Here are 2 investment trusts and funds packed with top growth shares to consider!
Looking for great growth shares to buy? I think these investment trusts and exchange-traded funds (ETFs) could be great ways to target long-term capital growth.
L&G Cyber Security ETF
The L&G Cyber Security ETF (LSE:ISPY) does what it says on the label. It provides exposure to a swathe of tech companies whose primary role is to protect individuals and businesses against online threats.
In total, the fund holds shares in 35 different companies. These include pureplay security providers including Palo Alto, CrowdStrike and Rubrik, and more diversified tech specialists such as Cisco. It also has a significant holding in telecoms giant Broadcom.
This provides multiple ways for investors to capitalise on the surging digital economy, but with a focus on the fast-growing (and potentially more resilient) cyber security segment.
A Royal Institution of Chartered Surveyors (RICS) survey shows 27% of UK companies have experienced at least one cybersecurity incident in the last year. That’s up from 16% a year ago, data shared with the Guardian newspaper shows.
What’s more, almost three-quarters of the 8,000 business leaders surveyed believe an online attack will disrupt their business in the next 12-24 months. In this climate, I believe it’s fair to expect rapid growth in the cybersecurity market to remain broadly resilient even if economic conditions worsen.
Legal & General‘s fund has delivered an 11.3% average annual rate of return since 2020. I bought it for my own portfolio, even though the rise of artificial intelligence (AI) poses substantial challenges for the sector moving forwards.
BlackRock Smaller Companies Trust
The BlackRock Smaller Companies Trust (LSE:BRSC) invests in a far more diversified selection of companies. But with a focus on small-and mid-sized businesses, it also has significant growth potential by excluding more mature blue-chip shares.
In total, the investment trust holds 103 different companies spanning different sectors. Industrials, financials and consumer goods are all well represented (accounting for 27%, 24% and 20% of the portfolio respectively). Other industries covered include real estate, technology, healthcare and basic materials.
Some of the trust’s largest weightings are financial services provider XPS Pensions, raw earth materials supplier Breedon and book publisher Bloomsbury Publishing.
Another interesting feature of the trust is its focus on UK equities (99% of the complete portfolio). On the one hand, this means it carries greater geographic risk than continental or global funds. It’s only delivered an average annual return of 3.8% since 2020.
However, it may also lead to superior returns going forward if a recent rotation away from US equities and into European and UK ones continues. It’s also worth mentioning that the past five years were characterised by post-Brexit political turbulence and high interest rates in the UK. These headwinds may prove far less significant over the next half-decade, but they remain risks nonetheless.
Today, the BlackRock trust trades at a weighty 12.8% discount to its net asset value (NAV) per share. I think that makes it worth serious consideration from long-term value investors.
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Royston Wild has positions in Legal & General Ucits ETF Plc – L&g Cyber Security Ucits ETF. The Motley Fool UK has recommended Bloomsbury Publishing Plc, CrowdStrike, and Xps Pensions Group Plc. 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.
