Advisers and wealth managers are buying record amounts of stock in investment trusts, new figures have shown.
Figures from the Association of Investment Companies (AIC) show that £777m of investment into these trusts were made through adviser platforms in the 12 months to the end of March this year. This is an eleven per cent increase on the previous year, which was also a record.
The figures show that, since RDR, sales of investment trusts have grown 202 per cent. Ian Sayers, chief executive of the AIC, said that the news was “very positive”.
“It seems that buyers on adviser platforms are becoming increasingly aware of the strength of the closed-ended structure for accessing illiquid assets, he added.
The figures show that the top sector was Sector Specialist: Debt, accounting for 14 per cent of purchases. Following on from this sector were the Global sector, with 12 per cent, UK Equity Income was the third most popular sector, followed by Infrastructure and Private equity.
Mr Sayers said that the popularity of the property sector may have been due to issues with open-ended property funds, which saw many investors locked in after post-Brexit volatility.
“It’s interesting to see that the specialist debt sector, which focuses on illiquid debt, has taken the top spot for Q1 2017. It seems that buyers on adviser platforms are becoming increasingly aware of the strength of the closed-ended structure for accessing illiquid assets,” he added.
Matthew Bird, financial adviser from Seer Green in Wales, said that Investment Trusts haad pros and cons. “They have recently proved to perform slightly better than unit trusts and OEICs but they can also be more volatile because they can trade below or above their NAV. " He also said that the the structure of the trusts made it harder to use them for customers who wanted to make smaller, regular payments, which was easier with open-ended funds.
