Investment trusts, also known as closed-end funds, are companies listed on a stock exchange that invest in a portfolio of assets on behalf of their shareholders. As actively managed investment vehicles, investment trusts allow portfolio managers flexibility to pursue returns while providing investors exposure to a diverse range of assets. The global investment trusts sector has seen rapid growth in recent years, led by several key players who manage billion-dollar portfolios spanning various geographic regions and asset classes. This article will analyze the major global investment trusts by assets under management and summarize their investment strategies and portfolios.
Scottish Mortgage Investment Trust is the largest investment trust globally with £16 billion under management
Scottish Mortgage Investment Trust, managed by Baillie Gifford, is the largest investment trust in the world with over £16 billion ($19 billion) of assets under management as of September 2022. Launched in 1909, it invests globally in a concentrated portfolio of publicly listed and private companies across sectors including technology, healthcare and consumer brands. Scottish Mortgage aims to identify and invest in high-growth companies, with significant holdings in U.S. tech giants such as Tesla, Amazon and Netflix. It has achieved strong returns driven by its growth-oriented strategy.
Foreign & Colonial Investment Trust focuses on global equities and has £4 billion under management
The Foreign & Colonial Investment Trust is one of the oldest investment trusts, launched in 1868, and manages £4 billion in assets. Its portfolio spans over 450 stocks with a geographical focus on developed markets such as the U.S., Japan and Europe. The trust aims to generate long-term capital and income growth through investing in global equities. It adopts a multi-manager approach, allocating its portfolio to several underlying managers with expertise across geographies and sectors. The diversified nature of its portfolio aims to reduce volatility and offer steady returns to investors.
Capital Gearing Trust specializes in asset preservation with £1.4 billion under management
The Capital Gearing Trust distinguishes itself with an explicit goal of wealth preservation, managing assets of £1.4 billion. Established in 1937, it invests across asset classes including equities, bonds, real estate and gold to mitigate risk. The trust avoids overpriced assets and adopts flexible allocation between defensive and cyclical stocks. This cautious, risk-averse approach has produced consistent positive returns, and its share price has grown over 11% annually for the past decade.
RIT Capital Partners invests in both public and private markets with £4.1 billion under management
Founded in 1961, RIT Capital Partners manages £4.1 billion for an international shareholder base. With a total return approach, it invests across listed equities, private equity, hedge funds, credit and absolute return strategies. The trust aims for strong capital appreciation over the long term and preservation of shareholders’ capital. RIT Capital Partners has significant exposure to private markets and invests in late-stage venture capital and buyout opportunities. This provides access to growth companies and co-investment deals.
In summary, the largest global investment trusts manage multi-billion dollar portfolios across public and private markets worldwide. While strategies differ, they aim to generate long-term capital growth for investors. Scottish Mortgage, Foreign & Colonial, Capital Gearing and RIT Capital Partners are among the leaders but face competition as the investment trust sector continues to consolidate globally.