No savings at 50? I’d buy these 2 investment trusts to retire wealthy

These trusts can help you grow and protect your pension savings.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

If you have reached 50 years of age, and have no savings for the future, don’t panic. There’s still plenty of time to build a sizable nest egg to retire on.

Investment trusts are a great tool to use to help you accumulate wealth quickly. Experienced managers usually run these trusts, and they have more flexibility than traditional open-ended funds. 

Scottish Mortgage Investment

The Scottish Mortgage Investment Trust (LSE: SMT) is a great example. This company, which has been managed by James Anderson since 2000, invests in high-growth businesses around the world. 

Its global mandate means Scottish Mortgage can invest in regions most individual investors would struggle to get exposure to. Around 20% of the trust’s assets under management are invested in Chinese equities, for example. 

Anderson also employees a high conviction portfolio approach. In other words, he’s happy to devote as much as 10% of the trust’s assets to one particular investment. The largest holding is currently Amazon.com. This accounts for 8.8% of assets under management. 

While most investment managers would try and stay away from using this much concentration in a portfolio, over the past two decades, Anderson has proven that he knows how to manage his holdings. Scottish Mortgage has produced a cumulative return for investors of more than 156% over the past five years, outperforming its benchmark by 66% since 2015.

The trust is currently dealing at its net asset value and charges a total operating cost of 0.4% per annum. The dividend yield stands at 0.5%.

RIT Capital Partners

Another trust that you can trust to manage your wealth is RIT Capital Partners (LSE: RCP).

RIT is committed to growing its investors’ wealth over the long term. Founded by the Rothschild banking dynasty, the founding family still owns a majority shareholding. Its investment managers also own a stake in the enterprise. 

The fact that the trust’s managers are happy to invest alongside regular shareholders implies that they will work tirelessly to produce the best results for all stakeholders over the long term. Certainly, since its inception, the trust has not disappointed. 

Founded in 1998, £10,000 invested in RIT at inception would be worth around £326,000 today, including dividends. 

RIT has achieved this performance by investing in a range of assets. The trust owns real estate, private equity investments, public securities and investments in hedge funds. This collection of assets has helped the firm weather market downturns and profit from upswings. 

Considering this performance, and the fact that management is a significant stakeholder, it is unlikely the trust will change its strategy anytime soon. That implies that these market-beating returns could continue for the foreseeable future. 

Unfortunately, the one downside of this trust is its cost. The overall cost is around 4% per year, but considering RIT’s total returns, it seems this is a price worth paying.

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.

Rupert Hargreaves owns no share mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK owns shares of and has recommended Amazon. 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.

More on Investing Articles

Investing Articles

Up 105% in a year! Is this rocketing FTSE bank the perfect pick for my Stocks and Shares ISA?

Harvey Jones is drawing up a shortlist of stocks to purchase inside his Stocks and Shares ISA allowance. This FTSE…

Read more »

Investing Articles

Is it madness to buy Palantir shares after Q3 earnings?

Palantir stock's surging again after the firm's Q3 earnings report. But after a 150% gain, is it too late to…

Read more »

A pastel colored growing graph with rising rocket.
Investing Articles

£6,000 in savings? Here’s how I’d aim to turn that into £1,032 a month of passive income!

A small investment in high-dividend-paying stocks with the returns used to buy more shares can generate big passive income over…

Read more »

Chalkboard representation of risk versus reward on a pair of scales
Investing Articles

As Lloyds’ share price tumbles 14%, is this an unmissable opportunity for me to buy at a bargain-basement price?

The Lloyds share price is substantially below its year high, but decent earnings prospects should drive its price and dividend…

Read more »

The flag of the United States of America flying in front of the Capitol building
Investing Articles

2 UK shares that could rise if Trump wins the Presidential election

These UK shares are among the FTSE 100's most popular stocks. And they could rise in value if Donald Trump…

Read more »

Closeup ruffled American flag representing US stocks and shares
Investing Articles

2 UK stocks that could rise if Harris wins the Presidential election

Royston Wild believes these UK stocks could receive a bump if Kalama Harris wins the Presidency, giving their share prices…

Read more »

Investing Articles

After a 96% plunge, is buying more Aston Martin shares throwing good money after bad?

Just two weeks after buying Aston Martin shares Harvey Jones found himself nursing a painful loss. Yet after recent news…

Read more »

Investing Articles

After crashing 45% in October, should I buy this FTSE 250 share for my Stocks and Shares ISA?

Roland Head explains why he’s tempted to add this risky FTSE 250 turnaround share to his Stocks and Shares ISA…

Read more »