topping up my own holding. That’s because certain metals are going to be key to a low-carbon future. That fact hasn’t changed since last year.

For example, a typical electric vehicle (EV) battery pack needs around 8 kg of lithium, 35 kg of nickel, 20 kg of manganese and 14 kg of cobalt. Meanwhile, charging stations and solar panels require lots of copper. Wind turbines are built with iron ore, copper, and aluminium. The list goes on.

In fact, according to the International Monetary Fund (IMF), replacing fossil fuels with low-carbon technologies would require an eightfold increase in renewable energy investments. This would unleash an unprecedented demand for metals in the coming decades.

Yet material supplies are forecast to remain constrained, which bodes well for miners’ profits and dividends.

Speaking of payouts, the trust has a tremendous long-term record of increasing dividends. And today, the stock offers a 6.84% dividend yield.

While there could be a dividend reduction looming, I do expect the payout (and share price) to trend higher over time.

Cherry-picking FTSE 100 stocks

When it comes to the FTSE 100, I prefer to hunt with a spear rather than a net. That is, I’m not interested in buying a passive index fund that tracks all 100 Footsie shares. I prefer to cherry-pick what I consider to be the best.

This is also the investing philosophy of Finsbury Growth & Income Trust (LSE: FGT), run by star manager Nick Train. He invests predominantly in UK-listed companies, with his largest five holdings in Footsie stocks (as of July).

Now, while the trust has delivered strong long-term returns, it did record a 5.8% fall in its net asset value last year. There’s always a risk that it could underperform again, especially given the concentrated nature of the portfolio (with only 22 stocks).

However, I highly rate RELX and LSEG. Both are extremely profitable and look poised to benefit handsomely from artificial intelligence (AI).

This is why I recently invested in the shares and plan to hold them for the next 10 years.

The post 2 top investment trusts for a beginner Stocks & Shares ISA appeared first on The Motley Fool UK.