10 investment trusts for your Isa 2020
Dave Baxter, Investors Chronicle, 6 March 2020
Features such as the use of gearing – debt – and the ability to pay income from capital reserves give trusts advantages that could give your Isa an edge. They are also, arguably, better suited to investing in illiquid assets such as property and private equity so could be a good way to diversify your Isa. Below are 10 suggestions for investors seeking growth, income and wealth preservation, plus a contrarian pick and something a bit different.
INCOME
Henderson Diversified Income Trust (HDIV)
James Carthew, head of investment company research at QuotedData, says: “Henderson Diversified Income offers investors a 4.6 per cent yield from a portfolio currently dominated by high-yield and investment-grade corporate bonds, but which has the flexibility to invest across a wide variety of debt. High yield may sound risky, but many investors forget that when companies run into trouble it’s equity investors that get hit first. Their money serves as a protective cushion for debt investors.
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WEALTH PRESERVATION
Capital Gearing Trust (CGT)
Mr Carthew says: “Capital Gearing Trust [is] the best performing trust since Peter Spiller took on responsibility for it in April 1982 and, over more than a decade, the one that best preserves capital when markets are falling. Its managers think that the returns available from most asset classes are currently poor. They are concerned about the level of debt that has built up in the global economy. They also think that inflation may eventually creep back into the system as governments and central banks, fearful of another financial crisis, throw money at staving off a recession – something the Chinese are doing [following the coronavirus outbreak].
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