By contrast, I’d be happy to buy Caledonia Investments (LSE: CLDN), one of whose strategies also deploys so-called ‘patient capital’ — that’s to say, capital invested on a longer time horizon, with intensive support of management of the investee company, in anticipation of an ultimately higher return.

Concerns

My biggest concern about Patient Capital Trust has been its rapid morphing into a far riskier investment proposition than that suggested by its launch prospectus.

In particular, Woodford got the board to raise the ceiling on the proportion of unquoted companies he could hold (from 60% to 80%) and to drop a policy of not using long-term gearing (£150m borrowing facilities were arranged and utilised).

My other big concern is that some of the unquoted companies are in the books at what could prove to be over-rosy valuations, due to the subjective nature of such valuations.

Discount doesn’t tempt me

Since the gating of Woodford’s flagship Equity Income Fund and his plan to sell its unquoted and  illiquid holdings, many of which are also held by Patient Capital, the latter’s share price has dived to a steep discount to net asset value (NAV) — currently 33%.

The board has recently agreed a schedule with Woodford to halve the level of gearing within six months and to be ungeared within 12 months. Woodford also now has to get board approval for any new investment or further investment in existing assets.

I view this as shutting the stable door after the horse has bolted. Furthermore, I think it’ll only add to the pressure on the valuation — and in some cases survival — of the investee companies. As such, even the 33% discount to NAV doesn’t tempt me.

Patient capital context

Caledonia Investments is a long-established trust. There’s a particular context for its deployment of patient capital: “Our heritage can be traced back to the shipping empire established by Sir Charles Cayzer in 1878. We continue to enjoy the backing of the Cayzer family, who own some 48.5% of the share capital. The Cayzer family shareholding provides both support to our long-term value investment horizon and provides a foundation to our culture of conservative generational wealth management.”

Differentiated portfolio

The trust employs four strategies. In what it calls its Quoted Pool there are “high-quality compounding companies.” Its current 19 core holdings include Microsoft, Nestlé and AG Barr. Well-known listed companies also feature in its Income Pool. These include the likes of Lloyds, GlaxoSmithKline and Imperial Brands.

Its other two pools — Unquoted and Funds — target higher returns. In the Unquoted Pool there are 11 established UK businesses in which Caledonia has a majority or significant minority interest. For example, Cooke is the market-leading UK manufacturer of premium-end cinematography lenses for film and television. Meanwhile, its Funds Pool is focused on US and Asian private equity funds.

I like Caledonia’s differentiated portfolio and deployment of patient capital in the Unquoted Pool. The stock is trading at an attractive 16% discount to NAV. It also offers a 1.9% dividend yield, and has a record of 52 consecutive years of dividend increases.

The post Why I’d buy this investment trust ahead of Woodford Patient Capital appeared first on The Twelfth Magpie.

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G A Chester has no position in any of the shares mentioned. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline and Microsoft. The Motley Fool UK has the following options: long January 2021 $85 calls on Microsoft. The Motley Fool UK has recommended Imperial Brands and Lloyds Banking Group. 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.

Income heroes

The most consistent ‘dividend heroes’ can now be named as Caledonia Investments (LSE: CLDN), the Bankers Investment Trust (LSE: BNKR) and JPMorgan Claverhouse Investment Trust (LSE: JCH). These investment trusts have the distinction of raising their dividend by more than inflation every single year — without interruption — for two decades, according to new research from investment platform AJ Bell.

As well as offering consistent dividend growth, Caledonia and Bankers generated a total return of a massive 580.4% and 474.3%, respectively, over the last 20 years, while also increasing dividends by 5.3% and 6.5% a year on average. The beauty of a rising dividend is that it helps you beat the eroding effect of inflation, and give you a steadily growing income in retirement.

I’ve included long-standing investment trusts F&C and Witan in the table below, because they also deserve respect for increasing their dividends by 7.2% and 6% a year, respectively, over the same 20-year period.

Caledonia, which can trace its roots back to 1878, currently has around £2bn under management. It runs a concentrated portfolio of international investments and funds, targeting proven businesses with long-term growth characteristics and the ability to deliver rising income. This is no closet benchmark tracker. Its 10 largest holdings are mostly unfamiliar names to me such as Deep Sea Electronics, Cobehold and Buzz Bingo, although Microsoft was really recognisable at number 10.

As Alan Oscroft recently noted, Caledonia has now increased its dividend for 52 consecutive years, yet it currently trades at a massive discount of 16.3% to net asset value.

Bankers Investment Trust aims to beat the FTSE World Index for capital growth while generating annual dividend growth above the UK retail prices index, again by investing in global listed companies. It’s 30% invested in North American, with slightly less cover in the UK, while the remainder of its £1.17bn portfolio is divided between Europe, Asia-Pacific and Japan.

Mainstream

Here the stock picks are a lot more mainstream, with American Express, Microsoft, Berkshire Hathaway, MasterCard and Visa figuring in its top 10 holdings. The discount isn’t as generous, with just 2.11% to net asset value, but its differing holdings mean it could nicely complement Caledonia in your retirement portfolio.

JP Morgan Claverhouse is a UK equity income fund with a conviction portfolio of between 60 and 80 stocks. It’s also a smaller fund, with £434m under management, and returns are impressive given how the UK has underperformed compared to many global markets. It currently trades at a discount of 4.7% to net asset value.

These three investment trusts could give you all the joys of rising growth and income, with none of the trouble of dealing with buy-to-let tenants.

The post Forget buy-to-let! I’d buy these 3 investment trusts for growth and income appeared first on The Twelfth Magpie.

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Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Mastercard and Visa. 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.

But when I talk to young people who are just starting out and have decades of investing ahead of them, they tend to think that’s a bit boring and want some excitement from growth opportunities. And I think that’s fine, as they can spread the risk out over time.

One approach is to look for companies with great potential, which have yet been realised. And that, as it happens, sums up Caledonia Investments (LSE: CLDN). As well as holding some big international stocks, the investment trust also looks to acquire smaller companies with growth potential and then puts in the effort to achieve it.

Cracking return

On Tuesday, the firm announced its most recent success after the sale of Choice Care Group, a provider of residential services for people with learning disabilities and mental health conditions. The disposal of its 87.4% stake has netted Caledonian £99.4m in cash (including pre-sale dividends of £7.1m).

Considering it paid £49.5m initially for it, invested a further £5.4m in the business, and has also received earlier dividends of £6.1m, that looks like it’s been a canny deal. In fact, it represents an internal rate of return of 14.3%, and a money multiple of 1.9 times. That’s a top result.

The proceeds will be put towards repaying cash drawn under the company’s loan facilities for the acquisition earlier this month of Deep Sea Electronics, an electricity generator and intelligent battery charger specialist.

Caledonia’s dividend yields are modest at around 2%, but it’s raised its dividend for 51 years in a row now. The shares are currently trading on a discount to net asset value of 24%, even after gaining 40% in the last five years.

Go for growth

Another way to spread the risk of going for smaller growth companies is to buy an investment trust that specialises in them. So I do like the look of the Standard Life UK Smaller Companies Trust (LSE: SLS).

As it says on the tin, the trust invests in smaller companies in the UK, looks for growth, and seems to be rather good at it.

A share issue related to the reconstruction of the Dunedin Smaller Companies Investment Trust has led to a fall back in the share price since early October, but we’re still looking at 46% share price appreciation over the past five years, compared with the FTSE 100‘s meagre 5% gain.

Some dividends

And though the trust is firmly chasing growth, it’s still paying a modest dividend too, which has been yielding around 1.5-2% in recent years.

What an investment trust like this relies on is having a good manager and, as my colleague Rupert Hargreaves has pointed out, in Harry Nimmo they have one of the top smaller-companies experts in the business.

At 9.5%, the trust is trading at a smaller discount to some of its peers, but after the recent share price dip, I reckon that makes it look like pretty good value.

The post 2 investment trusts I’d pick for a starter pension portfolio today appeared first on The Twelfth Magpie.

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Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

British Empire(LSE: BTEM) and Caledonia(LSE: CLDN) are two investment trusts that are very much focused on value. While they’ve delivered decent enough returns over the past decade in absolute terms, they’ve underperformed relative to many of their peers. I believe the stage is set for this to reverse.

Out of favour

The table below shows recent share prices and net asset values (NAV) for the two trusts and their 10-year total returns in terms of share price-plus-dividends and NAV-plus-dividends.

As you can see, the 10-year return of the shares has significantly lagged the 10-year return of NAV. This, and the current discounts to NAV, shows how out of favour the two trusts have become over the period.

In contrast, in the investment trust global sector as a whole, the current average discount to NAV is less than 2% with a number of trusts actually trading at a premium. Furthermore, over the last 10 years, the sector’s average share price return of 226% has been well ahead of the NAV return of 182%. This shows how popular many more growth-orientated trusts have become over the period.

I’d happily buy British Empire and Caledonia today on the expectation of high returns over the next decade from the double drivers of an improving performance from value strategies and a change in investor appetite to value from growth. If this plays out, I would expect the two trusts not only to beat the FTSE 100, but also to be prominent performers in the investment trust global sector.

Value hunters

British Empire and Caledonia are both long established and have a geographical go-anywhere approach in their hunt for value. They also don’t restrict themselves to quoted companies and the big stock market names that feature in many global trusts.

British Empire, in which my Foolish colleague Rupert Hargreaves has recently invested, looks to identify discounts to intrinsic NAV in its investments and has particular focus on closed-end funds and family-owned holding companies. Its current largest holding, Japan Special Situations, is a basket of 18 deep-value stocks. Its second-largest holding, Exor, is an Italian-listed holding company run by the Agnelli family.

Similarly, while Caledonia is invested in some familiar names, its top two holdings are Cobehold, a Belgian investment company, and Seven Investment Management, a boutique UK business. Both companies are unlisted.

As well as their focus on value, British Empire and Caledonia actively engage with companies in which they’re invested. Both trusts are also prudently managed, with the former having very modest gearing of 4% and the latter currently having a net cash position.

The post 2 investment trusts I’d buy to beat the FTSE 100 appeared first on The Twelfth Magpie.

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• Up 132% and surging, how is this FTSE 250 share STILL so cheap?

G A Chester has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

It has the single goal of achieving long-term capital growth at a rate higher than the total rate of return from the FTSE Actuaries All Share Index by investing in a geographically diversified portfolio. Not only has it met this goal, but it has nearly doubled its benchmark return over the past 10 years. 

According to the full-year 2017 annual report, over the past decade, Law Debenture has produced a total return for investors of 154%, compared to the FTSE Actuaries All-Share Index total return of 85% over the same period. The performance has also exceeded that of its global peer group, which produced a total return of 137% over the past decade. 

Multiple income streams

It derives its income not only from investments, but also professional services provided by the wider group, giving it an edge over the rest of its investment trust peers. It also means the company is globally diversified across business lines, so it should be able to continue to produce positive returns even if markets tank. 

However, despite this advantage, and the trust’s positive performance over the past decade, the shares currently trade at an 11% discount to the reported net asset value of 670p per share. As well as this discounted valuation, the shares support a dividend yield of 2.9%, which is less than the wider market, but considering the firm’s record of capital growth, I’m happy to overlook the lack of income. 

To add to the trust’s appeal, it only charges 0.43% per annum and there’s no performance fee levied on top. 

Private investing 

Law Debenture’s performance history, diversified income stream and low charges show clearly that the trust is working to achieve the best returns for investors, and the same can be said for Caledonia Investments (LSE: CLDN)

Caledonia is another business that invests outside of the public markets to achieve the best returns for investors. The group owns stakes in bingo operator Gala Bingo, pub company Liberation and recently raised £80.2m from the sale of the Sloane Club, a private members club in London. 

Its returns are not as high as those of Law Debenture, which can be blamed, to a certain extent, on its business model. Indeed, it usually takes longer to realise value from private investments rather than those in the public equity markets as there’s no daily price for the assets. It can take several years for asset sales to be crystallised. Nonetheless, the trust has still produced an annualised 13% over the past five years, beating the FTSE All-Share by 3% per annum over the same period. 

And investors can currently snap up shares in this private equity business on the cheap. The last reported net asset value was 3,311p, around 20% above the current market price. As well as this discount, the stock also supports a dividend yield of 2%.

The post Is this an unmissable opportunity to snap up these 2 global investment trusts? appeared first on The Twelfth Magpie.

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Rupert Hargreaves owns no share mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

Even during the recent financial crisis, when many companies were forced to cut their dividends or even stopped payouts altogether, many investment trusts managed to continue to increase their shareholder payouts. As such, there are a number of trusts with multi-decade-long track records of rising payouts today.

Why?

This is because investment trusts, unlike many open-ended funds, are not required to pay out all of the dividends generated by their underlying equity portfolios. They can hold back up to 15% of the dividend income they earn to supplement payments to shareholders in leaner years, smoothing out their dividend payments over the long term.

And following a rule change in 2012, investment trusts now have even more flexibility. They are even allowed to fund dividends out of capital returns, meaning that should their revenue reserves run out, they can sell some of their investments to make dividend payments.

Inflation-beating dividend growth

The £1bn-plus Bankers Investment Trust (LSE: BNKR) has one of the longest track records of consecutive years of dividend increases, with 50 years under its belt, according to data from the AIC.

Although shares in the investment trust yield just 2.2%, a major attraction of Bankers is its dividend growth. Not only does it plan to raise dividends each year, but it is targeting inflation-beating regular dividend growth of more than the rise in the Retail Price Index.

The trust also aims to achieve long-term asset growth in excess of the FTSE All-Share Index by means of its flexible investment approach and broadly diversified international equity portfolio. Big multinationals dominate its portfolio, with BP (1.8%), Apple (1.7%), British American Tobacco (1.5%), American Express (1.5%), and American Tower (1.4%) being its top five positions.

Performance figures for the past five years are encouraging as shares in the fund delivered a total return of 123%, easily beating its benchmark index performance of just 63%.

Diverse range of investments

Caledonia Investments (LSE: CLDN) became the latest trust to reach the impressive milestone of 50 years of consecutive dividend increases earlier this year.

Unlike Bankers, Caledonia is self-managed and owns a very diverse range of underlying investments. And one thing which really sets the it apart from many of its peers is that it invests around 27% of the value of its portfolio value in unquoted companies, which gives those trusting it with their cash exposure to a sector which is generally reserved for private equity investors.

Despite its strong dividend growth record, Caledonia trades at a rather big discount to its net asset value (NAV). Although this is partly due to the difficultly in valuing its unlisted equity investments, recent moves made by the fund manager should allay some of the concerns.

The fund recently sold down some of its unquoted investments, including a £197m stake in Park Holidays, in order to realise value for shareholders. And with the proceeds of the sale, it paid a special dividend of 100p per share in August, demonstrating that it is a shareholder-friendly fund.

At its current share price, Caledonia Investments currently trades at a 19% discount to NAV, with a regular dividend yield of 2%.

The post Looking for steady income? Consider these dividend investment trusts appeared first on The Twelfth Magpie.

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• Up 132% and surging, how is this FTSE 250 share STILL so cheap?

Jack Tang has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

I believe that a mix of investment trusts and stocks can be an ideal approach for long-term investors. This provides upside potential from successful stock picks, plus valuable diversification and stability from investment trusts.

50 years of dividend growth

FTSE 250-listed Caledonia Investments (LSE: CLDN) has increased its dividend every year for the last 50 years. Very few individual companies have a record like this.

The trust aims to provide a mix of long-term capital growth and a reliable income. To achieve this, Caledonia invests in a mix of listed and unlisted businesses in the UK and overseas. Among the trust’s UK investments are FTSE 100 firm British American Tobacco, and FTSE 250 soft drinks group AG Barr.

During the first half of this year, the trust’s net asset value per share climbed 1.1% to 3,298p. This means that the trust’s current share price of 2,723p represents an 18% discount to the value of its underlying assets.

Investment trusts often trade at a discount to net asset value, and this isn’t necessarily a buying signal. But in this case I believe it could be a good opportunity. Caledonia has outperformed the FTSE 100 by 18% over the last 10 years, and by 50% over the last five.

This market-beating performance suggests to me that the trust’s managers have successfully focused on top-performing sectors of the market, avoiding those which have underperformed.

Although the dividend yield of 2% is fairly modest, remember that the payout has increased every year for the last 50. I believe this is a stock you could tuck away and hold forever.

What about Glaxo?

I sold my shares of GlaxoSmithKline (LSE: GSK) earlier this year, as did fund manager Neil Woodford. And I was interested to see that Glaxo isn’t among the 1%+ holdings in Caledonia’s investments either.

The pharma group’s share price performance has fallen by 17% this year and is 4% lower than five years ago — a period during which the FTSE 100 has gained 27%.

The group has clung onto its reputation as a high-yield stock by maintaining its 80p per share dividend, which provides a tempting prospective yield of 6.1%. However, this payout hasn’t been increased since 2013. Such a long period without an increase is often a sign that a dividend is getting hard to afford.

One way to view Glaxo’s weak growth is that it does too many different things. By operating a consumer health business and a pharmaceutical division, there’s a risk that management isn’t focused closely enough on either business.

Several big fund managers have called for the group to consider splitting itself up, which could result in a higher overall valuation than at present.

So far, management have resisted these calls. But with profits expected to fall next year and net debt stubbornly high, chief executive Emma Walmsley may soon come under increased pressure.

In my view, there’s no rush to invest in Glaxo. I’d wait until the group strategy becomes clearer before considering a buy.

The post This FTSE 100-beating investment trust could be a better buy than GlaxoSmithKline plc appeared first on The Twelfth Magpie.

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• Up 132% and surging, how is this FTSE 250 share STILL so cheap?

Roland Head has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline. The Motley Fool UK has recommended AG Barr. 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.

It highlighted performance from its liver cancer treatment TheraSphere, and blood clot treatment device EKOS, and said that its antivenin CroFab has made a good start to the new snakebite season.

It advised that full-year guidance is unchanged. Chief executive Louise Makin commented: “We are on track to achieve double-digit product sales growth over the full financial year, driven by growth in our Interventional Medicine business.”

Near-term prospects

Given the in-line guidance, it’s no surprise BTG’s shares have barely moved on the day. Nevertheless, I believe the current price of 670p undervalues the business’s growth prospects, both in the near term and the longer term.

The forecast earnings consensus is 29.5p a share for the current year, 27.7% ahead of last year. This puts BTG on a price-to-earnings (P/E) ratio of 22.7 and a price-to-earnings growth (PEG) ratio of 0.8. The P/E is not excessive, while the PEG being below one indicates the stock is undervalued for the earnings it’s forecast to deliver. Near term, a 20% rise in the shares would take it closer to fair value

Long-term prospects

Looking beyond 2017/18, BTG appears well-placed to continue its strong growth. The company says it expects no let-up in double-digit product sales increases in the medium term.

This will be driven by a continuing strong performance from its interventional medicine business, aided by the anticipated opportunity from its varicose veins treatment Varithena, and its PneumRx Coil treatment for patients with severe emphysema, both of which are expected to reach important milestones this year.

In addition to fast-growing sales, the company expects to deliver an increasing gross margin, so profits should race higher at a great clip. With cash on the balance sheet (no debt) and fast-rising profits reinvested in the business (no dividend), I see BTG as a stock that could produce fantastic capital gains over the long term and I rate the shares a ‘buy’.

A different proposition

Aside from being in the FTSE 250, Caledonia Investments (LSE: CLDN) is a different proposition to BTG. For one thing, it’s an investment trust and for another, it targets both capital and income growth (it has delivered 50 consecutive years of dividend increases).

I believe this company’s shares are also undervalued (at 2,845p) and that its long-term prospects make this another stock that could help you retire early.

Hidden value

Caledonia holds many familiar stocks, such as Microsoft, Nestlé and British American Tobacco but it also has 30% of its portfolio in private companies, such as Gala Bingo and The Sloane Club, and a further 12% in private equity funds.

Caledonia’s last reported net asset value (NAV) per share was 3,403p at 30 June, so its shares are currently trading at a discount to NAV of 16.4%. This is attractive in its own right but the potential NAV is even higher, due to the private companies on the books. For example, Caledonia recently sold caravan park operator Park Holidays UK for net proceeds of £197m — a 47% premium to its carrying value of £134m.

Due to the discount to NAV and the potential additional ‘hidden value’ that could be realised over time, I rate Caledonia’s shares a ‘buy’.

The post 2 undervalued mid-caps that could help you retire early appeared first on The Twelfth Magpie.

More reading

• The £15bn defence splurge that could send UK shares soaring in July
• Up 446% in 12 months! What’s next for the Ceres Power share price?
• How much is needed in an ISA to unlock £1,220 of passive income a year?
• Forget meal deals! Here’s how £8 a day could be worth £357,000
• Up 132% and surging, how is this FTSE 250 share STILL so cheap?

G A Chester has no position in any shares mentioned. The Motley Fool UK has recommended BTG. 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.

Home and away banker

Few are more venerable than the £962m Bankers Investment Trust (LSE: BNKR), founded in 1888 and now managed by Janus Henderson Investors, which published results for the half-year ended 30 April this morning. Its diversified international portfolio has delivered a total return of 120% over five years, against 100% for its global benchmark, according to Trustnet.com. The board has also increased its dividend for 50 consecutive years – that’s right, 50 – and it currently yields a steady 2.2%.

Today’s results show net asset value (NAV) up 7% over six months, pretty much in line with the FTSE All-Share at 7.1%, and an even more impressive 31.3% over 12 months, outpacing the All-Share’s 20.1%. It has been helped by the post-Brexit plunge in the pound, which lifted the value of its global portfolio when translated into sterling.

Go West

Bankers’ increased weighting to North America has helped performance, although it has been scaling back its exposure on valuation concerns and fears about the impact of US interest rate hikes on investor sentiment. It is shifting asset allocation towards continental Europe and Asia, where valuation and yields are at a relative discount.

Its European holdings grew strongly over the period, rising 9.7%, followed by China at 9.3%, impressive given that the local index fell 4.4%. Japanese and Pacific exposure floundered. The board is projecting 6% dividend growth this year, helped by its international holdings, special dividends from UK companies and the positive translation of overseas dividends into sterling. Currently, it trades at a 5.5% discount to NAV and the annual charge is just 0.45%. You can buy this trust and largely forget about it, until you need retirement income.

North of the border

The £1.8bn Caledonia Investments (LSE: CLDN) is another golden oldie, tracing its history back to the shipping empire established by Sir Charles Cayzer in 1878. Today, the Cayzer family still owns just under half of the share capital. It is up 120% over five years and 28% over 12 months, Trustnet shows, and also boasts the proud record of increasing its dividend for 50 consecutive years. Currently, the yield is 1.93% and is trading at an even wider discount of 16.81% to NAV. However, it does have a relatively high ongoing charge of 1.14%.

The £843m Scottish Investment Trust (LSE: SCIN), founded in 1887 has offered 33 years of consecutive dividend growth and currently yields 1.67%. Its five-year total return is a robust 97%, and 26% over 12 months. The trust currently trades at a discount of 8.33% to NAV, with ongoing charges of just 0.59% a year.

Global reach

Bankers and Scottish have large UK and US exposures, which combined, account for roughly half of each trust’s global exposure, but this falls to just 10% for Caledonia. Together these three trusts could give you all the diversification you need.

The post These 3 global investment trusts could help you retire early appeared first on The Twelfth Magpie.

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• Forget meal deals! Here’s how £8 a day could be worth £357,000
• Up 132% and surging, how is this FTSE 250 share STILL so cheap?

Harvey Jones has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

Emerging markets

Templeton Emerging Markets (LSE: TEM) has had a great year thanks to the recovery in emerging market equities and the slump in the value of sterling. The trust’s shares are up 68% over the past 12-months, and even its discount to NAV has narrowed from a peak of above 20% to just 13%.

Today, valuations are not as cheap compared to a year ago, but emerging market equities still appear to be trading at a discount to developed markets. Commodity price volatility and Trump’s uncertain trade policy still pose big risks for emerging market investing. But the trust’s manager Carlos Hardenberg reckons developing economies are, in most cases, now more defensive and less vulnerable than they have been in the past.

Unquoted investments

Caledonia Investments (LSE: CLDN) has two interesting features. First, the trust is self managed, which means it employs an in-house investment fund manager, instead of hiring an external management company. This can allow it to take a long-term investment approach, which could give it an advantage over other investment companies.

Second, the trust invests a significant proportion of its portfolio value in unquoted companies — 42% at the end of January. This gives individual investors exposure to a sector which is generally difficult to get access to. The performance and valuations of unquoted companies tend to be less dependent on general stock market trends, which offers investors diversification benefits by reducing portfolio risk.

The trust has an impressive dividend track record, with 49 consecutive years of annual dividend increases under its belt. Shares in Caledonia Investments currently trade at a 16% discount to NAV and yield 1.9%, based on today’s share price of 2,770p.

Peer-to-peer lending

The Bank of England’s decision last August to reduce the base rate to 0.25% has piled even more downward pressure on returns offered by banks on cash balances. With interest rates so low, canny savers are having to look elsewhere to park their cash.

Investing in peer-to-peer lending can be a great way to boost your returns. But for investors who don’t want to go through the trouble of setting up their own account with a peer-to-peer lending platform, P2P Global Investments (LSE: P2P) offers an alternative route to gain access to the sector.

The investment trust, which focuses on buying peer-to-peer loans, offers investors exposure to the much larger US market, in addition to the UK, European and Australasian markets. This also adds diversification, which can help to reduce overall investment risk. In addition, the trust owns equity stakes in the lending platforms, which may offer investors potential capital gains on top of the steady income generated by its portfolio of loans.

Concerns about the lending practices of peer-to-peer platforms and their ability to withstand a more difficult economic environment have no doubt shaken confidence in the market. But with P2P Global Investments currently trading at a discount to NAV of 20%, I think these fears are overdone.

P2P Global Investments currently trades at a trailing dividend yield of 5.9%.

The post These investment trusts could help you to retire early appeared first on The Twelfth Magpie.

More reading

• The £15bn defence splurge that could send UK shares soaring in July
• Up 446% in 12 months! What’s next for the Ceres Power share price?
• How much is needed in an ISA to unlock £1,220 of passive income a year?
• Forget meal deals! Here’s how £8 a day could be worth £357,000
• Up 132% and surging, how is this FTSE 250 share STILL so cheap?

Jack Tang has a position in P2P Global Investments. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.