- Selecting reliable investments is crucial for pension and retirement funds
- Investment trusts with dividend growth histories are popular for retirees
- Financial advisors recommend trusts for both retirement phases
When constructing a pension fund or allocating funds for retirement, locating a dependable investment is crucial.
While returns are not assured and investments can experience both positive and negative movements, certain attributes distinguish certain investments from others.
Numerous investment trusts have established noteworthy histories of dividend expansion, which has rendered them a favoured choice among retirees seeking a supplemental income.
However, financial advisors have also compiled a list of the best investment trusts for those who are in the process of accumulating a pension.
For those in need of an income during the ‘decumulation’ phase of retirement and for the ‘accumulation’ phase of a saver’s life, the Association of Investment Companies has compiled expert recommendations.
Investment trusts are publicly traded corporations whose shares are listed on the stock exchange.
They are referred to as closed-ended because investors may purchase or sell shares in order to join or withdraw from the pool, but cannot raise additional capital without issuing new shares.
In contrast, open-ended investment funds do not aggregate capital for the purpose of investing in stocks, bonds, or other types of funds.
Due to the fact that their shares may trade at a premium or discount to the value of the assets they possess, investment trusts may be riskier than funds (more on this below).
While four professional financial advisers have compiled the following list, it is important to note that this is not personalised financial advice. Ultimately, you should determine whether an individual investment is suitable for your circumstances. When uncertain, consult an impartial financial advisor.
Considering the potential forthcoming increase in the age at which an individual can access their pension and the presumably perpetually rising state pension age, pension investing is a long-term endeavour.
In light of this, investment trusts, a number of which are currently trading at near-record discounts, may prove to be an outstanding choice.
Investment trusts with a focus on the United Kingdom are especially attractive at discounts, and the Mercantile Investment Trust, managed by JPMorgan, which has been trading at a double-digit discount for several months despite exhibiting excellent short-term performance, is one suggestion for the accumulation phase of investment.
In the accumulation phase, when diversification and growth are critical, I would advise investing in Worldwide Healthcare Trust.
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By investing in an actively managed portfolio, this global trust provides investors with the chance to acquire exposure to pharmaceutical, biotechnology, and other pertinent healthcare companies.
These range from unquoted nascent biotechnology firms to large multinational pharmaceutical corporations. OrbiMed Capital, which was established in 1989 and has since grown to become the largest healthcare investment firm globally, oversees the fund.
The team is currently conducting an active examination of approximately 1,000 companies. Its objective is to identify sources of outperformance and companies that possess underappreciated products in the pipeline, as well as those with strong financial resources and high-quality management teams.
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