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Best investment trusts: tips for mid-life investors and retirees from the experts

"For retirees I would look at investment trusts paying a decent income," one adviser said

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With investors young and old perusing the best funds and investment trusts ahead of the ISA deadline, The Association of Investment Companies has asked financial advisers and wealth managers to suggest investment companies for mid-life investors and retirees.

Investment companies offer strong long-term performance, income benefits and exposure to a wide range of assets, but with over 300 of them listed on the London Stock Exchange, it can be difficult to choose.

As well as this article for mid-life investors and retirees, there are also investment trust tips for millennial investors here.

Mid-life investors

Philippa Maffioli, senior adviser at Blyth-Richmond Investment Managers, said: “I recommend Invesco Perpetual UK Smaller Companies Investment Trust (LON:IPU) across my client base, but I am keen on it for those enjoying middle age as it aims to provide a long-term total return by investment in a broad cross-section of small to medium sized UK quoted companies. I like that it is actively managed and is not constrained by a benchmark. As my clients move towards retirement, the yield is attractive although I do recognise that dividends can be enhanced by making use of its ability to distribute capital profits.”

Paul Chilver, associate and financial planning manager at Birkett Long, said: “My first investment trust is one I have mentioned in the past, the BlackRock Greater Europe Investment Trust (LON:BRGE). It has an all-cap approach and appears to be well positioned for potential growth opportunities in European equities. My next suggestion is closer to home and hoping to take advantage of the potential upturn in UK equities which have been out of favour and seen as undervalued for some time. I am suggesting a trust focused on smaller companies, the River & Mercantile UK Micro Cap Investment Trust (LON:RMMC) which could be well positioned to take advantage of a more positive outlook for UK equities.”

Tomiko Evans, chief investment officer and managing director at Crossing Point Investment Management, said: “For a middle-aged client, we would suggest Monks Investment Trust (LON:MNKS) as a global fund for diversification with a moderate amount of volatility and fantastic medium to long-term returns.”

Saftar Sarwar, managing director and chief investment officer at Binary Capital Investment Management, said: “The Scottish Mortgage Investment Trust (LON:SMT) provides genuine active exposure to high-growth public and private companies at a low cost. The managers take a bottom-up, stock picking approach with a high conviction style. It is a trust with a focus on the US and China around technology, healthcare and disruptive investments. Scottish Mortgage is a trust for investors who want to capture future growth opportunities and real innovation – and who want to take a ten-to-fifteen-year view on investing.”

Investment trusts for retirees

Saftar Sarwar at Binary Capital Investment Management, said: “The Ruffer Investment Company (LON:RICA) is interesting for someone who is looking for steady capital growth without too much volatility. It is a capital preservation trust that should generate positive returns in most markets. The trust can invest in bonds, equities and other strategies to mitigate potential market falls and even has an allocation to gold.”

Philippa Maffioli at Blyth-Richmond Investment Managers, said: “I recommend Civitas Social Housing REIT (LON:CSHbecause it provides both an excellent yield and it is wonderful for diversification. I like it because it comprises a large diversified portfolio of built, principally freehold social homes within the regulated social housing sector across the UK. It benefits retirees because of the stable income from the receipt of rents with the potential for capital uplift. It is attractive because long-term lease agreements are signed only with housing associations and local authorities (‘Registered Providers’). Finally, the most important feature is the company’s overriding philosophy: promoting tenants’ wellbeing, enhancing housing quality and delivering an increase in the stock of regulated social housing.”

Tomiko Evans at Crossing Point Investment Management said: “For a retiree, we would consider Mid Wynd International Investment Trust (LON:MWYas it is a global fund for diversification, has had a relatively low amount of volatility and still provides income and continued growth.”

Paul Chilver at Birkett Long, said: “Here I would look at investment trusts paying a decent income. Firstly a ‘steady Eddie’ type investment trust which is the Dunedin Income Growth Investment Trust (LON:DIG), currently yielding just over 4% and which has recently performed consistently. My second suggestion is moving away from UK large caps and therefore blends well with the Dunedin Income Growth Investment Trust: the Montanaro UK Smaller Companies Investment Trust (LON:MTU) which is currently yielding just over 3.5%. This has been managed for quite some time by Charles Montanaro.”

Quick facts: Monks Investment Trust

Price: 1386 GBX

Market: AIM
Market Cap: £3.26 billion

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