Here is a selection you may wish to consider for your portfolio:
City Natural Resources High Yield
New City Investment Managers, which was established in 2004, has only five investment funds under management – all of which are closed-ended.
Among these is the £147m City Natural Resources High Yield trust, which has impressed with its strong performance in recent years.
According to FE data, it is comfortably the best-performing trust in its IT Commodities & Natural Resources sector over three and five years, with returns of 83.62 and 48.01 per cent respectively.
Among those that it has beaten is FE Alpha Manager Evy Hambro’s highly rated BlackRock World Mining trust.
Performance of trusts vs sector over three years
Source: FE Analytics
With a one-year historic yield of 2.02 per cent, it also pays out significantly more than the average commodities fund or trust.
The portfolio has been headed up by Ian Francis and Will Smith since November 2009. Rob Crayfourd joined them in February this year.
City Natural Resources High Yield is a risky fund, reflected by an FE Risk Score of 156 – one of the highest in the AIC universe. It has a small-to-mid cap bias, with around a third of its assets invested in precious metals and stones and another third in oil and gas companies.
The strong performance of the portfolio led investment trust analyst Winterflood Securities to add it to its buy-list back in January, at the expense of BlackRock World Mining.
The trust has a total expense ratio (TER) of 1.5 per cent and is on a discount of 13.3 per cent. By contrast, BlackRock World Mining IT is on a discount of 10.8 per cent.
Capital Gearing Trust
CG Asset Management runs four open-ended funds, as well as one investment company – the Capital Gearing Trust.
Headed up by Peter Spiller since January 1982, it is consistently a top-quartile performer in its IT UK Growth sector and has arguably the best risk/return profile. According to FE data, it is the least volatile portfolio of its kind by some distance over three, five and 10 years.
Performance of trust and sector over 10 years
Source: FE Analytics
The £87m portfolio is a trust of trusts, which means that it invests almost entirely in closed-ended funds.
It uses the FTSE Investment Companies index as its benchmark, which it has beaten over one, five and 10 years; over three years, it has fallen short by around 1 per cent, albeit with significantly less volatility.
It is an exceptionally diversified portfolio, with only 9 per cent invested in its top-10 holdings. Only three holdings have an exposure of more than 1 per cent.
It is the only trust in its sector that is trading on a premium to NAV – 1.9 per cent according to the latest AIC update.
Lindsell Train IT
FE Alpha Manager Nick Train has headed up this £48.6m trust since its launch in January 2001, with a great deal of success: according to FE data, it has returned 151.85 per cent over the last decade, which has only been beaten by two of its rivals in the IT Global sector.
It is a top-two performer over three- and five-year periods as well.
The portfolio is highly concentrated, with 77 per cent of its assets in just 10 holdings. It is predominately invested in the UK, but also has significant positions in Japan. Nintendo and the Lindsell Train Japanese Equity fund are among Train’s highest-conviction plays.
The trust has a TER of 1.1 per cent and is currently trading on a premium of 4.43 per cent.