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UK share investors have a vast selection of investment trusts to choose from today. Whether someone is seeking growth or passive income — or a combination of both — there are plenty of options to suit every individual’s investment style.
With this in mind, here are two top, balanced trusts worth serious consideration right now.
Global dividend trust
Through a combination of share price gains and dividend income, the Bankers Investment Trust (LSE:BNKR) has delivered an average annual return of 11% over the last 10 years.
To put that into context, the FTSE 100‘s delivered a 7% return on the same basis. The FTSE 250 index of mid-cap growth shares produced a 5% average return.
Bankers could be an especially great trust to consider for investors leaning more closely towards dividends. It targets payout growth “greater than inflation, as measured by the UK Consumer Prices Index“, and has raised cash rewards for 58 consecutive years.
The trust’s portfolio comprises roughly 100 global shares, and has significant holdings in technology shares such as Microsoft, Amazon, Apple and Alphabet.
This provides significant growth potential as the digital economy rapidly grows. In total, around 32% of the fund is tied up in tech stocks. But remember that this high weighting could cause Bankers to underperform during economic slowdowns.
High yield growth trust
The JP Morgan Global Growth & Income (LSE:JGGI) trust has performed even more strongly over the last decade. Since summer 2015, it’s provided an average annual return of 17.1%.
As a consequence, it’s comfortably achieved its goal of providing better returns than the MSCI All Country World Index. The total return here sits way back at 10.5%.
This JP Morgan investment trust doesn’t have the stunning dividend growth record of Bankers. Cash rewards fell sharply in 2016 after it reset its payout policy, reflecting plans to deliver dividends totalling 4% of its net asset value (NAV).
But dividends have grown strongly since then, and the revised policy means the trust beats most UK shares on yield.
Like Bankers, it holds a high proportion of US tech shares. This leaves it vulnerable to a slowing global economy, as well as a prolonged market shift from Wall Street equities to non-US stocks.
UK dividend trust
City of London Investment Trust (LSE:CTY) has also raised dividends consistently for more than half a century. They’ve grown every year since 1966, to be exact.
Combined with share price gains, this means over the last decade the trust’s delivered an average annual of 10.6%. I strongly believe returns could substantially improve over the next 10 years as broader demand for UK shares continues to pick up.
You see, City of London is focused on blue-chip companies from Britain’s stock market. These make up around 93% of the entire portfolio, in fact, with major holdings including HSBC, BAE Systems, Shell and Lloyds.
This geographic allocation creates more regional risk than those other global trusts I’ve described. But it also provides the potential for greater returns if the recent shift from US equities to UK stocks continues.
