She says: “This, together with the unique set of tools available to investment trusts, (as mentioned above) has resulted in investment trusts outperforming open-ended funds over three, five, 10 and 15 years.”
Source: Association of Investment Companies. Data is to February 28 2019.
Consider the sectors
Ultimately, the factors that advisers use to choose open-ended funds apply similarly to investment trusts, says Mr Wilson.
While the investment trust universe is smaller than the open-ended galaxy, it possesses a much more diverse range of asset classes, including an array of illiquid and alternative assets best invested away from the vagaries of fluctuating asset flows, notes Mr Wilson.
He explains: “It also possesses a rich heritage of ancient, ‘tried and tested’ trusts that invest in more traditional asset classes and have prospered through all the ups and downs of the stock market over the last 100 years or so.”
So advisers should spend time in the sector, he continues.
Mr Wilson points out: “They should ask themselves how it is that they know the open-ended sector so much better than the closed-ended sector.
“The answer is that they have spent time familiarising themselves with these collectives and the characters who manage the money.”
victoria.ticha@ft.com
