View more on these topics

Julian Gibbs

Over the longer term, well-managed smaller companies investment trusts and

unit trusts usually outperform their bigger company equivalents.

Over the past five years, UK smaller companies unit trusts have gone up on

average by 142 per cent against a rise of 103 per cent for the UK all

companies sector and 79 per cent for the UK equity income sector.

Friends Ivory & Sime has produced a 20-20 portfolio which comprises its

three smaller company investment trusts, all of which have outperformed

their relevant indices.

Each of the trusts invests in a different part of the smaller companies

market. The Aim trust, up by nearly 300 per cent in three years, is managed

by Bill Brown and is the top performer in its sector by a long way. The

Discovery trust invests in fledgling companies with a market capitalisation

of below £50m, while the UK smaller companies trust invests in a wide

range of companies with market capitalisations of up to £500m.

The 20-20 portfolio has a worthwhile advantage over nearly all other

investment trust and unit trust portfolios in that there is a lifetime

guarantee. Should the investor die, it pays out at least the value of the

original investment to the heirs even if the stockmarket has fallen

considerably.

Furthermore, the minimum guarantee is reviewed each year on April 5 each

year and, if the portfolio has risen, the new price becomes the guarantee.

Another advantage is that the investor can choose to take an income of up

to 10 per cent a year of his or her original investment, paid quarterly,

which will comprise part income and part capital gains.

This seems to be an ideal Isa investment for the long-term investor.

Recommended

EMX sets out revised timetable for joining

Electronic trading platform EMX has announced a revised timetable for product providers and IFAs who missed the boat to join up first time round. The new dates are July 31, August 31, September 29 and October 31. Once participants have signed up they go through a trial period to test the functionality of the system. […]

Business people will trade to aid deaf children

Businesspeople are being offered the chance to gamble with someone else&#39smoney to raise cash for the National Deaf Children&#39s Society.Working in teams, participants will be given £30,000 to invest infictitious companies.The event will pack five days&#39 imaginary trading into one evening. Theteams will be expected to weigh up trading floor speculation and pressreleases to see […]

It&#39s stake or break time

Most, if not all, IFA firms must now be considering their strategy for thepost-stakeholder world. There is a vast range of options from moving out ofpension advice altogether to actively embracing stakeholder and all itimplies.If it makes good sense for the business to adopt a pro-stakeholderapproach, now is the time to be active, particularly with […]

Bank rates on hold again

Interest rates will remain on hold at six per cent for the fourth consecutive month. The Bank of England&#39s Monetary Policy Committee has decided to keep the base rate unchanged at their monthly meeting this week. The move has been greeted with acclaim by the business community. Last month, the decision to maintain the status […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment