September's 10 most-bought trusts

Money Observer Rated Fund Scottish Mortgage was the most bought investment trust during September, marking an eight-month reign at the top spot.

With a market capitalisation of £2.8 billion the trust is now the largest global generalist trust in the Association of Investment Companies (AIC) universe. It takes the title from Alliance Trust, which was the biggest global trust for over 10 years.

Scottish Mortgage has enjoyed an outstanding run of performance over the past three years. Since 30 September 2011 the trust has returned 98%, more than double the sector average and the best performance of any global trust.

Managed by James Anderson and Tom Slater, the trust is heavily focused on technology with its top 10 holdings including some of the world's best-known tech firms including Facebook, Google and Amazon as well as Chinese giants Tencent, Baidu and recently floated Alibaba (BABA).

Are things looking up for commodities?

The second most-bought fund was BlackRock World Mining, which like the rest of September's top 10 is also a Money Observer Rated Fund. Managed by commodity specialist Evy Hambro, the trust has returned to favour of late as the company has progressively raised its dividend.

The trust currently yields 4.7%, which has helped to put it on a share price premium to net asset value of 0.7% compared to an average 2.8% discount over the past 12 months.

This is despite a terrible few years for commodity markets that have seen the trust lose money every year since 2010. Cumulatively the trust has lost 21% in the three years to 30 September though just 1.69% over five years thanks to strong returns in 2009.

Commenting on investors' preference for BlackRock World Mining, Rebecca O'Keeffe, head of investment at Interactive Investor, says: "Commodity prices remain subdued, as Chinese growth continues to be a concern.

"However, investors are starting to look at the sector again, in the hope that raw materials will rally and that commodity prices will start rising again. The Blackrock World Mining Trust has suffered as a result of falling prices, but has still outperformed the sector and remains a popular option."

Templeton Emerging Markets also proved popular despite poor longer-term performance, ranking as the third most-bought trust during September. Managed by emerging markets veteran Dr. Mark Mobius, the trust has significantly underperformed both its sector and benchmark over three and five years.

In the three years to 30 September the trust returned 13% compared to 23% from the IT global emerging markets equities sector and 34% from the MSCI Emerging Markets index, while over five years it returned 26% compared to 37% and 36% from the sector and benchmark.

Healthcare

Down one place to fourth was the Biotech Growth Trust, a consistent top 10 constituent. Benefiting from the strong rally in healthcare stocks over the past few years, Biotech has delivered an impressive 225% over the three years to 30 September compared to 125% from the sector and a staggering 600% over 10 years compared to 300% from the latter.

Finsbury Growth and Income Trust, run by star manager Nick Train, fell from second most-bought trust in August to fifth in September following a disappointing nine months that have seen the trust lose 0.43% compared to no gain from the IT UK equity income sector.

Fellow UK specialist City of London Investment Trust climbed from ninth most-bought fund in August to sixth in September as the trust managed to eke out a 1.48% over the past nine months while global generalist Witan held on to seventh place for the second month.

Making its first appearance in the top 10 since June is Aberdeen Asian Smaller Companies, which was the eighth most-bought fund in September following a stellar period for Asia Pacific markets. Over the six months to 30 September, the trust has returned 23% compared to a sector average of 13%, making it the second best performing Asia Pacific investment trust in the AIC universe.

Falling from fourth most-bought trust in August to ninth in September was Temple Bar while F&C Global Smaller Companies fell from eighth to 10th.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.