Investment trusts have changed little in the past 100 years, and in my opinion, this is their greatest advantage because it fosters a long-term mindset among investment managers. For example, Witan Investment Trust (LSE: WTAN) was admitted to the primary market in 1950 and ever since, management has worked to achieve the best returns for investors. 

Retirement planning 

Witan went public in October 1950, but the company has been in operation since 1909. Over this 109 year history, the firm has created hundreds of millions of pounds in value for investors. Over the last 10 years alone, shares in the trust have returned 231%, compared to the benchmark return of just 145% (as Witan invests all over the world, its benchmark is a composite of several global indices). 

Investment success has helped Witan outperform. Dividend growth and share buybacks have also helped. The company recently announced (July 13) that management has been granted the authority to buy back 26.7m shares, approximately 13% of the total number of shares in issue. On top of this, Witan is a dividend aristocrat. The firm has increased its dividend annually for the past 43 years. 

Today, it unveiled yet more good news for investors. Its half-year results, for the six months to the end of June, show a 1.11% increase in net asset value, slightly above the benchmark return of 1.06%. Net asset value increased 6.5% year-on-year to 1,110p. 

Based on the above figures, shares in the trust are currently trading at a slight premium to net asset value. Still, I believe it is worth paying a premium to invest alongside Witan’s investment managers, who have shown over the past few years that they are capable of beating the market. The dividend yield stands at 2%. 

Small-cap growth 

If like me, you already own Witan, then another trust worth considering for your investment portfolio might be F&C Global Smaller Companies (LSE: FCS). 

F&C invests directly in smaller companies and buys stakes in other top-rated funds that invest in small-caps around the world. Today, F&C’s top holding is the Eastspring Investments Japan Smaller Companies fund, which accounts for 5% of net asset value. 

In my view, having some exposure to small-caps is essential if you want your portfolio to make money. According to a study by wealth manager Schroders, global small-caps have returned almost three times as much as large companies over the last 16 years.

By including F&C in your portfolio, you can gain exposure to this trend in just one click. The firm has global exposure to small caps, 40% of assets are focused and the remainder is spread across the UK, Europe and internationally. 

The shares currently trade at a slight discount to net asset value of -1.3% and the annual management charge is 0.8%. A dividend yield of 1% is on offer. 

Overall, I believe F&C is the perfect instrument to add to your portfolio if you want to benefit from small-cap growth. 

The post Have £1,000 to invest? These market-beating investment trusts could help you retire early appeared first on The Twelfth Magpie.

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Rupert Hargreaves owns shares in the Witan Investment Trust. 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.

With limited investment capital, the transaction costs of investing in a large number of stocks can really rack up, hurting your long-term returns. Instead, using investment trusts to access the market may be a better option. Investment trusts enable you to pool your money together with other investors, making them an easy and relatively inexpensive way to get invested in a diversified range of markets.

Global exposure

One example which seems like a perfect choice for novice investors seeking broad exposure across global equity markets is the Witan Investment Trust (LSE: WTAN).

The fund holds a well-diversified portfolio of well over 300 stocks, which spread outs its investment risk across a wide range of industries and different geographies. Additionally, no single investment currently accounts for more than 2% of its total assets, and as such, the fund’s performance does not largely hinge on a small number of stocks.

Witan is positioned strongly towards UK and European equity markets, which represent 34% and 23% of its total assets, respectively. With equity markets in the UK and Europe trading at a relative discount to the rest of the world, this puts the fund in a strong position to benefit from a possible convergence in valuations. It could also mean that its portfolio would be less vulnerable when the long-awaited correction comes.

Past performance

Witan’s past performance compares favourably against its composite benchmark, which consists of the FTSE All-Share Index and other regional and international equity indexes. Over the past five years, the trust delivered a NAV total return of 75%, which enabled it to easily beat its benchmark performance of 58% over the same period.

What’s more, the trust has an excellent dividend track record, having increased the dividend it pays to investors for 43 consecutive years. At the time of writing, shares in the trust yield 2%.

Smaller companies

For something more adventurous, F&C Global Smaller Companies (LSE: FCS) may be worth a closer look. The investment trust seeks to deliver superior long-term capital growth by investing in faster growing small-cap companies.

Although smaller companies may be inherently more risky than larger companies, investors are often well rewarded for taking the added risks. Smaller companies have historically delivered stronger relative returns over the long term, particularly during bull markets.

Global remit

Like the Witan Investment Trust, it too has a global investment remit and is geographically diversified. The fund is most exposed to North America, which accounts for 38% of its total assets. It has a further 27% invested in the UK, and 12% in the rest of Europe.

A look at the portfolio shows the trust is itself invested in other small-cap funds, and it does this to gain exposure to Japanese and Asian small-caps as its own dedicated investment team is primarily focused on companies in the UK, Europe and North America.

The long-term performance of the trust is solid, with a total NAV return of 82% over the past five years. 

The post My top investment trust buys for a starter portfolio appeared first on The Twelfth Magpie.

More reading

• 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
• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?

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.