The Association of Investment Companies has brought forth a report on the types of investment trusts finding most favour with DFMs, which Asset Allocator has dutifully read so you don’t have to.
Institutional owners occupy about half the shareholder registers of these vehicles, with wealth managers making up exactly one-quarter of all that ownership.
Zooming in on wealth managers slug, the AIC notes that they are most fond of infrastructure investment trusts, making up 31 per cent of the overall ownership.
They prefer equity investment companies to alternative investment companies, with 28 per cent and 20 per cent representation to the respective asset classes.
The proportion of investment trust ownership by wealth managers is highest in the "specialist" category, which includes hedge funds, commodities and natural resources, where it sits at 40 per cent.
That high ownership level is driven largely by the fact wealth managers own 64 per cent of hedge funds.
Rathbones is the biggest buyer of investment trusts, owning 3.7 per cent of the industry market cap. This is followed by Evelyn Partners and Investec, though last year’s merger of the Rathbones and Investec means consolidation is afoot there.
Brewin Dolphin and Quilter Cheviot also make up the top five.
The popularity of investment trusts drops off quite steeply among wealth managers, with only six owning more than 1 per cent of industry market cap and five holding between 1 per cent and 0.5 per cent.
Demand for equity investment trusts among our allocators has always been fairly soft, and we touched upon this topic last week after Winterflood research revealed that fewer respondents intend to be net trust buyers this year.
But the data highlights how there are certainly some sectors where trusts are less popular: including debt and private equity where ownership by wealth managers sits at 18 per cent and 10 per cent respectively.
Nonetheless ownership of investment trusts among wealth managers has held up over the past 12 months - with only a 1 per cent fall in the proportion of ownership.
One of the equity investment trusts that is owned on our database is Monks, which is run by Baillie Gifford and has seen two buyers in recent years. Meanwhile Scottish Mortgage, which is also run by the Edinburgh firm, has seen a modest uptick in popularity with one buyer at the end of last year - taking it to three holders.
