You might be forgiven for thinking we’re in the middle of a mania for investment trusts, with several high-profile new issues accepting applications at the moment. Surging public interest in the stock market is a classic sign of a bubble, so let’s see how 2018 compares to other years.
Applications are now open for Smithson Investment Trust, the keenly anticipated new offering from Terry Smith’s Fundsmith. No doubt many people will be happy to take the plunge purely on the basis of the great run the Fundsmith Equity Fund has had. But here are a few things that I think are worth knowing before you make any decision.
The shipping empire turned investment trust Caledonia Investments (CLDN) is currently one of my biggest holdings. It’s one of a few listed funds that is still family controlled and it boasts a 51-year track record of increasing its dividend. What’s more, it’s beaten the UK market by a respectable margin since it became a fully fledged investment vehicle in 1987. Yet it persistently trades at a discount to net assets of around 20%. So, what gives?
You wait for one investment trust launch from a legendary fund manager then, before you know it, along comes another. Following last week’s announcement of Smithson Investment Trust, we now have more details on Mobius Investment Trust, the latest offering from emerging markets guru Mark Mobius.
Comments from Terry Smith in recent weeks led some people to believe that Fundsmith was about to launch a small-cap investment fund. This morning it was confirmed: Smithson will soon be with us.
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