There are many trusts available to invest in. And many specialise in different areas. However, right now I have my eye on F&C Investment Trust (LSE: FCIT). Here’s why.

The lowdown

So, what exactly does this trust do? And how has it performed across this difficult year?

F&C invests in over 400 companies in 35 countries with the aim “to secure long-term growth in capital and income through a policy of investing primarily in an internationally diversified portfolio of publicly listed equities, as well as unlisted securities and private equity.”

The trust is run by fund manager Paul Niven, who’s been at the helm since 2014. Overall, it manages around £5bn worth of assets.

It’s been a tough year for the stock as it’s fallen around 9% year to date. This is largely due to the bleak economic environment. And with inflation on the charge across the globe, investor sentiment has been dented. The FTSE 100 is down 3% year to date. And in the US, the S&P 500 has plummeted by 18%.

Why I’d buy

With all of this, why would I buy the trust?

My main attraction is the diversification mentioned above. It holds hundreds of companies, including names like Microsoft, Amazon, and AstraZeneca.

By owning the stock, what I essentially do is offset my risk. This is because with a single investment I own a small slither of all of these companies. In the volatile times we’re experiencing, this is important for me.

What’s also an added bonus is the fact that its investment strategy aligns with mine. By this, I mean it buys for the long term. And as a Fool, I believe this is the best way to invest. While past returns are no indication of future performance, the last decade has seen the trust return 170% to its shareholders.

I also like the stock due to its stable nature. The trust is the oldest in the world, meanings it’s survived multiple crises. On top of this, it has increased its dividend payment for the last 51 years, highlighting its consistency.

The risks

With this said, there are risks with F&C.

They largely exist through its exposure to emerging markets, which make up 7.6% of its asset allocation. While these markets can offer great opportunities, they can also be volatile. And given the current economic conditions, these markets could suffer in the near future.

However, as mentioned above, this short-term volatility is of little concern to me. With a long-term approach, issues should be ironed out. In the long run, I back the trust to discover the opportunities that exist within emerging markets. I also like the diversification it could provide my portfolio with. While I don’t have the spare cash right now, if I did, I’d happily buy its shares today.

I’ve long been an advocate for investment trusts. So, trading at a discounted price, should I be adding the trust’s shares to my portfolio?

Diversified portfolio

My main attraction to this stock is the diversification it offers. With over £5bn in assets under management, it invests in over 400 companies in 35 countries. Its top holdings include the likes of Microsoft, UnitedHealth, and Taiwan Semiconductor Manufacturing Company. And this diversity offsets potential risk for my portfolio. In volatile periods, like what we’re currently experiencing, I see this as vital.

I’m also attracted to the stock because of its investment style. “The objective of the trust is to secure long-term growth in capital and income,” we’re told. And this long-term approach nullifies any shorter-term headwinds that the investment trust may face.

Being the oldest such trust in the world, F&C has also stood the test of time. It has survived wars, along with the recent pandemic. And while previous returns are no indication of future performance, the last decade has seen it return over 200% to patient shareholders. When considering adding the FTSE 250 stock to my portfolio, this is a tempting factor.

F&C Investment Trust also has a strong track record of increasing dividend payments. It announced this year that it would be hiking dividends for the 51st consecutive year. While its current dividend yield of 1.57% is far from mouth-watering, this consistency is nothing to brush aside.

F&C risks

There are risks, however. The trust could be pegged back by its relatively large exposure to emerging markets. This asset allocation makes up 8.3% of its portfolio. While these markets offer attractive returns, they can be volatile at times. And with spiking inflation and the lingering threat of Covid, these markets could suffer in the months ahead. For example, Brazil’s inflation rate sat just below 12% in June.

Yet this is a short-term concern. And as an investor who buys stocks with a long-term outlook, I think emerging markets contain an abundance of opportunities that could boost potential returns.

Compared to its peers, F&C Investment Trust has posted a relatively stronger performance in 2022. Despite its 12% fall, Scottish Mortgage Investment Trust has fallen 40% this year. Monks Investment Trust has also seen its share price pinned back nearly 30%. This once again highlights F&C’s resilience.

Why I’m buying

Despite the challenges the trust may face in the near future, I see the stock as a solid addition to my portfolio. Its diversification is key for me. And the long-term approach adopted by Paul Niven and his fellow fund managers leads me to believe the trust could provide my portfolio with some healthy returns over the long run.

I have always been an advocate of investment trusts, as they offer exposure to a variety of sectors in a single investment. As such, here’s why I would buy shares today.

The portfolio

The main reason I like F&C is because of its diverse portfolio. With nearly £6bn in assets under management, investing in over 400 companies globally, the trust adds real range to my portfolio. As of October 2021, its top holdings included Alphabet, Goldman Sachs, and Apple. All three of these stocks have seen at least 20% growth in price this year, showing the potential of the trust’s portfolio.

What I also like about it is its investment style. Simply put, it buys for the long term. And for me, this is perfect. It means issues surrounding volatility that may be experienced in the short term are less relevant. The trust has prospered under the guidance of manager Paul Niven, who has been at the helm since 2014. The last five years have seen a return of 70%, showing the positive impact he has had.

On top of this, the trust, founded in 1868, is the oldest in the world and therefore has stood the test of time. Its bounce-back from the crash we saw in March last year is proof of this. This is a major factor when I think about adding it to my portfolio.

My concerns

With this said, I do have concerns about F&C. It third-largest asset allocation is emerging markets (9.2%). And as much as I see value here, the spread of the Omicron variant globally could have a negative impact on these markets. Cases have been confirmed in countries such as India and Brazil, both states that have struggled to contain Covid, even prior to the emergence of Omicron. However, as I mentioned above – these short-term periods of volatility should not pose a long-term threat. The trust has a proven track record over long periods, and I think its weighting in emerging markets will eventually bear fruit.

Why I’d buy

Although investor confidence may have taken a hit as we see Omicron impact our lives, F&C has proved it can weather storms such as these. The main attraction for me is the diversity it offers to my portfolio – and while past performance does not guarantee success in the future, for me it provides a good indication. Its record shows it has the potential to continue to flourish. As such, I would look to buy shares today and hold them for the long run.

G A Chester: Gamma Communications 

Gamma Communications (LSE: GAMA) is in the high-growth market of unified communications as a service (UCaaS) for businesses. Whether employees are in the office, at home, in a coffee shop etc, the company’s products enable them to communicate in multiple ways with colleagues and customers. Need I say more than ‘hybrid working’? 

Gamma is a UK leader but has also recently entered Europe where cloud-based UCaaS is at an earlier stage. There’s risk in this expansion abroad, but huge potential. Gamma’s shares may have overheated through the summer and I see a recent pullback as an opportunity for me to buy. 

G A Chester has no position in Gamma Communications.

Charlie Keough: F&C Investment Trust  

My best stock for October is F&C Investment Trust (LSE: FCIT). The FTSE 250 stock, with over £5bn in assets, has performed solidly year-to-date. 

The trust offers access to an array of sectors in numerous locations, all with cheap ongoing charges. I specifically like its relatively large weighting in emerging markets. Its long-term investment strategy is also an appealing factor. 

Launched in 1868, this trust has stood the test of time. Its 70% return (at the time of writing) over the past five years show that FCIT is a solid long-term investment to buy in October.  

Charlie Keough does not own shares of F&C Investment Trust. 

Rupert Hargreaves: Wickes Group

Wickes Group (LSE: WIX) is one of the primary beneficiaries of the home improvement trend that has evolved over the past 12 months. Over the 26 weeks to the 26th June, sales jumped 22.4% compared to 2019 levels. 

Management seems to think this trend will continue, and it is reinvesting windfall profits back into the enterprise to improve the customer experience and digital proposition.

As customer demand remains elevated, I would buy the shares for my portfolio.

However, challenges such as rising wages and materials shortages may prove to be a thorn in the company’s side as we advance.

Rupert Hargreaves does not own shares in Wickes.

Edward Sheldon: Gamma Communications

My best stock for October is Gamma Communications (LSE: GAMA), which specialises in remote work solutions. Its share price has fallen recently and I think this has created a nice entry point for long-term investors like myself.

Gamma’s recent first-half results were good. Revenue was up 23% year on year while adjusted earnings per share were up 30%. The dividend was increased 13%.  Looking ahead, Gamma said it was “optimistic” about future growth.

Gamma does have a higher valuation. So, this adds some risk. Overall, however, I think the long-term risk/reward proposition here is very attractive.  

Edward Sheldon owns shares in Gamma Communications

Roland Head: Synthomer

My pick for October is chemicals group Synthomer (LSE: SYNT). This FTSE 250 business produces a range of products, including medical latex gloves.

Demand has surged due to Covid-19 and Synthomer’s pre-tax profit rose by 40% to £160m last year. The company has reported further gains during the first half of 2021.

The risk is that when demand returns to normal, profits will collapse. But with the stock trading on just 10 times 2022 forward earnings, I think a cautious outlook is already priced in. I believe Synthomer could do well over the next few years.

Roland Head owns shares of Synthomer.

Zaven Boyrazian: Alpha FX

In today’s global economy, being able to manage foreign currency exchange risks has become paramount. That’s where Alpha FX (LSE:AFX) steps in.

The firm provides exchange risk-management services using a commission-based cost structure. This makes it far more accessible for smaller and medium-sized businesses compared to traditional corporate banking solutions. But beyond currencies, Alpha FX has launched a payment processing network for rapid international large-scale transactions.

In the last six months, revenue from its currency services grew by 48%. But its payments solution saw sales surge by 600%!

The company faces some fierce competition from corporate banks and rival financial service firms. However, Alpha FX continues to expand its market share nonetheless.

Zaven Boyrazian owns shares in Alpha FX.

Christopher Ruane:  Stagecoach

You wait ages for buses, then three come at once. Might this also describe bus company takeover bids?

News that rival National Express may bid for Stagecoach (LSE: SGC) could flush out other potential suitors for the Perth-based bus giant. Like we saw at Morrisons, it could be “all aboard” for a bidding war. In that case, I see short-term upside for Stagecoach shares – which is why I’ve made it my best stock to buy in October.

Even without a bid, I like Stagecoach for its large network, well-established brand and industry experience. One risk is takeover talks distracting management and slowing revenue recovery.

Christopher Ruane owns shares in Stagecoach.

Charles Archer: Centamin 

I think gold stocks like Centamin (LSE: CEY) are a good hedge against rising inflation. And while gold is down 13% over the past year, it’s still near record levels.  

The company is mining 400,000 ounces of gold in 2021. It has no debt, $312m in liquid assets, and pays a reliable 5% dividend. However, its share price is volatile. But at 92p today, analyst consensus is upbeat for the gold miner.  

There is a risk that the gold spot price will continue to fall. But I think Centamin is a safe long-term investment in this inflationary environment. 

Charles Archer does not own shares in Centamin.

Andy Ross: Vertu Motors 

Shares in car dealer Vertu Motors (LSE: VTU) have fallen from recent five year highs. This seems primarily due to the wider market weakening through much of September and potentially also some profit taking because the shares accelerated.   

The slight share price fall could be an opportunity though October and beyond. The shares are undoubtedly cheap on a P/E of six. That’s plus point number one.  

Number two is that car dealers are posting exceptional results at the moment across the board. This is due to the semiconductor shortage pushing up the prices of used cars. These conditions could well persist and boost Vertu’s profits.  

Andy Ross owns shares in Vertu Motors.  

Royston Wild: Prudential 

Okay, the Prudential (LSE: PRU) share price has bounced following the heavy falls it experienced towards the end of September. But the FTSE 100 stock still trades at a 7% discount to levels printed at the start of the month. This provides a chance for UK share investors to engage in some shrewd dip buying. 

Prudential’s share price slumped as fears over the Chinese economy blew up. The life insurance giant has famously made Asia the nucleus of its growth strategy. So naturally concerns over the region’s largest economy shook investor confidence in the company. 

As a long-term investor I wasn’t readying to sell my own Prudential holdings, however. I remain bullish over the FTSE 100 firm’s huge Asian bias, a plan that should allow it to exploit soaring wealth levels in those far-flung regions in the years ahead. I continue to think it’s one of the best stocks to own in October despite the threat posed by a Chinese slowdown in the more immediate future. 

Royston Wild owns shares in Prudential.

Paul Summers: Avon Protection

Supply chain issues, a tight labour market and product approval delays have collectively tanked the share price of respirator maker Avon Protection (LSE: AVON). While a full recovery will take time, I think the margin of safety is now sufficiently attractive for me to begin building a position.

With customers including the US Department of Defense, Avon is the global leader at what it does and, 2021 aside, has shown itself to be a quality business over the years. Given recent consolidation in the sector, I wouldn’t rule it out as a potential bid target. 

Paul Summers has no position in Avon Protection

Long-term outlook

The main reason I like this FTSE 250 stock is because of its investment strategy. It aims to secure long-term growth through its diversified portfolio, and for my investing style, this is perfect. This also nullifies issues with volatility, exemplified through its near 80% return over the last five years. Being the oldest investment trust in the world, it has survived multiple challenges – most recently the pandemic. A near 11% rise in the share price since the outbreak of the pandemic shows its strengths.

I also like the look of FCIT’s top holdings. As of June 2021, this included Amazon, Alphabet, and UnitedHealth. The diversification offsets risk while increasing exposure to different markets. A standout for me is its eighth-largest holding, Taiwan Semiconductor Manufacturing Company, which has risen nearly 40% over the past 12 months. Fund manager Paul Niven has been running the trust since 2014 and has been key in FCIT’s recent success. Since he took over the trust is up 125%, a clear indication of his management strength. This gives me real confidence in the future of the FTSE 250 stock.

FCIT risks

With this said, I do have a few issues with FCIT. Firstly, as of June 2021, its third-largest asset allocation was in emerging markets equity. Although emerging markets provide opportunities as they grow, they are often volatile. To add to this, Covid-19 cases in countries such as India and Brazil are still high, and if F&C has invested in affected countries this could have a negative impact. With a long-term outlook, however, I am not put off by this. I believe the prospects that emerging markets can offer outweigh the short-term threat of the pandemic. Instead, a dip in the market may offer greater opportunities. 

Another issue is its large exposure to the US, and more specifically, tech stocks. Although they have rallied over the past few years, with over half (56.2%) of its asset allocation in North American equity, along with its top five holdings being tech stocks, this makes it vulnerable should these stocks experience a dip. We recently witnessed this with the tech sell-off.

Why I’m buying

Although I have highlighted issues such as volatility, I think a long-term perspective quashes these. As many developed countries increase their control over the pandemic, I think the rest of 2021 could see a rise in the FCIT share price. I think the FTSE 250 stock is yet to reach its full potential. Currently trading at around 855p, I deem now a perfect time to buy this stock for my portfolio before potentially missing out.

Tesco share price reservations

Like many FTSE firms, the Tesco share price has not returned to pre-crash levels as I write. It’s trading ar 224p per share. Pre-crash it was 320p and this time last year it was 227p.

So what’s happened? In February, Tesco announced a special dividend and a share consolidation. It returned £5bn to investors but also completed a 15-for-19 share consolidation. This means shareholders of 100 existing shares, would now own 78 new ones. The aim was to balance out the effect of the special dividend so the share price remained the same without causing too much consternation.

Tesco confirmed its full-year results two days ago, a month after preliminary results were announced. Although group sales were up 7.1% on the  year, profits and cash generation were down 28.1% and 29.8% respectively. Net debt stood at £12bn. These results negatively affected the Tesco share price. It’s currently down over 2% this week.

I have reservations about Tesco. Cut-price competitors such as Aldi and Lidl are rapidly gaining market share, which has seen Tesco’s market share decreasing. It also has a large amount of debt. For now, although the Tesco share price is down and relatively cheap in my opinion, I prefer to look to other FTSE stocks for my portfolio.

FTSE 250 opportunity

I’m seriously considering adding F&C Investment Trust (LSE:FCIT) to my portfolio. Investment trusts provide exposure to a range of stocks under one umbrella. Such trusts are designed with a long-term perspective, which suits my style of investing. Unlike Tesco, the F&C share price has surpassed pre-crash levels. As I write this, I can buy shares in F&C for 830p per share, whereas prior to the crash, the shares were at 774p and a year ago they were 665p. 

But the price recovery isn’t the only reason I like F&C. I like that it’s run by fund manager Paul Niven. He’s been with the company for over 25 years and is well respected having overseen years of success. Plus F&C has a diverse portfolio globally. F&C is the oldest investment trust in the world and currently invests in over 400 companies in 35 countries. I’m a fan of tech stocks and some such F&C has in its portfolio are Amazon, Apple and Microsoft. Finally, it has an excellent record of growth and achievement. I know past performance doesn’t guarantee future success, but it’s a good indicator for me. F&C recently announced it would be increasing dividends for a 50th consecutive year too.

Risk and reward

Like Tesco, F&C has its own risks. It invests heavily in emerging markets. Such markets are often susceptible to volatility, which can stem from political upheaval or natural disaster. These events can affect economic growth. Currently, F&C has its third largest asset allocation in emerging markets. If cases of Covid-19 rise, especially in countries where F&C has invested, it could also have a negative effect.

Yet I would prefer to buy shares in F&C rather than invest my money in Tesco. F&C offers me greater protection through diversification. It also has a strong track record and history of success. I believe it can cope well with short-term volatility and flourish long term.

In this article, I am going explain why I have just added F&C Investment Trust (LSE: FCIT) and Scottish Mortgage Investment Trust (LSE: SMT) to my portfolio.

F&C Investment Trust

Being the oldest investment trust in the world, investing in over 400 companies in 35 countries, the objective of F&C Investment Trust is to secure long-term growth in capital and income through its internationally diversified portfolio. I see the trust ran by fund manager Paul Niven as a great way to add stability to my portfolio – especially since the announcement that the trust will be increasing its dividends for a 50th consecutive year.

Its top holdings offer exposure to a variety of sectors through companies including Microsoft, Amazon, and UnitedHealth, to name a few. The trust also puts emphasis on emerging markets, with the third largest asset allocation being emerging market equities (as of March 2021) – and this paid dividends as the March report highlighted the trust’s outperformance in a falling market. Although deemed a traditional investment trust, F&C Investment Trust is adapting, as seen by the recent announcement of plans to reach a carbon-neutral portfolio by 2050.

The lagging emerging market may provide a problem for the trust as it has a large weight in this sector. A recent surge in coronavirus cases, most notably in Brazil and India, may mean some of its top holdings could take a hit as these countries suffer.

With that said, the trust is set up for the long term – and as such is in a good position to cope effectively with the volatility that we may see in the short term.

Scottish Mortgage Investment Trust

With a market value of £18bn, the trust aims to invest in a high conviction, global portfolio of companies with the aim of long-term returns. With the current share price hovering around 1,220p, that is nowhere near the 52-week high of 1,418p of February last year.

The investment trust has a top 10 holding that invests heavily in tech companies. Its top three holdings are Tencent, Illumina and ASML, and its top 10 holdings make up 45.3% of its total portfolio (as of March 2021). This provides positive signs as, despite the recent dip, I still have a bullish outlook on the tech industry due to its continuous expansion and growth.

The investment trust recently also saw itself diversify into the world of cryptocurrency, which gives it an additional edge over many investment trusts.

With this said, I am obviously wary of buying due to the current dip in tech stocks. On top of this, the trust is trading at a high price, and as my fellow Fool Cliff D’Arcy wrote in April, I must question how much further it can rise.

Long-term vision

However, both trusts are designed for long-term investment – and as such, I do not see the short-term volatility they face posing a problem for long-term returns. The depressed prices of both trusts this month is why I am using now as a good time to buy.

My tip would be to start investing tax-free through a Stocks and Shares ISA allowance. While stock markets can be volatile in the short term, I’d tip equities to beat almost every other form of investment in the longer run, making them the ideal way to build retirement wealth.

Investment trusts are an underrated way to tap into this growth, as they regularly outperform rival fund types. These two global trusts could help you towards a target of doubling the income you get from the State Pension.

F&C Investment Trust

F&C Investment Trust (LSE: FCIT) invests in a spread of global stocks, giving you an instant, internationally-diversified portfolio of publicly-listed equities, unlisted stocks and private equity. Launched in 1868, this is the world’s first collective investment vehicle with a tremendous pedigree.

Despite its long history, the £4.5bn fund remains sprightly today, its share price rising a bumper 99% in the last five years, easily beating its benchmark FTSE All-World index.

It gives you exposure to a spread of globally-renowned stocks, including US tech giants Amazon, Microsoft, Google-owner Alphabet, Facebook and Apple, as well as Visa, MasterCard, BP, Unilever and AstraZeneca. In total, it holds 450 companies, giving you a cushion if some of them underperform.

F&C currently yields around 1.5% but has a proud record of increasing its dividend payout ahead of inflation, boosting its value in real terms.

I’ve been an investment journalist for around 25 years, and F&C has been there throughout, doing what it does best… making investors richer. I reckon it should continue to do that over the next 25 years, taking you into retirement and beyond.

JP Morgan Emerging Markets Investment Trust

You could supplement it with a fund that zones in on the faster growth opportunities available from emerging markets. JP Morgan Emerging Markets Investment Trust (LSE: JMG) has also thumped its benchmark index, its share price climbing 91% over the last five years. If you had invested £10,000 in this 10 years ago, you’d have £24,145 today.

The trust contains big-name emerging market companies such as Taiwan Semiconductor, Chinese giants Tencent and Alibaba, and Tata Consultancy Services, giving you exposure to companies you might probably never buy as individual stocks.

A third of the fund is invested in China, which makes recent performance even more impressive, given the trade war with the US. It also gives you exposure to India, Taiwan, South Africa, Brazil and other emerging stars. The current yield is 1.32% but, again, you can expect dividend payouts to steadily increase over the years.

Whatever your age, these two trusts could help you build a passive income in retirement to supplement the State Pension, which isn’t enough on its own.

Foreign & Colonial

The renowned F&C Investment Trust (LSE: FCIT) was launched way back in 1868, just over 150 years ago. It’s now worth £3.66bn and aims to deliver long-term capital and income growth by investing in an internationally diversified portfolio of equities, as well as unlisted securities and private equity.

Recent performance has been good – it’s grown 99% over the past five years, against 77% for its global benchmark index. It even grew 8.8% over the last 12 months, at a time when most indices actually fell. So it isn’t just living off its history and reputation.

Tech heavy

However, one reason for this success is its outsize exposure to the US stock market, which has beaten most others in recent years. Some 50% of the fund is invested in the States, so maybe skip this if you already have enough US exposure. Top 1o holdings include US tech giants Amazon, Microsoft, Google owner Alphabet and Facebook, so you can probably guess where recent strong growth has been coming from.

Growth is nonetheless impressive, and F&C also gives you exposure to Europe, emerging markets, Japan and the UK. The trust trades at an average discount of 6.8% to its net asset value, but that has currently narrowed to 1.47%, suggesting it is in demand right now. An ongoing charges figure of 0.79% isn’t too expensive.

Your decision partly depends on where you want to put your money. The UK is relatively undervalued, for example. But F&C Investment Trust could be a good one-stop fund, if you’re happy to go large on the US.

Buy British

While F&C was the original investment trust, plenty more were launched at the tail end of the 19th century, including the British Empire Trust (LSE: BTEM). It was incorporated in London in 1889 as The Transvaal Mortgage, Loan and Finance Company Limited, with the aim of investing in the hot emerging market opportunity of the period – the Transvaal colony of southern Africa, a region rich in minerals and resources.

It’s now a globally diversified investment trust with nearly £1bn in assets and now follows what investment manager Joe Bauernfreund calls a “unique strategy of investing in asset-backed companies, including holding companies, closed-ended funds, property companies and, as of June 2017, cash-rich Japanese companies.” So its top holding is Japan Special Situations, which makes up 15% of the entire fund.

Global power

British Empire Trust is also in the global investment trust sector, but is less top-heavy with US stocks. In fact, its largest exposure is to Europe, at 26%, followed by North America, at 24%, then Asia-Pacific and Japanese equities, both 18%. The UK is a measly 1% which could give you much-needed diversification from these shores. It also means that these two funds could balance each other quite nicely. Otherwise, here are two more esoteric global investment trusts to consider.

Investment trusts

For those on the hunt for reliable income, it may be worth considering investment trusts as a way to get exposure to the stock market. An advantage that investment trusts hold over open-ended funds, such as unit trusts, is their ability to hold back some of the dividend income they earn each year. This enables them to draw down on their reserves to smooth out income payments during more difficult periods.

The Foreign & Colonial Investment Trust (LSE: FRCL) is one such investment trust which has paid a dividend every year since its inception 150 years ago. What’s more, it has also been growing its dividend for 47 consecutive years.

Broad exposure to global markets

The F&C fund is well-balanced and geographically diversified with broad exposure in international markets and across various industries. This one-stop shop approach makes it a potentially attractive core holding for a starter portfolio, or for those investors seeking to increase their portfolio diversification.

With Brexit uncertainty continuing to overhang on UK economic growth, the fund has continued to cut its exposure to domestic stocks. Its portfolio of UK stocks account for less than 5% of its total assets, down from the 29% in 2013.

North America is its biggest geographical exposure, with 34% invested there. This is followed by Europe (excluding theUK) at 13%, emerging markets (11%) and Japan (9%). It has a further 23% invested in its multi-manager Global Strategies portfolio and 6% in private equity funds.

Shares in the investment trust have a current dividend yield of 1.5%.

Direct property and equity

Meanwhile, the Value and Income Trust (LSE: VIN) has a more unique offering, investing both in UK equities and direct property. By combining investments in these two areas, the fund aims for long-term real growth in dividends and capital value without taking on too much undue risks.

Property investments account for a growing proportion of its assets and currently represents a little more than a third of its portfolio value. The trust focuses on higher yielding, less fashionable areas of the UK commercial property market.

It has a preference towards assets with long, stable income streams, particularly those benefiting index-linked rent reviews. Such index-linked leases account for 62% of the portfolio’s rental income, affording it substantial protection against inflation. And to further underscore its risk-averse culture, the property portfolio has a long average unexpired lease length of 14 years, with investments being funded for many years by long-term fixed rate loans.

High yield

In the equity space, it’s invested in a diversified portfolio of primarily high-yield stocks, which includes many medium- and smaller-sized companies. Its largest equity holdings include Beazley, Unilever, Halma, BP and Legal & General.

Trading at an 18% discount to its net asset value (NAV), shares in the Value and Income Trust are attractively priced. Dividends per share for the trust grew by 3.6% to 11.4p this year — marking its 31^st consecutive year of dividend growth, and giving shares in the trust a yield of 4.2%.