The deadline to shelter up to £20k in a Stocks and Shares ISA is fast approaching. For long-term investors, I think these two very different investment trusts are worth a look for anyone aiming to invest some ISA money soon.
Value and dividends
First up is BlackRock World Mining Trust (LSE: BRWM), which pretty much does what it says on the tin (pun intended).
Mind you, tin doesn’t make up too much of the global mining trust’s portfolio. Today, it has a large weighting to copper, iron ore and steel, which should all experience steady long-term demand due to global trends like decarbonisation, electrification, and infrastructure modernisation.
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The FTSE 250 trust also has a 27% allocation to gold, the price of which has surged to record highs amid rising geopolitical tensions and a weakening US dollar. So there is good diversification, especially through top multinational holdings like BHP, Rio Tinto, and Glencore.
The risk here is that mining is cyclical and commodity markets can be volatile. The trust’s value can fall quickly if the global economy tanks.
Despite this, I think now is a good time to consider picking up some shares. Down 22% in two years, they’re offering a 4.6% dividend yield and are trading at a near-10% discount to net asset value (NAV).
Longer term, we expect mined commodity demand growth to be driven by increased global infrastructure build out, particularly related to the low carbon transition and increased power demand.
BlackRock World Mining Trust.
High growth
Next up is Baillie Gifford US Growth Trust (LSE: USA). Again, no prizes for guessing what this one focuses on.
The reason I like this one is because it offers investors exposure to some very exciting growth companies not listed on the stock market. Chief among these are internet payments giant Stripe (recently valued at $91.5bn) and rocket pioneer SpaceX (the world’s most valuable private firm at $350bn).
Many other holdings dominate their respective industries, including Amazon (e-commerce and cloud computing), Meta Platforms (Facebook, Instagram, and WhatsApp), Duolingo (language learning), Netflix (streaming), and Nvidia (AI chips).
Recent performance has been impressive. In the six months to 30 November, the trust’s NAV and share price returns were 29.4% and 40.9%, respectively. This significantly outperformed the S&P 500‘s 15.3% return (in sterling terms).
One risk to be aware of here is that the portfolio has significant AI exposure. If AI spending slows, the technology doesn’t fulfil its exciting potential fast enough, or individual companies struggle, the trust’s value could suffer.
Longer term though, I expect it to do very well as the world becomes more digital and AI likely permeates every sector. It also has holdings in potentially revolutionary smaller companies like PsiQuantum (quantum computing) and Runway AI, a generative AI video platform for creative artists.
Some of these smaller growth companies could drive fantastic returns. As the trust points out, only 10 years ago, Tesla and Nvidia were mid-cap companies with market caps in the $10bn-$30bn range. Look at them now!
Finally, the discount to NAV here is 12%, which means the shares might prove to be a bargain at 237p. I think they’re well worth considering for long-term growth investors with a stomach for volatility.
