3 cheap investment trusts to consider for a Stocks & Shares ISA before 5 April!
Still have some of this tax year’s Stocks and Shares ISA allowance left to use? Here are three dirt-cheap investment trusts I think investors should consider right now.
Schroder Income Growth Fund
As the name implies, the Schroder Income Growth Fund (LSE:SCF) is designed to provide investors with a rising dividend over time. This can be critical for long-term wealth building by protecting investors from inflationary impacts.
Dividends here have risen every year since the fund listed back in 1995.
In total, the Schroder Income Growth Fund has positions in almost 50 predominantly large-cap shares. This focus on market-leading companies with strong balance sheets (like Unilever, HSBC, and Legal & General) gives it excellent dividend visibility.
Today the fund carries a market-beating 5.3% forward dividend yield. And at 294p, its share price sits at a 9.8% discount to its net asset value (NAV) per share.
It may have fewer holdings than many other trusts, which in turn means higher risk. But I still think it’s worth considering at today’s prices.
BlackRock Latin American Investment Trust
The BlackRock Latin American Investment Trust (LSE:BRLA) is designed to capitalise on the region’s rising wealth and growing populations. More specifically, it’s focused on South America’s economic engine rooms of Brazil, Mexico, and Chile.
The fund invests across multiple sectors, helping it to spread risk and profit from a multitude of growth opportunities. Major holdings here include iron ore producer Vale, energy giant Petrobras, and retailer Walmart de México y Centroamérica.
Bear in mind, though, that more than 70% of the trust is invested in cyclical sectors like raw materials and consumer goods. This could leave it particularly vulnerable to periods of economic weakness.
At 307p per share, BlackRock’s Latin American trust trades at a decent 12.2% discount to NAV per share. Meanwhile, its forward dividend yield is a huge 6.2%.
I like it, even though an ongoing charge of 1.13% is higher than that of many other investment trusts.
Baillie Gifford US Growth Trust
The Baillie Gifford US Growth Trust (LSE:USA) is another regional fund I think’s worth a close look from ISA investors. Its high weighting of market-leading global innovators provides plenty to get excited about, in my view.
Major US-listed shares here include Amazon, Meta, Nvidia, and Shopify, though it also holds stakes in private companies. Indeed, Elon Musk’s SpaceX venture represents its largest single holding (11.1% of the total fund).
Once again, this investment trust is well diversified, with holdings spread across nine sectors including information technology, consumer goods, industrials, and telecoms. With a large weighting of technology shares, too, it provides exposure to high-growth areas like cloud computing, artificial intelligence (AI), and e-commerce as well.
Today this Baillie Gifford trust looks dirt cheap. At 227p per share, it trades at a 10.3% discount to its NAV per share. That’s attractive value in my book, even though a US recession could dent near-term performance.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. HSBC Holdings is an advertising partner of Motley Fool Money. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Royston Wild has positions in Legal & General Group Plc. The Motley Fool UK has recommended Amazon, HSBC Holdings, Meta Platforms, Nvidia, Shopify, and Unilever. 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.
