2 investment trusts to buy with £2,000

This Fool explains why he’d buy these two investment trusts for a portfolio of £2k based on their income and growth prospects.

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If I wanted to invest £2,000 today in the stock market, I would pick investment trusts.

Investment trusts are a great way to invest in the market quickly. They are actively managed investment companies that own portfolios of stocks.

This means it’s easy to buy one company and get exposure to a whole basket of different stocks spread across sectors and industries.

Buying trusts also enables investors to buy exposure to sectors or regions they may not necessarily be able to invest in themselves. 

Investment trusts to buy 

I think one stock market sector that will do well over the next few decades no matter what happens to the global economy is healthcare. According to current projections, global healthcare spending could hit $10trn by 2022, up from around $8trn in 2018. 

The US is by far the world’s largest market for healthcare spending, and this is where some of the best businesses are located. That’s why I’d buy the Worldwide Healthcare Trust (LSE: WWH) for a small portfolio of investment trusts. I already own this stock in my portfolio for the same reasons.  

This trust, as its name suggests, can invest all over the world. US stocks make up two-thirds of the portfolio, and 11% is in Chinese equities. The rest is spread around the world. The largest holding is Boston Scientific.

As well as its international diversification, the trust is also managed by a specialist healthcare investment manager, which can bring levels of experience to the table that I could not. 

The international diversification and specialist experience are the two reasons I would buy this for my portfolio of investment trusts. 

This approach might not be suitable for all investors because it requires a level of trust in the investment manager. If the investment manager makes poor investment decisions, the returns of the trust could suffer. Some investors may not be comfortable with this approach. 

Global growth 

The other firm I’d buy for my portfolio of investment trusts is JPMorgan Global Growth and Income (LSE: JGGI). 

Once again, this is a trust I already own and would happily buy more of.

JPMorgan’s offering invests in stocks around the world that its managers believe can generate outstanding performance. Its track record of finding these businesses is pretty good. Over the past five years, the stock has returned 118%. Its top holding at present is Google’s parent company, Alphabet

However, it does command a performance fee. Its managers are paid a performance fee of 15% if the trust outperforms its benchmark index. High-performance fees can eat away at returns, so many investors might not be comfortable owning the trust as a result. 

Still, I’m happy to pay managers a performance fee if they continue to achieve outstanding returns. As well as capital growth, the stock also supports a dividend yield of 3.2% at present. That’s why I’d buy this stock for my portfolio of investment trusts with £2k today. 

RISK WARNING: should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice. The Motley Fool believes in building wealth through long-term investing and so we do not promote or encourage high-risk activities including day trading, CFDs, spread betting, cryptocurrencies, and forex. Where we promote an affiliate partner’s brokerage products, these are focused on the trading of readily releasable securities.

Rupert Hargreaves owns shares in the Worldwide Healthcare Trust and JPMorgan Global Growth & Income plc. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool UK owns shares of and has recommended Alphabet (A shares) and Alphabet (C shares). 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.

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