December's 10 most-bought trusts

Global equity investment trust Scottish Mortgage was the most bought trust on the Interactive Investor platform in December, reigning largely uninterrupted over the top spot for close to two years.

The trust, also one of our sister magazine Money Observer's Rated Funds, has been unseated only once since February 2014. This was in April this year, when it was knocked off by Woodford Patient Capital during the latter's record-breaking launch onto the UK stockmarket, with £800 million of assets under management.

Since then Woodford Patient Capital has tended to be the second most-bought trust among Interactive Investor clients, and this remained the case in December.

Underperformance

Despite the continuing popularity of its celebrity manager Neil Woodford, however, the trust has underperformed since launch, shedding close to 12% in share price terms and 4% of its net asset value (NAV) over six months to 24 December.

Subsequently, its share price to NAV premium has narrowed from a high of 15.1% in August to just 1.8% on 24 December. The trust's underperformance is due mainly to its large exposure to biotechnology companies, which have suffered a volatile period.

Woodford's significant stake in beleaguered US firm Northwest Biotherapeutics has weighed particularly on the portfolio as allegations of poor governance and financial impropriety have seen the company's share price plummet nearly 40% over one year.

Rising one place from November is another Money Observer Rated Fund, Finsbury Growth and Income, which was the third most-bought trust in December.

Managed by star manager Nick Train since 2000, the trust is the most successful of those in the Association of Investment Companies' (AIC's) UK equity income sector over five and 10 years in share price terms, returning 108% and 189% respectively.

The Biotech Growth trust was the fourth most-bought trust in December, falling one place from November as the trust continues to suffer from sell-offs in the sector.

While it is still the best share price performer in its sector over five and 10 years, it has been overtaken by the International Biotechnology Trust and Money Observer Rated Fund Worldwide Healthcare over one year.

Money Observer Rated Fund Witan held onto its place as fifth most-bought trust in December. This is despite the global equity stalwart falling behind the sector over one year with a share price return of 3.6% compared to an average of 6.3% from the average global trust.

Income focus

BlackRock World Mining also held onto its place as sixth most-bought trust in December despite steep losses caused by persistent declines in the global commodity prices.

The trust has now made a loss in both share price and NAV terms over most time periods to 24 December; however at a discount of 16.8% and boasting an 11.5% yield it is evidently proving attractive to contrarian and income seeking investors.

Neil Woodford's former charge The Edinburgh Investment Trust climbed two places from November to seventh most bought trust in December.

Current manager Mark Barnett, who took over in January 2014, has delivered first quartile share price returns over one year (14.8%) and NAV returns of 12.4% while the trust boasts a 3.3% yield.

Money Observer Rated Fund City of London fell one place to eighth most-bought trust in December. The UK equity income stalwart has put in a solid performance over one year, with shares returning 4.7% while its NAV has grown 5.3%.

The trust is another popular income choice, having grown its dividend every year for the past 49 years - the longest record of any UK-listed investment trust. It currently yields 4%.

UK all companies trust JPMorgan Mid Cap rose one place to ninth most-bought trust in December after entering the top 10 for the first time in November.

The trust has gone from strength to strength since manager Georgina Brittain took over in March 2012. Over three years to 24 December shares have returned 141.4% compared to 41.3% from the UK all companies sector, while over one year it has returned 41.2% compared to just 8.6% from the sector.

Money Observer Rated Fund Jupiter European Opportunities was the 10th most-bought fund in December, re-entering the top 10 after a one-month absence.

Managed by the highly rated Alexander Darwall since 2000, the trust is the best performer in share price terms in the AIC's Europe sector over one, five and 10 years to 24 December.

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.