February's 10 most-bought trusts

Money Observer Rated Fund Scottish Mortgage was the bestselling investment trust on Interactive Investor in February for the 13th consecutive month as the trust continues its run of strong performance.

Managed by James Anderson and Tom Slater, Scottish Mortgage has delivered the best share price returns of any trust in the Association of Investment Companies' (AIC's) global sector over 10 years (350%), three years (92.3%) and one year (25.4%).

In recent years the trust has been buoyed by its exposure to fast-growing global technology companies including internet giants NASDAQ:FB:Facebook, Google, Amazon and Tencent (TCEHY) alongside its top holding, biotechnology leader Illumina.

Staggering gains

Fellow Money Observer Rated Fund Biotech Growth was the second most-bought trust in February, again following a strong few years for the trust.

Managed for Frostrow Capital by US-based biotechnology experts Orbimed Capital, Biotech Growth has delivered a staggering 725% over the past 10 years with the majority of the performance generated since 2009 when the biotechnology sector began to regain favour with investors.

Finsbury Growth and Income - another Money Observer Rated Fund - was the third most-bought trust for the second consecutive month in February. The trust is one of four UK equity income funds to make it into the top 10 last month as trust investors continue to favour the asset class.

Finsbury Growth and Income has been under the care of star manager Nick Train since 2000, during which time Train's high conviction, brand-led investment style has proved successful. In the 10 years to 16 March the trust has returned 219% in share price gains compared to 98% from the AIC's global sector.

Over one year Train has returned an arguably more impressive 17.7% in share price terms and 18.4% in net asset value (NAV) growth as a number of UK-focused funds and trusts have struggled in a flat UK equity market.

Fellow UK equity income constituent City of London Investment Trust was the fourth most-bought fund in February, rising from seventh most bought in January. Also a Money Observer Rated Fund, City of London has had a disappointing few years, delivering third-quartile returns in two of the last three years.

However some good performance between November 2014 and February this year has helped to propel City of London into the first quartile over one year to 16 March, during which time it has delivered 9.8% compared to just 4.3% from the sector. Its high 3.8% dividend yield also makes it perennially attractive to income seekers.

Impressive dividend yield

BlackRock World Mining was the fifth most-bought trust in February for the second month in a row despite a continued rout within commodities that has contributed to the trust's heavy losses. In the year to 16 March the trust has shed 36% in share price terms and 30% of its net asset value.

Weak commodity prices combined with write-offs within the trust's portfolio have contributed to the losses, including a $100 million (£67.61 million) investment in a mine in Sierra Leone that failed. This has helped to push the trust's share price to NAV discount to 14%, which investors may be taking advantage of to access the trust's impressive 7% dividend yield.

Money Observer Rated Fund Witan Investment Trust was the sixth most-bought trust in February as manager Andrew Bell continues to turn the fortunes of the once ailing global generalist trust around through an outsourced multi-manager mandate.

Fellow Money Observer Rated Fund Jupiter European Opportunities rose from 10th most-bought fund in January to seventh in February as highly rated manager Alex Darwall bounces back from a disappointing 2013/2014 to deliver a first quartile 16.7% in share price gains in the year to 16 March.

Bankers Investment Trust - another Money Observer Rated Fund - was the eighth most-bought trust last month, falling from sixth most bought in January.

Established in 1888, Bankers is a strong long-term performer, however it has slightly underperformed over the past year, delivering 10% in share price gains compared to 14% from the global sector. This has helped to push the trust's discount out to 6.43%, double its 12-month average of 3%.

UK equity income trust Temple Bar fell one place from eighth most-bought trust in January to ninth in February. The Money Observer Rated Fund has had a disappointing year, shedding 4.2% in share price terms compared to the sector's 4.3% gain.

This has pushed Temple Bar's discount out to 6.4% - well below an average 0.3% premium over the past 12 months. This, combined with its 3.4% dividend yield, may be enticing value-oriented income investors into the trust.

Star manager Neil Woodford's ex-charge Edinburgh Investment Trust, now managed by his protégé Mark Barnett, re-entered the most-bought list at number 10 after a one-month absence.

This follows a strong year for the trust, during which it has delivered the third highest share price gains in the UK equity income sector despite the switch in management.

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.