Looking back over the past five years is enough to show this. The FTSE 250 fell further than the FTSE 100 during the pandemic crash.

Then it climbed way higher in those 2021 days of premature optimism. And now we’re suffering high inflation and interest rates, it’s underperforming once again.

Bull market

I don’t know when the next bull market will come, but I’m convinced we’ll get one. And I reckon a FTSE 250 investment could give me the edge when it does.

But there are so many different stocks to choose from — I mean, there are around 250 or so.

So I have a couple of investment trusts on my list of smaller-cap favourites. And, right now, I like the look of Henderson Smaller Companies Investment Trust (LSE: HSL).

It’s on a forecast dividend yield of only a modest 3.6% at the moment. But it’s raised its dividend every year for 20 years in a row now.

FTSE 250 holdings

What most attracts me is that this trust invests in some individual FTSE 250 stocks that are themselves on my smaller-cap shortlist.

It holds housebuilder Bellway, for example. And specialist mortgage lender OSB Group is there too. Their business might be related, but I’d rate builders and financial stocks among my best buys now.

Tech systems developer Oxford Instuments is in the mix too. Overall, there’s a nice bit of diversification across income and growth stocks from a range of sectors.

Real Estate

My second pick is Primary Health Properties (LSE: PHP). This time it’s a real estate investment trust (REIT). But its income is more geared towards the health business, and forecasts indicate a 7.3% dividend yield.

Primary Health owns and leases GP surgeries and health centres in the UK and Ireland.

The share price has been falling in 2023, presumably due to real estate weakness. But I’m seeing no weakening in demand for health services. Property market troubles might bring some risk, mind.

There could be political risk too, centred on using the private sector for NHS business. But I think we’re way too far down that track to turn back now.

There’s also a fair bit of debt here, though that’s not uncommon in a real estate business.

Smaller-cap risk

What I’ve chosen here has more exposure to interest rates than most. And one alternative might be to buy a FTSE 250 tracker instead. That would diversify away the risk a bit further. But where’s the stock-picking fun in that?

I think the bigger risk here, especially with diversified investment trusts, is future stock market weakness. Should the economy not start to pick up soon, FTSE 250 stocks could head into a longer downturn.

But a bull market will come sooner or later. Won’t it?

The post 2 superb FTSE 250 stocks to consider before the next bull market! appeared first on The Motley Fool UK.

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.

If you’re new to the world of investment trusts, then you might want to start out by taking a look at these low cost funds.

Global diversification

If I were going to pick just one fund to invest in, I would probably go with the Scottish Mortgage Investment Trust (LSE: SMT).

Launched in 1909, Scottish Mortgage is considered to be Baillie Gifford’s flagship investment trust. The fund invests in both developed and emerging economies, giving investors global diversification and the chance to participate in faster-growing markets.

Although investing in foreign stocks provides the possibility of greater long-term returns, it also carries exchange rate risks. As the pound strengthens or weakens against other currencies, your returns may fall or rise. The biggest exposure is to the dollar as the US is the top country exposure in the portfolio, with 47% of its total assets. Other sizeable exposure is to China with 19%, followed by Germany, Spain and Sweden. The UK currently represents less than 4% of its assets.

The managers of the trust aim to achieve a greater return than the FTSE AllWorld Index in sterling terms over a five-year rolling period. It has, so far, done an excellent job, having delivered total returns of 227% over the past five years, against the index’s comparable performance of 104%. Moreover, fees are low with an AIC annual ongoing charges ratio of 0.44%.

UK focus

The Independent Investment Trust (LSE: IIT) is an alternative pick for investors looking for more UK exposure. It benefits from very low costs, with an AIC annual ongoing charges ratio of just 0.34%.

Over the five years, the trust has delivered NAV total returns of 163%, which compares favourably to its fund peer group’s average return of 112%. The surge in shares of premium mixer drinks company Fevertree Drinks has no doubt played a big role in the fund’s performance, as the stock is its single biggest position, representing 12.5% of total assets.

Independent Investment Trust also has a great deal of exposure to the housebuilding sector, with big positions in Redrow (7.5%) and Crest Nicholson (6.4%). Along with smaller positions in Berkeley Group, McCarthy and Stone and Persimmon, its total exposure to the housebuilding stocks added up to 22.8% as of 31 May.

Smaller companies

For investors looking to gain exposure to smaller companies, an investment trust such as Henderson Smaller Companies (LSE: HSL) may offer an easier way in for those who might not have the time or experience to research small-cap stocks.

Henderson Smaller Companies is one of the top-performing UK small-cap funds. It has outperformed the Morningstar Investment Trusts UK Smaller Companies benchmark over the past five years, with an NAV total return of 63.6%, against the benchmark performance of 52.3%. What’s more, with shares in the trust trading at a substantial discount to its NAV of 15.5%, investors can effectively purchase its assets for less than the sum of its parts.

Last year, the fund had an AIC annual ongoing charges ratio of 0.44%.

The post 3 top-performing investment trusts with low fees appeared first on The Motley Fool UK.