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Three investment trusts I’d buy for my ISA in this market crash

Rupert Hargreaves
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Investment trusts could be a great place to invest your money in the current market crash. Trusts are allowed to keep back a portion of their revenue every year, which can be used to fund dividends in tough times.

This is a great advantage at a time when many other businesses are having to cut dividends to conserve cash. 

Furthermore, investment trusts have more options when it comes to selecting investment assets. They can own stocks, bonds, real estate, precious metals, cash, and many other different asset classes.

Investment trusts to buy

Personal Assets Trust (LSE: PNL) is an excellent example of the diversity of investment trusts. This firm was set up with the single goal of protecting and growing private investors’ capital over the long term. And management appears to be meeting this goal.

The trust, which currently supports a dividend yield of 1.3%, has lost around 4.7% this year. However, the FTSE All-Share has lost around 30% over the same time frame. 

Personal Assets’ portfolio is stuffed full of defensive assets. The most significant position in the portfolio right now is gold. It makes up 9% of assets under management. Cash makes up 5%, and fixed-income securities make up around half of the portfolio.

Are you looking for an investment trust to add to your Stocks and Shares ISA in this market crash? I think it might be worth taking a closer look.

Henderson International Income Trust

With that dividend yield of just 1.3%, Personal Assets doesn’t offer much in the way of income. So investment trusts with an income focus could be the better option for income-seeking investors. Especially those with a long-term time horizon. I think Henderson International Income Trust (LSE: HINT) is a great option here.

With a current dividend yield of 5%, Henderson’s income offering looks attractive in the current interest rate environment. It’s now dealing at a slight discount to net asset value. But historically, the trust has commanded a premium to net asset value.

Some of the most attractive income stocks in the world feature in the portfolio. These include Microsoft and consumer goods giant Nestle. International equities make up almost all of the portfolio. 

Put simply, if you’re looking to buy a diversified international income stream, this could be one of the best investment trusts out there.

Henderson Smaller Companies Investment Trust

For investors looking for exposure to fastest-growing small businesses, Henderson Smaller Companies (LSE: HSL) has an excellent track record of picking winning stocks.

Investing in small growth companies is a risky business. Therefore, gaining exposure to the sector through investment trusts is a great way to reduce risk while profiting from company growth at the same time.

Henderson has 105 different holdings in its portfolio. It charges an annual management fee of just 1.42%. On top of this, the trust supports a dividend yield of 2.6%. The distribution has risen every year since 2000. That’s nearly 20 years of consecutive dividend increases.

Today, investors can buy this trust at a discount of 5% to net asset value. If you’re looking for a way to invest in small-cap growth businesses, without having to pay a hefty fee, Henderson’s offering appears to tick all the boxes.

The post Three investment trusts I’d buy for my ISA in this market crash appeared first on The Motley Fool UK.

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Rupert Hargreaves owns shares in the Henderson International Income Trust, Henderson Smaller Companies Inv Trust and Personal Assets Trust. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Motley Fool UK 2020