Based on the number of deals placed by AJ Bell customers in the past month, Pacific Horizon (PHI) was the most popular investment trust purchase as bargain-hunters sought exposure to Asia Pacific growth opportunities at a discount.
Hot on its heels in terms of the number of buy orders placed was BlackRock Smaller Companies (BRSC), as investors wagered the double-digit discount to net asset value (NAV) on this high-quality growth stocks portfolio was overdone.
Buyers also came in for Baillie Gifford’s flagship trust Scottish Mortgage (SMT), keen to position themselves for an eventual recovery in growth stocks, though other customers took the opposite side of the trade as the FTSE 100 trust was also the month’s most sold name by in terms of number of trades.
PACIFIC HORIZON PROVES POPULAR
Pacific Horizon was the most-bought trust by deals placed as investors wagered a 32% year-to-date slide in the Baillie Gifford-managed trust’s share price was overdone.
Steered by Roderick Snell, Pacific Horizon aims to achieve capital growth through investment in the Asia Pacific region (excluding Japan) and the Indian sub-continent.
As of 31 October, 27% of the fund’s assets were in India, which is forecast to deliver one of the globe’s highest earnings-growth stories this year supported by a pro-growth budget, followed by 21.1% in Hong Kong and China.
AJ Bell customers were also keen to buy BlackRock Smaller Companies, the Roland Arnold-managed trust whose shares have fallen 38% in 2022-to-date amid poor sentiment towards small-cap stocks and a more challenging year for performance.
However, as Investec recently pointed out, the trust’s long-term performance record is exceptional with the company having outperformed its benchmark in 18 of the last 19 years.
Shares in Scottish Mortgage are down 45% year-to-date, with the FTSE 100 trust buffeted by headwinds in the form of red-hot inflation and rising interest rates as well as concerns over the valuation of its unlisted portfolio which continue to worry investors.
Scottish Mortgage was the month’s most bought and sold trust by value, followed by Baillie Gifford stablemate and real dividend growth-focused Scottish American (SAIN).
OTHER POPULAR CHOICES
Other top investment trust buys included European Opportunities (EOT), the Alexander Darwall-managed trust which Singer Capital Markets says is ‘positioned for growth in a difficult environment’ and has ‘a history of outperforming as the market recovers’.
The second most-sold name was Home REIT (HOME), the sheltered housing investment company whose shares have slumped since becoming the target of a damaging report from US short seller Viceroy, which the company has rebutted.
Disclaimer: Financial services company AJ Bell referenced in the article owns Shares magazine. The author of the article (James Crux) and the editor of the article (Ian Conway) own shares in AJ Bell.
