3 top FTSE 250 investment trusts to consider buying today
Buying investment trusts can be a fantastic way to improve portfolio diversification. In one fell swoop, they provide exposure to dozens (or even hundreds) of holdings across geographies and sectors. The good news is that there are lots of them in the FTSE 250.
Here are three from the mid-cap index that I think are worth digging into.
USA
The first is Allianz Technology Trust (LSE: ATT), which “offers investors access to the fast moving world of technology, the single greatest contributor to global growth.”
The top holdings are unlikely to shock anyone, comprising the likes of Microsoft, Apple, Amazon, and chipmaker Nvidia. While these all have commanding competitive positions, they also relentlessly invest for future growth. So there’s nothing stopping them from becoming even larger.
One thing I like here is the management team’s close proximity to Silicon Valley, where many of the world’s key technology companies — both today’s and likely future — are based. As a result, we see less-well-known tech stocks like Cloudflare and AppLovin in the portfolio.
Naturally, this concentration in predominantly US tech stocks adds risk. The trust would perform badly were this sector to sell off, as happened in 2022. The Allianz Technology share price crashed around 40% in just six months back then.
Since those lows though, the stock has doubled.
Core investment themes include artificial intelligence (AI), cloud computing, and cybersecurity. All three are likely to become more important over the next decade.
The trust is currently trading at a 9% discount to net asset value (NAV).
Global mining
Next up is BlackRock World Mining Trust (LSE: BRWM). This holds mining stocks involved in producing copper, steel, gold, silver, and much else.
The five largest holdings today are Vale, Agnico Eagle Mines, BHP, Rio Tinto, and Wheaton Precious Metals.
Recent performance has been strong, with the shares up nearly 20% year to date. However, it’s worth bearing in mind that volatility might be on the horizon, as tariffs work their way through the system.
After all, mining stocks are usually the first to sell off aggressively if there’s any whiff of the global economy slowing down.
Investors buying today are being offered a 4% dividend yield to sit out any volatility. Longer term, the key growth theme in the portfolio is the global energy transition, which will need copious amounts of copper, steel and nickel.
Asia Pacific
Finally, something a little bit different with Pacific Horizon Investment Trust (LSE: PHI). This one invests in growth stocks across Asia (excluding Japan).
At the end of June, the top five holdings were Taiwan Semiconductor (TSMC), Tencent, Samsung Electronics, SK Square, and TikTok owner ByteDance. The largest geographical allocations were China (30%), Taiwan (15.6%), and India (14.6%).
Again, tariffs are a risk here. We don’t yet know the damage these have done to manufacturing hubs in Asia, particularly Vietnam.
Despite this, Asia is widely tipped to drive a large chunk of global economic growth over the next 20 years. Indeed, it’s projected that two out of every three people in the global middle class will be Asian by 2030.
The share price remains 32% below its November 2021 peak, while the NAV discount is 10.5%. This suggests to me that now might be a great time to consider investing.
The post 3 top FTSE 250 investment trusts to consider buying today appeared first on The Motley Fool UK.
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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. Ben McPoland has positions in BlackRock World Mining Trust Plc, Cloudflare, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool UK has recommended Amazon, Apple, Cloudflare, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. 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.
