April's 10 most-bought investment trusts

UK equity income remained one of the most popular investment trust sectors in April, with four out of the ten most-bought funds on Interactive Investor residing there, while commodities and emerging markets are also rising in favour.

New data shows that investors shifted their focus back to high-yielding trusts in April, following a slight dip in March when they moved towards global funds.

The most popular fund from the UK equity income sector was Money Observer rated fund Temple Bar Investment Trust, which is currently yielding 3.1% and trading on a premium of 1.9%.

Despite this, data from Financial Express (FE) shows that the fund has fallen slightly behind in total return terms, underperforming the sector over one and three years, perhaps explaining its fall from third most-bought fund in March to sixth place overall in April.

The other most-bought UK income funds included City of London in seventh place, followed by star manager Nick Train's Finsbury Growth and Income Trust - which dropped from fifth place in March to ninth in April - and newcomer Acorn Income in tenth place.

Both Finsbury Growth and Income and Acorn Income are also Money Observer Rated Funds.

Commodities and emerging markets

Investors also showed a renewed interest in out-of-favour commodities and emerging markets: BlackRock World Mining climbed from tenth place in March to fourth place in April, while Templeton Emerging Markets ascended to third place from seventh.

BlackRock World Mining has returned double that of its sector, IT Commodities and Natural Resources, over ten years; however, the downturn in commodity stocks means it has lost 35% over three years (although this is still less than the sector average).

As such, it is currently on a share price discount of 3.1% to net asset value (NAV), a factor investors may be capitalising on as sentiment on commodities begins to turn positive. The fund also yields an attractive 4.9%.

Similarly, Mark Mobius' Templeton Emerging Markets Trust has suffered from a negative shift in sentiment on developing economies, which has led to a loss of nearly 15% over three years and sent its share price discount plummeting to 9%.

This led to it being dropped from Money Observer's model portfolio range in favour of JP Morgan's Global Emerging Markets Investment Trust; however it remains a Money Observer Rated Fund as does BlackRock World Mining.

Global favourites

Overall, Baillie Gifford's Scottish Mortgage remained Interactive Investor's most-bought fund for the third month in a row.

Scottish Mortgage has delivered top quartile returns over one, three, five and ten years, but performance has suffered of late as technology stocks have sold off, explains head of investments at Interactive Investor Rebecca O'Keefe.

"Scottish Mortgage remains a highly popular option for investors given its good performance record, but the trust remains highly exposed towards technology stocks, so it has suffered in the short term.

"Some of the best-performing funds in the past five years have been high-risk, and the big test for these fund managers is whether they will continue to perform if technology falls even further out of favour," she says.

Fellow global trust Witan continued its ascendency through the rankings as the fifth most-bought investment trust in April. It has risen from ninth place in March, when it made its first appearance in the top ten since 2013.

Witan's popularity is testament to its strong performance over the past 18 months, during which time it has returned 36.3% compared to 17.2% from the IT global sector. The fund is also on a 2% discount to NAV, with a yield of 2.2%.

Both Scottish Mortgage and Witan are Money Observer Rated Funds.

Sector calls

The second most-bought fund on Interactive Investor, behind Scottish Mortgage, was Frostrow Capital's Biotech Growth Trust, which has become increasingly popular amongst investors due to the strong performance of biotechnology and healthcare stocks in recent years.

According to FE, Biotech Growth is top of its sector over one, three, five and ten years, returning nearly 400% since 2004. However, like technology, the healthcare sector has suffered from a spate of profit-taking of late and the fund has lost nearly 14% over the past three months.

In the UK smaller companies space Henderson Smaller Companies fell out of the top ten despite a period of very strong performance that has seen it return 90% over three years. Instead, investors favoured F&C Global Smaller Companies, suggesting potential profit-taking in UK smaller companies, which have performed particularly well over the past two years.

In total, eight out of the ten most-bought funds on Interactive Investor in April were Money Observer Rated Funds with only City of London and Biotech Growth not featuring.