By Annabel Brodie-Smith
Spring has sprung! The sun is shining, and the daffodils are coming out. I spent St David’s Day (clearly an important day for a Welsh woman) with my husband in the Ardennes in Belgium at a friend’s birthday party. It was a whistlestop trip – we drove over a long weekend – but the food was delicious, there was lots of dancing and it was a refreshing change of scene.
“Spring has sprung! The sun is shining, and the daffodils are coming out.”
The latest from the investment trust industry is that all seven of the investment trust votes have taken place and shareholders have decisively rejected Saba’s proposals. Thank you so much to everyone who voted. It’s a testament to how much they value their investment trust.
In mid-February Saba came back with ‘Plan B’ to requisition another four meetings and to convert these trusts into open-ended funds with the same manager and mandate. However, three of these requisitions have now been withdrawn and the fourth has been declared invalid. We are waiting to see what happens next…
What’s clear is that our investors value the advantages of the investment trust structure over the long term. And those advantages are very clear from our annual research which shows there are 50 investment trusts that would have made you an ISA millionaire if you had invested the full ISA allowance every year from 1999 to 2024, a total of £326,560. There’s one investment trust that would have made nearly £3 million – Allianz Technology Trust – and HgCapital Trust, Polar Capital Technology and Scottish Mortgage would have all made you more than two million pounds.
Although the top trusts are tech focused, there’s a wide range of sectors featured in the top 50. It’s interesting to see this research but I want to emphasise that it’s vital to spread your risk when investing. Don’t put all your eggs in one basket – a diversified portfolio of investment trusts and other assets which meet your needs is the best way to succeed over the long term.
This brings us to a captivating conundrum for Ian Cowie to consider – which is better individual savings accounts (ISAs) or self-invested personal pensions (SIPPs)? Ian thinks SIPPs are particularly important for younger people, provided they don’t need their money back quickly, but older people “such as your humble correspondent, skidding sideways into my seventh decade – may gain more immediately from ISAs’ ability to generate tax-free gains and income, whenever they are required.” Read Ian’s explanation of his SIPP choices, Polar Capital Technology, Worldwide Healthcare, JPMorgan Indian, his choices for his grandchildren Alliance Witan and F&C and his own ISA choices, Greencoat UK Wind and Tufton Assets.
Another tax-efficient investment, venture capital trusts (VCTs) are currently celebrating their 30th birthday. VCTs are a British success story, uniting capital from private investors with the expertise to find and develop cutting-edge businesses. These are high risk investments so there are generous tax breaks including 30% up-front tax relief if you hold the shares for five years and tax-free dividends. Last week I talked to James Hendry who manages the Baronsmead VCTs, Peter Dines who manages the Northern VCTs and Robert Whitby-Smith who manages the Albion VCTs. We discuss how VCTs have been investing for 30 years, where they are currently finding exciting opportunities and the economic and social benefits of VCTs.
Finally, we have included an article to help you find out how to keep abreast of what’s going on including meetings and key votes at your investment trust. Did you know you can set up email alerts on your trust and find out about upcoming meetings and presentations?
We are keen to hear your views on how you use the AIC website. Please do let us know if there’s anything you’d like to be able to do on the website that you aren’t sure how to achieve. Do you want some extra clarity on investment trust data, or maybe you’d like some help making the most of our research tools?
I’d like to wish you all a good month. Let’s hope springs stays with us!
Kind regards
Annabel Brodie-SmithCommunications Director, AIC
