That said, a 62% share price jump over the past year isn’t anything to grumble about. Nvidia isn’t far below an all-time high of $236. 

However, one UK fund manager reckons the stock will head much higher. According to his analysis, Nvidia will top $500 in three years’ time. 

If so, that would mean a more than doubling from today’s price. Why’s he so bullish? 

All-in on AI

The person I’m talking about is Mark Sheppard, who manages Manchester & London Investment Trust (LSE:MNL). This £402m trust is somewhat under-the-radar because it’s not in the FTSE 100 or FTSE 250 (at least not yet). 

Manchester & London’s philosophy is to “invest in elite growth companies aligned with the next decade of progress”. But rather than taking a broad-based view of technological progress like Scottish Mortgage does, it has built an incredibly concentrated portfolio around the global AI revolution. 

It has done this for a number of reasons: 

• Paradigm shift: while the Industrial Revolution was about the “mechanisation of muscle”, AI is about the “mechanisation of the mind”.
• With approximately $55trn spent annually on human capital today, there’s a huge addressable market for agentic AI to become “a direct substitute for human labour”.
• AI is eating software. 
• AI models are getting smarter.
• Token use is accelerating while the cost of training and inference continues to drop.  
• Robotics and automation are advancing rapidly. 

AI capex to top $1trn

In particular, the trust has gone all-in on the infrastructure layer that supports the data centre buildout. Below, we can see that Nvidia made up a whopping 42% of assets in Q1. 

However, the trust pared back this position recently because it fears Nvidia’s Vera Rubin chips could be delayed due to an “over-specification” of the platform’s architecture. 

In plain English, there’s a risk that Nvidia tried to make its next-generation products a bit too complex, potentially handing a temporary advantage to some chip rivals. 

Despite this risk, Manchester & London remains bullish on the AI chipmaker, which still has a meaty 24% portfolio weighting.

And as mentioned, the manager sees the stock hitting $500 in three years as AI spending by hyperscalers Microsoft, Google, Meta and Amazon rips higher. 

Supporting this thesis is Morgan Stanley, which now forecasts hyperscaler spending of $1.1trn in 2027. Goldman Sachs also sees investments in AI agents and related infrastructure topping $1trn in the coming years.

Dividend-paying fund

Of course, longer term, we have no idea about AI hardware demand. There will surely be intense pressure for hyperscalers to cut capital expenditure in future (the spending cannot continue at this pace forever).

Still, Nvidia’s trading at 20 times next year’s forecast earnings, which isn’t exactly expensive. As things stand, the stock looks good value to me. 

What about Manchester & London? Is this growth trust worth considering? Well, its high-conviction approach certainly carries concentration risk (though there’s some portfolio hedging through options). 

But the trust also offers a 3.9% dividend yield and is trading at a 21% discount to underlying net assets. So it could be worth looking at if you’re wanting discounted exposure to AI and Nvidia in particular. 

Should you invest £5,000 in Nvidia right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Nvidia made the list?

Ben McPoland has positions in Axon Enterprise, Intuitive Surgical, Nvidia, Scottish Mortgage Investment Trust, and TSMC.

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It’s not the only FTSE trust that’s invested in this area of technology though. There’s another trust that’s invested in AI infrastructure stocks and it’s making a much bigger bet than Scottish Mortgage.

A tech-focused trust

The fund I want to highlight is the Manchester and London Investment Trust (LSE: MNL). This is a growth focused product designed to achieve capital appreciation (but it also offers income).

“We invest in elite growth companies aligned with the next decade of progress.”

Manchester and London Investment Trust

Looking at this trust’s holdings, there’s a clear theme and that’s the AI buildout. Here’s a look at the top 20 holdings in the portfolio as of the end of April:

On that list, there are 15 AI infrastructure names. In other words, 75% of the top 20 holdings are AI-related.

So by investing in this trust, which currently trades for a little over £10, an investor could get significant exposure to this area of the tech sector. They could also get exposure to some very exciting names.

“The Industrial Revolution, beginning at Cromford Mill in 1771, was about the mechanization of muscle. It replaced the physical limitations of the human arm with the tireless output of the machine. The AI era represents the second half of that journey: the mechanization of the mind.”

Manchester and London Investment Trust

Is there an investment opportunity?

Is the Manchester and London Investment Trust worth considering for a Stocks and Shares ISA or Self-Invested Personal Pension (SIPP)? I think so, assuming one has a growth focus (long term) and is comfortable with volatility.

I like the strategy here. The fund managers generally focus on tech companies that are large, profitable, and lower on the risk spectrum (unlike Scottish Mortgage which is happy to invest in unlisted, unprofitable businesses).

They also run their winners. This can really help performance.

As for the track record, it’s strong. Over the five-year period to the end of April, its share price rose 85%.

Meanwhile, it currently trades at a major discount to its net asset value. This means investors can get exposure to all these exciting AI names cheaply.

Additionally, it pays a solid level of income. Management intends to pay a minimum 40p dividend for the next five years, which translates to a yield of nearly 4%.

Risk vs reward

On the downside, it’s risky. One major risk is the large allocation to Nvidia. This has recently been reduced to around 24% of the portfolio, but that’s still a massive weighting and adds a lot of risk.

Another issue is that many of the other holdings have extremely high valuations. Lumentum Holdings (a designer and manufacturer of optical and photonic products), for example, currently has a price-to-earnings (P/E) ratio of about 120.

One other thing to be aware of is that ongoing charges are around 0.9% a year. That’s more than twice the fee that Scottish Mortgage charges.

Overall, I see a lot of potential to consider here. That said, given the strong focus on AI infrastructure names, I would think about keeping position sizes relatively small to reduce risk.

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In just the past month, Micron and AMD are up 77% and 88% respectively. So it’s no surprise to see them and Nvidia represent three of the four most-bought stocks on AJ Bell in the last 24 hours.

The reason, of course, is that there’s a memory chip shortage due to sky-high demand from the artificial intelligence (AI) infrastructure buildout. And due to this, the profits at these chip firms are going through the roof, with no sign of the shortage ending anytime soon.

For investors who are unsure which chip stock to buy, the following investment trust holds all the big names and is trading at a sizeable discount to its underlying net asset value (NAV).

All-in

Manchester & London Investment Trust (LSE:MNL) is a £362m-cap business that’s gone all-in on this AI theme. Led by manager Mark Sheppard, it’s made a big bet that almost all of the value will go towards AI hardware companies rather than software or anywhere else.

As such, it has had a massive portfolio weighting towards Nvidia (42% last month), Broadcom (11%) and TSMC (10.3%). These helped drive a 21.6% total return in April, thrashing the Nasdaq 100‘s 12.6%.

The trust’s three-year share price return is now an excellent 166%, while the 10-year NAV return is 449%. Since the management team took over in September 2015, the total return (with dividends reinvested) is around 17% a year.

AI-packed portfolio

We have positions in Memory, CPUs, GPUs, TPUs, Optics, Networking, AI Model Labs, Semi Fabrication, Semi Equipment, Energy, Power & Cooling, Financial Applications, Neo-Clouds, Robotics, and Space.

Manchester & London Investment Trust.

Zooming in a little closer on the portfolio, we see many companies that are creaming it today as hyperscalers such as Amazon, Meta, Google and Microsoft spend a fortune on data centres.

These are essentially the ‘picks and shovels’ of AI.

Concentration risk

Of course, an extremely high concentration like this adds significant risk. Were the market to turn bearish on the AI hardware theme, the trust would almost certainly underperform badly.

That said, management’s been making some portfolio adjustments recently that reduces this risk somewhat. For example, Nvidia has been trimmed and now represents ‘just’ 24.5% of assets.

The reason for the cut is that the trust believes Nvidia may experience some production delays with its next-generation Vera Rubin chip. However, with AI capital expenditure expected to top $1trn in 2027, it still sees a path to $500 for Nvidia stock within three years.

If so, that would be a more than doubling from today’s share price.

Rare combo

Is the stock worth considering for bullish AI investors? I think so, as Manchester & London’s currently trading at a 23% discount to NAV, thereby offering a cheaper and more diversified way to invest than buying the individual AI-related shares.

Plus, the trust intends to pay a minimum 40p dividend for the next five years. Based on the current share price, that translates into a dividend yield of 4.2%.

It’s a very rare combo to get massive AI growth exposure and decent passive income in a single stock.

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In other words, Nvidia’s recent $230bn rise is almost equal to the market value of the FTSE 100’s current biggest beast. Indeed, the AI computing giant is now worth more than the entire FTSE 100 combined, with over $1trn to spare. Let that sink in.

Due to its ascent, Nvidia has become tech royalty, and rightly so. These days, it’s hard to find a tech-focused fund or investment trust that doesn’t hold it. Not doing so risks underperformance, a bit like leaving Erling Haaland out of your fantasy football team.

The stock is up around 1,600% over five years!

Going all-in

Sticking with the fantasy football theme, imagine if you could have three Erling Haalands in your portfolio. Just think of all those extra juicy points you might get.

In some ways, that is what Manchester & London Investment Trust (LSE: MNL) has done. In its latest June 2025 factsheet, it had a 38.9% weighting to Nvidia. And 26% and 7.1% of net assets in Microsoft and Broadcom, respectively.

That means the trust has nearly three-quarters of its portfolio in just three tech stocks!

This trio are central to the AI revolution. Nvidia still dominates with its powerful GPUs, while Broadcom makes custom chips and networking hardware used in AI data centres. Microsoft owns part of ChatGPT and has rolled out AI features like Copilot to boost productivity.

This extreme concentration has produced tremendous results, though. In the three years to 1 July, Manchester & London Investment Trust’s net asset value surged 131.2%. The period coincides with the release of ChatGPT in November 2022, after which Nvidia’s share price took off like a rocket.

AI era

Of course, this massive concentration also adds risk. If Microsoft, Broadcom and/or Nvidia tank, then the trust would underperform badly.

Explaining this lack of portfolio diversification, lead manager Mark Sheppard wrote in September: “Sadly, we do believe the outstanding winners from the AI era may in time be counted on the fingers of two hands. So what are we meant to do? Diversify to dilute performance? Punish our winners for proving they are elite?”

Another risk here is a sudden slowdown in AI investments and spending by companies. This would be acutely felt by Nvidia, whose lofty price-to-earnings ratio of 55 is based on expectations of robust future growth.

However, the trust doesn’t see this happening. It says the AI era is in its infancy: “AI offers enormous promise and we think this could be one of the most exciting investment and research periods of the century.”

Should I invest?

To be honest, I admire this bold approach, and it has certainly delivered the goods for shareholders over the last three years.

However, I won’t be investing myself because I already own Nvidia shares. Increasing my exposure further would be reckless.

Investors looking at the trust have to be really bullish on Nvidia and the AI age. The shares are trading at a 12.8% discount to net asset value, but this is definitely in the high-risk, high-reward camp.

The post This UK investment trust has a 39% position in Nvidia stock! appeared first on The Twelfth Magpie.

If the portfolio is likely to perform like an index (or worse), what’s the point? I may as well just buy the index. It’d be cheaper, as there’s no professional stock-picking team that needs paying (often handsomely).

Looking at Manchester & London Investment Trust (LSE: MNL), however, nobody can accuse it of sitting on the fence. It’s probably the most concentrated technology portfolio I’ve come across.

Going all-in on the AI revolution

As of October, this trust had just over 74% of its portfolio in four stocks. At the top was chipmaker Nvidia, with a mammoth 37.7% weighting, followed by 23.7% of assets in Microsoft.

That’s 61.4% in just two stocks! In fact, the total weighting of the top 10 stocks is 98.7%.

Here they are:

As we can see, the portfolio is basically on all-in bet on the future of the technological revolution, particularly stocks related to artificial intelligence (AI).

Nvidia is the leading AI chipmaker, powering the whole revolution. One Wall Street analyst recently said it “will be the most important company to our civilisation over the next decade“.

Meanwhile, Microsoft operates the Azure cloud platform, as well as being a significant shareholder in OpenAI, the maker of ChatGPT.

Advanced Micro Devices is another leading chipmaker, competing with Nvidia, while Google (owned by Alphabet) is also a cloud giant and developer of advanced AI models.

The trust believes that the “era of AI is in its youth“, and that the ultimate big AI winners will be “counted on the fingers of two hands“. Hence the massive concentration.

A large discount

Manchester and London Investment Trust currently trades at a hefty 18.7% discount to net asset value (NAV). This suggests it’s significantly undervalued relative to its underlying portfolio.

However, in its October fact sheet, the trust said: “It seems inevitable that the inflows into UK Equities will wither further. As such valuations may drop and liquidity may dry up. For Investment Trusts, ceteris paribus, that means larger discounts…So please don’t email us asking why WE have allowed this to happen and what we are going to do about it.”

Personally, I think it’s a positive thing here that Mark Sheppard, the straight-talking lead fund manager, and his team don’t beat around the bush.

They’re honestly stating the risk that the NAV discount might not narrow because the buying of UK equities will “inevitably” remain weak. This isn’t so certain, but it’s a possibility.

Would I invest in the shares?

To invest in this trust, one has to be VERY bullish on Nvidia and Microsoft. Any weakness in those and the trust is likely to badly underperform. There’s huge concentration risk, with 80% of assets in five shares.

Conversely, the trust is likely to outperform if that duo perform strongly, which is what happened last year. In the 12 months to 31 July, the NAV total return per share was 55.4%, smashing the Nasdaq index’s 23.9%.

As things stand, I reckon my portfolio has enough exposure to tech/AI stocks. However, this could be one to consider for investors looking for a discounted, high-conviction way to play the AI revolution.

The post 74% of this FTSE fund is in Nvidia and these 3 top AI stocks! appeared first on The Twelfth Magpie.

However, in the long run such times can be the best periods in which to invest. It may be possible to obtain better value shares than usual, since most investors may be selling as opposed to buying.

With that in mind, here are two investment trusts that appear to offer good value for money. They could generate high total returns in the long run and may therefore be worth a closer look.

Strong performance

Reporting on Tuesday was Manchester & London Investment Trust (LSE: MNL). The first half of its financial year saw a total return to shareholders of 13.5%. This was significantly higher than the increase in its benchmark of 4.7%, with sector positioning driving its outperformance of 8.8%.

Technology investments contributed a 14.8% return, while consumer investments delivered 5.2% of total returns. The former was boosted by exposure to technology majors, with the industry enjoying generally positive performance as investor sentiment has remained buoyant. And with around 88% of its consumer investments return being driven by the company’s holding of Amazon shares, the trust has enjoyed significant success during the period when it comes to sector positioning.

Looking ahead, Manchester & London notes the recent volatility in global markets. However, with it having a strong track record versus its benchmark and trading at a 4% discount to net asset value (NAV), it seems to offer a worthwhile risk/reward ratio for the long term.

Long-term prospects

Also offering impressive long-term growth prospects is the Schroder UK Growth (LSE: SDU) investment trust. The company has experienced a period of underperformance versus the UK All Companies benchmark, with its rise of 1.6% in the last year representing an underperformance of 3.7%. However, the company is invested in a number of stocks which could offer strong growth after challenging periods.

For example, the five biggest holdings of the trust are Shell, Standard Chartered, BP, Tesco and Lloyds. All five companies have experienced difficulties in recent years, but now appear to offer good value for money as well as clear turnaround potential. Therefore, they could provide a strong catalyst when it comes to the future performance of the trust – especially since they make up around 31% of the total portfolio.

Since the Schroder UK Growth investment trust currently trades at a discount to its NAV of around 11%, it appears to offer a wide margin of safety. While potentially volatile in the near term as stock markets could experience further disruption, in the long run it could deliver impressive total returns. With a dividend yield of 3.4%, it may also offer an inflation-beating income return over the medium term.  

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Other investment funds, like unit trusts where we hand over our cash to be managed for us, often have to satisfy their owners foremost, so there’s an inevitable conflict with customers’ interest there.

But investment trusts are different in that, when you invest, you don’t hand over cash to the company, you buy shares in the company itself – so you are one of the owners.

There’s an additional advantage in that investment trusts are allowed to smooth their dividend payments over multiple years, which can be great for those seeking regular income.

Global blue chips

The Manchester & London Investment Trust (LSE: MNL) has had a few erratic years, and its dividends have actually been fluctuating.

But the trust is aimed at “achieving capital appreciation, together with a reasonable level of income“, and the share price has been storming ahead. At 393p, it’s overtaken the FTSE 100 very nicely in the past three years, with 2017 being exceptionally strong so far.

Its investments are targeted mainly at blue-chip shares in developed markets which are growth orientated, and it holds a portfolio of only 20 to 40 securities. That, together with recent global economic conditions, seems likely to make it more volatile than others. But at the same time, I prefer a focused portfolio as the best way to long-term growth.

The year to July 2017 saw a total return per share of 92.4p, sharply up 48% from last year’s 62.5p. On top of that, net asset value (NAV) per share rose by 25% to 429p.

Revenue return per share did drop by 41% to 7.9p and the total dividend fell 33% to 9p. But it’s a relatively small proportion of overall returns, and it still provided a yield of 2.3%.

For a trust focussing on growth rather than maximum income, that looks like a very good performance to me, and the shares are now trading on a discount to NAV of 8.4%.

Closer to home

Big Yellow Group (LSE: BYG) is a real-estate investment trust (REIT) which invests in storage facilities in the UK, and has been raking in the cash for years. 

It definitely looks better suited to those seeking regular and rising dividend income, with the annual payment having climbed from 11p per share for the year ended March 2013 to 27.6p by 2017. That’s a 2.5-fold increase in just four years, and well ahead of inflation. And forecasts for the next two year suggest a further 19% hike by March 2019.

On top of that, the share price has also been storming ahead of the FTSE 100, and at 803p as I write, it’s put on 140% over the past five years.

The firm’s first-quarter trading update in July showed modest but steady progress, with occupancy rates growing to 82% (from 78% at the same stage a year previously). Big Yellow’s target rate of 85% looks to be in reach, and that would be impressive.

Finding new sites seems to be the company’s biggest problem at the moment, but that doesn’t seem to me to be such a bad one – it certainly boosts confidence in demand for its services.

Full-year results will be with us on 1 November, and will be worth looking out for.

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