This is a great advantage at a time when many other businesses are having to cut dividends to conserve cash. 

Furthermore, investment trusts have more options when it comes to selecting investment assets. They can own stocks, bonds, real estate, precious metals, cash, and many other different asset classes.

Investment trusts to buy

Personal Assets Trust (LSE: PNL) is an excellent example of the diversity of investment trusts. This firm was set up with the single goal of protecting and growing private investors’ capital over the long term. And management appears to be meeting this goal.

The trust, which currently supports a dividend yield of 1.3%, has lost around 4.7% this year. However, the FTSE All-Share has lost around 30% over the same time frame. 

Personal Assets’ portfolio is stuffed full of defensive assets. The most significant position in the portfolio right now is gold. It makes up 9% of assets under management. Cash makes up 5%, and fixed-income securities make up around half of the portfolio.

Are you looking for an investment trust to add to your Stocks and Shares ISA in this market crash? I think it might be worth taking a closer look.

Henderson International Income Trust

With that dividend yield of just 1.3%, Personal Assets doesn’t offer much in the way of income. So investment trusts with an income focus could be the better option for income-seeking investors. Especially those with a long-term time horizon. I think Henderson International Income Trust (LSE: HINT) is a great option here.

With a current dividend yield of 5%, Henderson’s income offering looks attractive in the current interest rate environment. It’s now dealing at a slight discount to net asset value. But historically, the trust has commanded a premium to net asset value.

Some of the most attractive income stocks in the world feature in the portfolio. These include Microsoft and consumer goods giant Nestle. International equities make up almost all of the portfolio. 

Put simply, if you’re looking to buy a diversified international income stream, this could be one of the best investment trusts out there.

Henderson Smaller Companies Investment Trust

For investors looking for exposure to fastest-growing small businesses, Henderson Smaller Companies (LSE: HSL) has an excellent track record of picking winning stocks.

Investing in small growth companies is a risky business. Therefore, gaining exposure to the sector through investment trusts is a great way to reduce risk while profiting from company growth at the same time.

Henderson has 105 different holdings in its portfolio. It charges an annual management fee of just 1.42%. On top of this, the trust supports a dividend yield of 2.6%. The distribution has risen every year since 2000. That’s nearly 20 years of consecutive dividend increases.

Today, investors can buy this trust at a discount of 5% to net asset value. If you’re looking for a way to invest in small-cap growth businesses, without having to pay a hefty fee, Henderson’s offering appears to tick all the boxes.

The post Three investment trusts I’d buy for my ISA in this market crash appeared first on The Motley Fool UK.

This is a challenging environment for investors to navigate. However, there are a couple of funds that stand out right now as safe harbours in rough waters.

Personal Assets Trust

The Personal Assets Trust (LSE: PNL) is a relatively unique investment trust. Its goal is to protect and grow the wealth of its investors over the long term. Management places emphasis on the protection part of its investment mandate.

As such, inflation-linked bonds and precious metals feature heavily in the trust’s portfolio. Commodities and fixed income securities currently make up more than two-thirds of the collection. The trust also owns a selection of high-quality blue-chip stocks.

If you’re looking for an investment fund that’s trying to beat the stock market, Personal Assets isn’t for you. However, if you’re looking to protect and grow your wealth, it could be worth considering.

Over the past 10 years, it’s achieved an average annualised return of 5.8%, with relatively minimal volatility.

A dividend yield of 1.3% provides a level of income that exceeds most savings accounts, and an annual management fee of 0.65% is relatively low.

Scottish Investment Trust

The Scottish Investment Trust (LSE: SCIN) is another trust that’s structured to outperform in all market environments, billing itself as a contrarian investor. It likes to buy out-of-favour stocks, which are in the process of restructuring. It also aims to provide dividend growth ahead of UK inflation.

Research shows value stocks tend to outperform in volatile markets. Meanwhile, growth stocks suffer the most as investors usually rush to sell these holdings first. This suggests Scottish could produce market-beating returns in the current environment.

Indeed, the most substantial holdings in the trust’s portfolio as some of the most defensive stocks around. These include Tesco, gold miner Newcrest and GlaxoSmithKline.

Management has also shown willingness to deploy extra capital repurchasing shares when they’re trading a significant discount to net at a value, which enhances returns over time.

The investment trust currently supports a dividend yield of 3.1%, is trading at an 11% discount to net asset value, and charges just 0.58% per annum in management fees.

Henderson International Income Trust

The great thing about dividend stocks is that they can give you a steady income in times of market volatility. That’s why the Henderson International Income Trust (LSE: HINT) has to feature on a list of top investment trusts to buy in the current environment.

It owns some of the most highly-regarded income stocks in the world, including Microsoft, Coca-Cola and Nestle. It currently offers a dividend yield of 3.7% and is trading at a slight discount to the net asset value.

Since the trust was launched in 2011, its net asset value as grown by nearly 90%, including dividends.

That suggests this trust can provide a steady return for investors in all marketing environments. With an annual management fee of 0.84%, it doesn’t charge the world for this performance either.

For long-term dividend-focused investors, this trust seems to tick all the boxes.

The post 3 investment trusts I’d buy in the current market crash appeared first on The Motley Fool UK.

These minuscule interest rates are outrageous. Indeed, the current rate of inflation is 1.7%, which implies that for the most part, these Cash ISAs offer negative real interest rates (after adjusting for inflation).

Time to dump the Cash ISA

It’s for that reason that I’d avoid Cash ISAs all together and open a Stocks and Shares ISA instead. The good thing about the latter is you can invest your money wherever you want around the world. There’s also a virtually unlimited selection of assets you can choose to own. From infrastructure funds to corporate bond funds, single stocks and global equity indices, there are thousands of assets you can pick to buy.

The flexibility of Stocks and Shares ISA also means you don’t have to make do with whatever low rate of interest Cash ISA providers are offering. Instead, the world is your oyster.

Dividend stocks

Dividend stocks are a particularly attractive alternative. For example, Royal Dutch Shell is one of the largest and most trusted dividend stocks in the world. The company has maintained its payout since the end of the Second World War through thick and thin.

Today, this stock supports a dividend yield of 6.2%, three times more than even the most attractive Cash ISA on the market right now.

There are plenty of other FTSE 100 dividend stocks that offer inflation-beating yields as well and the index itself currently yields 4.5%. The great thing about buying the whole index is that you don’t have to worry about the performance of individual stocks. All you need to do is sit back and watch the money roll in.

Another plus point about Stocks and Shares ISAs is that you can invest outside the UK. So, if you’re worried about the impact a no-deal Brexit might have on the UK economy, it’s easy to diversify at the click of a button.

The Henderson International Income Trust is my favourite pick for international income. Nearly a third of the trust’s assets are currently invested in US stocks, with another third invested in European equities. The trust’s yield stands at 3.2%.

The bottom line

So, that’s why I would dump the Cash ISA today and move my money into a Stocks and Shares ISA. These tax wrappers provide much more flexibility and the potential for better profits over the long run.

Investing might seem like a lot of extra effort compared to leaving your money in cash, but as I’ve tried to show in the numbers above these investments should pay for themselves over the long term.

The post Forget the Cash ISA! I’d open a Stocks and Shares ISA right now appeared first on The Motley Fool UK.

Desperately seeking Alpha

Investment trust Apax Global Alpha Ltd (LSE: APAX) is one of the highest yielding funds I have seen, currently paying 5.65% a year, according to Trustnet.com. Launched in June 2015, it invests in a portfolio of funds run by Apax Partners, with 59% in private equity and 41% in derived investments.

The £729m trust has just published its quarterly results to 30 September which show adjusted NAV dipping by €26.2m to €881.9. However, this was primarily down to the generous semi-annual dividend of €23m paid in the quarter and negative FX effects of €20.5m. The portfolio delivered a total net asset value (NAV) return of 2% on a constant currency basis. 

Apax predator

Apax Global Alpha offers a broad global spread as it is 48% invested in the US, 31% in Europe, 10% in India, 4% in the UK and 2% in China. Trustnet shows a return of 8.3% in the last year, against 18.2% for the private equity postmark sector, so it is definitely lagging.  It trades at a discount of 9.67%, which might suggest it is a bargain, or maybe that investors reckon performance could be better. Income of getting on towards 6% is not to be scorned though, especially as you near retirement.

Henderson presents

I am more excited by Henderson International Income Trust (LSE: HINT), recently highly commended in the Money Observer investment trust awards 2017. Launched in 2011, this global trust could balance your UK equity income holdings quite nicely because it excludes this country to focus on three regions: North America, Europe, and the Far East, none of which can account for more than half of its investments.

Big names abound in its portfolio, with Microsoft, Novartis, Roche and Coca-Cola featuring in the top 10. It cannot invest more than 5% in any single company. The trust aims to be a core savings product and manager Ben Lofthouse’s performance has been good, with Trustnet showing growth of 58% over the past three years, against 50% across the global equity income sector, and 85% over five years, slightly trailing its sector return of 90%.

Premium trust

This week’s annual results to 31 August showed the trust achieving double-digit total returns, with NAV per ordinary share up 18.8% and the ordinary share price jumping 19.3%. This compares to a total return of 19.1% for the MSCI World (ex UK) Index. Management lifted the dividend 5.4% from 4.65p to 4.90p a share, giving a current yield of 3%. 

Henderson International Income trades at a narrow discount of just 1.28%, with the board happy to see it reverting to trading at a premium and stating that it will implement share issues or buy-backs to keep it roughly in line with its peer group. The yield is a little below its sector average, but NAV total returns are well above. You could quite happily buy and hold this fund for the next 25 years.

The post These 2 global dividend investment trusts could help you retire early appeared first on The Motley Fool UK.