Morningstar held a well-received webinar yesterday on Investment Trusts. Titled “Investment Trusts: Back in Vogue”, the session was hosted by Jackie Beard, Morningstar’s Director of Investment Trust Research, and myself, Tom Treanor, Investment Trust Specialist . Investment Trusts have been largely passed over by non-institutional investors in favour of open-ended funds, but they have a number of advantages that we believe make them an attractive addition to any investor’s portfolio.
With the first Investment Trust, Foreign & Colonial, launching way back in 1868 and still going strong today, they’ve certainly proved they have staying power.
We believe a few key trends are set to prompt a renaissance in retail ownership of these vehicles: the advent of the Retail Distribution Review will require advisers to take a “whole-of-market” approach, while the search for sustainable and diversified sources of yield in the face of historic low interest rates and well-publicised suspensions of dividends should also see a resurgence in interest in the closed-end structure. This not only offers unique benefits for those seeking yield but is also ideal for those who wish to diversify their portfolio through access to alternative asset classes such as private equity, property, hedge funds, or even forestry.
In the webinar, we took a closer look at these issues and discussed why we think these vehicles deserve a place in portfolios. We also covered a case study example of how to assess closed-ended funds and looked at some of the similarities and differences with their open-ended counterparts. The feedback from the audience was very positive, with several interesting questions posed: do we think the trend in new fund issuance is likely to continue?; how do we see investment trusts fitting into existing client portfolios? To hear the answers and view the webinar, please click here. If you’re not already registered with BrightTalk, you’ll need to do so but this is free and only needs to be completed once.