The last time I covered EP Global Opportunities Trust (LSE: EPG), I concluded that the investment trust, with its global investment mandate and record of achieving double-digit annual returns for investors, would make an excellent investment for any portfolio. And even though shares in the trust have dropped by around 10% since then, I stand by this opinion.
It seems to me as if EP Global’s stock has come under pressure thanks to the market turbulence around the world. Net asset value at the end of last week was 324p per share, down from the 345p per share in mid-January, but the stock is still trading a discount of 8.3% to this underlying value.
Global investment exposure
As mentioned above, EP has a global investment mandate, something its managers are currently making the most of. The most substantial holding in the portfolio as a percentage of net assets is pharmaceutical group Roche, closely followed by AstraZeneca. Together, these two companies account for 6.6% of net assets.
Other top holdings also include Chinese consumer goods group Goodbaby International and Japanse financial conglomerate Sumitomo Mitsui Trust. BP is the fifth largest holding at 2.8% of net assets.
So, if you are looking for a globally diversified investment trust that has a record of producing market-beating returns for investors, and has exposure to the fast-growing healthcare market, EP Global could be an excellent buy for your portfolio. The management fee is 1% per annum, and the trust supports a yield of 1.3%.
High risk, high reward
If you’re looking for a more specialist fund, Draper Esprit (LSE: GROW) should not be overlooked. This company is a leading venture capital business, which invests in high growth digital technology startups.
The company has a track record of achieving 20% per annum returns on its investment portfolio, and management is committed to maintaining this record. According to a trading update issued by the group today, the fair value of the portfolio grew by 66% for the year to the end of March 2018, a staggering return on investment. For the period, the company realised £15m of investments via successful exits and redeployed £75m back into the portfolio.
However, while the returns on offer from Draper might look attractive, I should point out that private equity investing in early-stage tech companies is a risky business, and there’s no guarantee that the firm will continue to generate the 20% per annum returns that it has done in the past.
That being said, management has already more than proven itself and is committed to investing with a long-term horizon, rather than seeking short-term gains.
With this being the case, I believe Draper could be a great addition to your portfolio to add a layer of diversification. Many studies have shown that small companies generate the best returns, but investing in the space can be complicated and risky for the average investor. So it might be best to let Draper do the hard work for you, sit back and relax.
