Morningstar publishes top ten most researched investment trusts

12th April 2013

The ten most frequently researched investment trusts in the first quarter of 2013 have mostly been large, well-known names with strong dividend histories and solid long-term performance according to fund rating firm and analyst Morningstar.

Morningstar says the investment company structure lends itself well to making dividend payments to shareholders. The board of directors can retain up to 15% of a fund’s dividend income every year in its revenue reserve account and can use that income in future years to smooth or top up, dividend pay-outs during leaner years. The boards of these trusts have successfully used this tool, enabling them to stay true to their progressive income commitments.

With low interest rates persisting in recent times, income has become a very popular theme. Morningstar says it is no surprise that these steady payers are among the most researched funds.

It adds that nine of the funds invest in equity and one follows a flexible allocation mandate. Yet in the last year the majority of new investment company launches have been in alternatives, mainly infrastructure. This makes sense given the less-liquid nature of such strategies, but their lack of presence among the most researched funds suggests that retail investors are, for now, sticking with simplicity.

Nine of the top ten funds also hold a Morningstar analyst rating of Gold, indicating that we are strongly optimistic about these investment trusts’ future performance, and expect them to outperform their peers against the relevant indices over a five year market cycle.


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