Once again, the investment trust ideas thrown up by our Greenblatt-inspired Magic Formula screen would, in aggregate make for an interesting and diverse global equities portfolio. The screen, which combines measures of quality and value (based on the historic premium-discount ranges of the funds) has selected funds that invest in a range of themes from biotech to real estate; and European value to US growth stocks.
- There are five new funds in our diverse Top 10 investment trust portfolio. These include Pershing Square Holdings (PSH), Woodford Patient Capital (WPCT), Regional REIT (RGL), JPM American (JAM) and Caledonia (CLDN)
- Pershing has historically traded at a discount but it is currently in deep value territory, possibly due to its retail holdings (38 per cent of AUM, Source:Bloomberg). The holdings are perhaps not as cyclical as they seem at first sight, however, with exposure to U.S. fast food chains and business data outsourcing solutions.
- Woodford Patient Capital might be a good option for investors who believe it is time that value as a style came back into vogue
- JPM America has an interesting mix of holdings, including U.S. banks and oil majors. It also has exposure to Apple and Microsoft. Other trusts in the Top 10, like Alliance Trust (ATST) hold big U.S. tech too. Holding this combination of trusts would mean not being out of the companies on stretched multiples but it would potentially give an interesting tilt from the MSCI World Index in terms of sector exposure.
