Investment trusts for first-timers

Nick Britton, Research Director of the Association of Investment Companies (AIC), said: “Investment trusts offer diversified portfolios and many have long records of preserving and growing the value of people’s savings. Many trusts make great first-time investments whether you’re looking for income, growth or a mixture of the two.

“According to the Bank of England, £275 billion is currently sitting in deposit accounts that pay no interest – and therefore losing its real value over time. While keeping some money in cash is important, longer-term savers should consider accessing the compounding power of the stock market, and investment trusts are a great way to start.”

Suggestions for ‘first-time trusts’ can be found below from Emma Wall, Head of Platform Investments at Hargreaves Lansdown; Paul Chilver, Director and Financial Planning Manager at Birkett Long IFA; Laith Khalaf, Head of Investment Analysis at AJ Bell; Philippa Maffioli, Senior Adviser at Blyth Richmond Investment Managers and Kyle Caldwell, Funds and Investment Education Editor at interactive investor.

The suggested trusts are split into three types: UK equities, global equities, and ‘capital preservation’ investment trusts that use a mixture of different assets to try to deliver a smoother return than pure equity trusts.

UK TRUSTS

City of London Investment Trust

Emma Wall, Head of Platform Investments at Hargreaves Lansdown, said: “City of London is an AIC dividend hero, having increased its dividend for 59 years in a row. Manager Job Curtis has had his hand on the tiller for 34 of those, and this depth of experience has served investors well through a variety of market conditions.

“Curtis favours good quality, well managed companies, bought at reasonable share prices. This sensible, no-nonsense approach makes it a good choice for first-time investors. Those seeking growth should simply choose to reinvest the quarterly dividends.”

Paul Chilver, Director and Financial Planning Manager at Birkett Long IFA, said: “A new investor may want to consider an investment trust with a long track record and a manager who has been at the helm through many economic cycles. The City of London Investment Trust ticks both these boxes with the trust being over 100 years old. The manager, Job Curtis, can’t quite match this but has been manager for an impressive 30 plus years.

“The trust invests in well known FTSE 100 companies which may also reassure a new investor.”

Fidelity Special Values

Laith Khalaf, Head of Investment Analysis at AJ Bell, said: “If you’re a first-time investor, you probably want a safe pair of hands guiding your investment. With 13 years at the helm of this trust, Alex Wright can legitimately claim that mantle.

“The trust is well diversified across 80 to 120 stocks and invests across companies of all sizes on the London Stock Exchange. The UK stock market has performed very well this year, but it’s been led by the big blue chips of the FTSE 100. If small and mid caps start to motor, this trust stands to benefit more than most broad UK stock market funds, including index trackers.”

GLOBAL TRUSTS

Scottish American Investment Company

Emma Wall, Head of Platform Investments at Hargreaves Lansdown, said: “This is a great one-stop-shop trust for those with an appetite for risk, investing predominantly in global equities but with a small allocation to bonds, property and infrastructure. Managers James Dow and Ross Mathison look for companies that demonstrate two key traits – a dependable income stream and the potential for above-inflation profit growth. They also need to show resilience through the economic cycle. Scottish American is an AIC dividend hero, having increased payouts for more than 50 years.”

F&C Investment Trust

Philippa Maffioli, Senior Adviser at Blyth Richmond Investment Managers, said: “F&C Investment Trust is an excellent core holding for first-time investors. It provides access to a very broad and well managed portfolio, delivering steady long-term capital growth alongside an attractive dividend income. With its long history and proven track record, F&C offers a reassuring starting point for those looking to build their financial portfolios.”

Murray International Trust

Philippa Maffioli, Senior Adviser at Blyth Richmond Investment Managers, said: “Murray International offers a globally diversified portfolio designed to deliver both capital growth and reliable dividend income. The trust focuses on achieving long-term returns that outpace inflation, giving investors a strong foundation for the future.”

Alliance Witan

Kyle Caldwell, Funds and Investment Education Editor at interactive investor, said: “For investors prepared to take on a bit more risk, Alliance Witan offers a well diversified portfolio of global shares. It outsources stock picking to several external fund managers. Most of those are asked to pick 20 of their best stock ideas. The result is a portfolio of over 200 stocks, covering a wide range of countries and sectors.

“How much investment risk you are willing to stomach – known as risk appetite – is a personal decision. Among the things to think about are what level of risk you can tolerate emotionally and relative to your financial circumstances and time horizon.

Brunner Investment Trust

Philippa Maffioli, Senior Adviser at Blyth Richmond Investment Managers, said: “Brunner Investment Trust combines a global equity portfolio with a clear focus on long-term growth. It has a strong track record of navigating different market conditions and offers a modest but steady dividend. Under the experienced management of Julian Bishop and his team, Brunner has demonstrated resilience and consistency, making it a solid option for those taking their first steps into investing.”

CAPITAL PRESERVATION TRUSTS

Personal Assets Trust

Paul Chilver, Director and Financial Planning Manager at Birkett Long IFA, was one of three investment experts out of our five who mentioned this trust. He said: “For those thinking about investing in investment trusts for the first time, in particular if moving from a cash ISA, a ‘capital preservation’ trust such as Personal Assets Trust may be worth considering. It has a long track record in protecting investors’ money during periods of stock market volatility and currently has high exposure to government bonds and gold.”

Laith Khalaf, Head of Investment Analysis at AJ Bell, said: “Personal Assets Trust invests in the shares of high-quality companies, but balances this with holdings in government bonds, cash and gold. The result is a mixed asset portfolio which is less volatile than the stock market but still aims to deliver capital growth over the long term.”

Emma Wall, Head of Platform Investments at Hargreaves Lansdown, said: “For cautious first-time investors, you want to find a manager who prioritises capital preservation and long-term total returns. Charlotte Yonge and Sebastian Lyon do just that with Personal Assets. Allocations to gilts and gold help smooth returns, holding up better in a down market, and a robust discount control mechanism helps with price volatility. As well as a good first-time option, this trust can provide ballast to more established equity-biased portfolios.”

Capital Gearing Trust

Kyle Caldwell, Funds and Investment Education Editor at interactive investor, said: “For those dipping their toes into the stock market for the first time, seeking out funds that provide plenty of diversification is a sensible start as it helps to keep a lid on risk.

“The good news is that investors can manage risk, including by focusing on funds on the lower-risk end of the scale, such as wealth preservation strategies. Among the options is Capital Gearing, which has a third of its portfolio in risk assets (equities), a third in short-dated government bonds and corporate bonds, and a third in index-linked bonds. It takes a similar approach to Personal Assets Trust – either would be a good choice.”

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Notes to editors

1. Five- and ten-year share price total returns are to 31/07/25. Source: theaic.co.uk / Morningstar.
2. The Association of Investment Companies (AIC) represents a broad range of investment trusts and VCTs, collectively known as investment companies. The AIC’s vision is for closed-ended investment companies to be understood and considered by every investor. The AIC has 295 members and the industry has total assets of approximately £262 billion.
3. For more information about the AIC and investment trusts, visit the AIC’s website.
4. Disclaimer: The information contained in this press release does not constitute investment advice or personal recommendation and it is not an invitation or inducement to engage in investment activity. You should seek independent financial and, if appropriate, legal advice as to the suitability of any investment decision. Past performance is not a guide to future performance. The value of investment company shares, and the income from them, can fall as well as rise. You may not get back the full amount invested and, in some cases, nothing at all.
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