For example, over the past decade, shares in the trust have produced a return of 271%, compared to a gain of 178% for its benchmark (a combination of global indexes). 

I reckon this performance is set to continue for the foreseeable future as the team at Witan continues to seek out growing businesses around the world. 

Indeed, one of the reasons why this business stands out to me over other trusts is its record of picking out-performers both at home and overseas, which gives investors plenty of diversification as we head towards the uncertainties of Brexit. UK investments make up just 35% of assets. North American investments account for 24%, and European stocks make up 20% of the portfolio. 

Dividend record 

Another reason why I’m attracted to the firm is its record of dividend growth. Every year for the past 43, Witan has consistently paid and increased its dividend. 

For 2018, the company is on track to distribute 23p per share according to my figures, indicating a dividend yield of 1.9% is on offer. This might not seem like much, but in my view, the record of dividend growth more than makes up for the below-market yield. 

Market-beating income

Alongside Witan, I’m also interested in River and Mercantile Group (LSE: RIV). 

This small-cap investment management firm has more than doubled profits over the past five years as revenues have increased at a compound annual growth rate of 20% since 2013. 

For the three months ending 30 September 2018, according to a trading update published by the firm today, “strong net inflows” resulted in an increase of 3.3% in fee-earning assets under management. Market volatility has impacted demand for the group’s services, but management is confident that the business is “highly diversified and therefore the effect on our overall numbers will likely be more muted than it is for others.“

This cautious statement seems to suggest that investors should expect River’s earnings growth to slow for 2018, which appears unavoidable — the company can’t control the markets after all. Analysts had been expecting the firm to report earnings per share growth of 21% for fiscal 2019. Unless there’s substantial improvement in its fortunes for the rest of the year, River is now unlikely to hit this target. 

Still, what management can control is the firm’s dividend payout. And City analysts are expecting a big jump in the payout for fiscal 2019 to 18.1p, giving a dividend yield of 6.2% on current prices. So, even though earnings growth might be about to come off the boil, investors will be paid to wait for a recovery. 

Overall, I would rate River a ‘buy’ for its dividend and recovery potential. When combined with Witan in a retirement portfolio, I think the combination of income and growth could turbocharge your investment returns. 

The post Why I’d pick this investment trust to help double my State Pension 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.

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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• 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?

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.

Top trusts 

First up is the British Empire Trust (LSE: BTEM). I believe this is one of the best investment trusts today that you can buy to protect your portfolio from market volatility. 

The trust is unlike many of its peers because it doesn’t pick shares to try and beat the market. Instead, the firm invests in other investment vehicles that are trading at what it believes to be a substantial discount to their full intrinsic value. In some cases, management then works with these undervalued instruments to help unlock value for shareholders and investors.

This approach has yielded fantastic results for investors over the past few decades. British Empire has been around in one form or another since 1889, and according to the most recent performance data (30 June 1985 to 30 April 2018), the total return net of fees to investors is 12.1% per annum.

Unfortunately, if you are looking for dividend income, this might not be the trust for you. The shares only yield 1.6%, according to the firm’s website. Still, the capital returns produced over the past four decades more than make up for this lack of income in my opinion.

The power of compounding

My next pick, Witan Investment Trust (LSE: WTAN) is, in my view, appealing for many of the same reasons. 

Founded in 1909, this company has achieved 43 years of consecutive dividend growth with the payout more than doubling over the past 10 years. At the time of writing the shares support a dividend yield of 2.1%.

Witan does invest in single companies, but the trust has a global investment mandate and invests wherever there is value to be found. Right now, only a third of the portfolio is invested in the UK while 22% is devoted to European equities, and 21% is invested in North American equities. The rest is placed across the world with the focus on Asia Pacific.

And the team at Witan has more than proved that it knows what its doing over the past decade. Since 2008 shares in the trust have returned 11.5% per annum.

It is this double-digit annual return that has really got me excited about the prospects for my retirement portfolio. According to my calculations, thanks to the magic of compounding, if Witan and British Empire continue to produce annual returns of between 11.5% and 12.1%, I only need to invest £250 a month to be able to retire with a pension pot of £1.5m in 35 years time. 

Of course, this assumes that the bull market we are currently in continues on for the next three decades, which is unlikely in my opinion. 

That being said, with four decades of over-performance behind it, I’m confident that British Empire at least can continue to produce double-digit returns for investors every year, no matter what the market has in store for us.

The post 2 FTSE 250 investment trusts I plan to retire on 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?

Rupert Hargreaves owns shares in the British Empire Trust and 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.

The Witan Investment Trust (LSE: WTAN) is a great example. It owns a broad selection of assets, which has helped it generate a steady return for investors over the past 10 years. Indeed, over the past decade, the trust has produced a return of 127%, outperforming the FTSE 100 by 109% excluding dividends. 

Strength in diversification 

Witan’s strength lies in its diversification. The trust invests in markets across the globe, seeking out the best deals wherever they are. At the end of November, the top three holdings were private equity fund Princes Private Equity, investment bank JP Morgan and Syncona, another investment trust with a focus on life sciences. 

Witan is positioned to produce a positive performance in any market environment, which is why I believe that the trust is an excellent buy for 2018. If markets around the world continue to rally throughout 2018, then the shares will rally as well. However, if the current bull market runs out of steam, then Witan is diversified enough to be able to continue to outperform in a turbulent environment. The shares currently support a dividend yield of 1.9%, and the annual management charge is 0.75%. 

Tech boom 

Another one that I believe is set to outperform in the year ahead is the Scottish Mortgage Investment Trust (LSE: SMT). Unlike Witan, which is well diversified across markets and sectors, Scottish Mortgage is heavily invested in tech stocks. Specifically, retail giant Amazon and Chinese internet giants Tencent and Alibaba. Together these three holdings account for 22.2% of the fund.   

Scottish Mortage’s manager James Anderson believes that these companies will continue to dominate not just the online retail space, but the internet in general and many City analysts seem to agree. Amazon’s rise over the past decade has been meteoric, and despite its growth so far, the group still has a long runway for growth in front of it. And the same can be said for Tencent and Alibaba, which will both continue to grow as China’s economy continues to expand. 

If you’re looking for a way to play the global tech boom, then Scottish Mortage seems as if it is the right company for you. Over the past five years, this trust has managed to pick the best tech stocks in the world, and shareholders have reaped the rewards as a result. 

Since the end of 2013, it has produced a total return of 209%, outperforming the Nasdaq tech index by 79% over the same period. Thanks to this performance, the shares trade at a slight premium to net asset value of approximately 1% and yields just under 0.7%. The annual management charge is 0.44%. 

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Rupert Hargreaves owns no share mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK owns shares of and has recommended Amazon. 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 and growth 

It offers the perfect blend of income and growth for investors. At the time of writing, its shares support a dividend yield of 5.1% and over the past five years have produced a return of 65%, excluding dividends. 

Today, the company reported its results for the first half ending 31 July, revealing yet another impressive performance. For the first half Merchants’ total net asset value grew by 9.9% and management increased the dividend payout by 2.5% to 12.3p 

I believe Merchants is one of the best and simplest investment trusts around. The company invests in a portfolio of high-yield UK shares, which generate dividend income. This revenue funds the investment trust’s dividend. To help boost returns, it can borrow money and at the end of the first half, long-term debt was £76m. During the first half, this borrowing had a gross beneficial effect on performance of 2.6%, or a net effect of 1.5% after the 0.9% cost of finance and the movement in the market value of debt of -0.2%. 

All in all, I believe that if you’re looking for a low-cost income fund, you can’t go wrong with Merchants. The firm’s portfolio is populated with UK dividend champions such as Royal Dutch Shell, GlaxoSmithKline, and HSBC. Meanwhile, the management fee is a relatively low 0.47%. 

At the time of writing, the shares trade at a 6.1% discount to net asset value, indicating that at this moment, you can buy the trust and its portfolio of high dividend stocks below market value. I believe that this is a highly attractive opportunity. 

Well diversified 

Witan Investment Trust (LSE: WTAN) is much more complicated than the smaller trust. Unlike its income-focused peer, Witan’s management team targets the best returns in all market environments. The portfolio is well diversified with the top five holdings including shareholdings in two private equity firms, a mining fund, the London Stock Exchange and US banking giant JP Morgan. This diversified approach has helped the trust produce a return of 130% for investors, excluding dividends, over the past five years. 

When it comes to income, Witan offers a token dividend yield of 2.01%. However, this payout, coupled with the firm’s strong capital growth over the previous five years, is attractive. I believe that there’s also room for dividend appreciation.

With an annual management fee of 0.75%, Witan is relatively expensive and is currently trading at a tiny discount to net asset value of 1.2%. Still, even though these metrics are disappointing, the trust’s capital growth and diversification more than make up for the high fees in my view. 

The bottom line 

All in all, if you’re looking for two ready-made income and growth portfolios, then it looks as if Witan and Merchants tick all the boxes as funds that will allow you to sit back, relax and watch your wealth grow. 

The post 2 income and growth investment trusts that could help you achieve financial independence 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?

Rupert Hargreaves owns shares in GlaxoSmithKline and Royal Dutch Shell. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline. The Motley Fool UK has recommended HSBC Holdings and Royal Dutch Shell B. 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.