Could this investment trust help you retire early?

This investment trust with “unusual” assets could offer attractive long-term returns.

| 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.

In today’s world of ETFs, OEIC’s, ETPs, hedge funds, unit trusts unit-linked life and pension funds, one of the world’s oldest investment vehicles, the investment trust, is slipping away into obscurity.

Unlike almost all of the other fund groups, investment trusts are closed-ended vehicles with a structure similar to that of a company. The great thing about this structure is that investment trusts tend to have a longer lifespan and more secure dividend payouts than other fund types. Trusts such as City of London, Bankers Investment Trust, and Alliance Trust have all racked up 50 years of consecutive dividend increases for income investors.

The Hansa Trust (LSE: HAN) has been around since 1950 and over this time management has grown its net asset value from around £10m to £315m.

Should you invest £1,000 in Alliance Pharma Plc right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Alliance Pharma Plc made the list?

See the 6 stocks

Unusual portfolio

Hansa offers investors exposure to an interesting selection of assets. Management describes the portfolio as a “long-term, non-index correlated portfolio of unusual investments, which would not normally be available for investment to individual investors.” This may sound like a high-risk collection of investment stakes, but it could actually be a prudent investment when combined alongside an already well-diversified portfolio.

Indeed, the great thing about Hansa’s “unusual” portfolio is that it provides insulation from wider market moves. Over the past 17 years, the trust has produced a capital return of 75% compared to the FTSE 100 return of 31%. Both of these figures exclude dividends.

However, those numbers severely understate the trust’s potential as shares in Hansa currently trade at a large discount to net asset value. According to a press release from the company today, on June 26 Hansa’s ex-income net asset value per ordinary share was 1,310.9p, around 46% above the current share price of 901p.

An attractive discount? 

The question is, why is this discount so large? The answer, it appears, lies in the trust’s portfolio. Around one-third of assets are invested in Ocean Wilsons Holdings Limited, another investment company that is engaged, through its subsidiaries, in the provision of maritime and logistics services in Brazil. Thanks to problems in this developing nation, shares in Ocean Wilsons have struggled in recent years, falling 4.1% over the past five years. 

Nonetheless, over the long term this company has produced huge returns for shareholders. Since 2004 the shares have returned 553% excluding dividends, outperforming the FTSE 100 by 484%.  

High risk

Alongside Ocean Wilsons, the rest of Hansa’s portfolio is filled with investment funds, which provide the offered “unusual” exposure but may be too high risk for some investors.

That said, as an alternative to traditional investments, Hansa should be considered for a place in your portfolio. If Brazil’s economy begins to recover, Ocean Wilsons will benefit and this should lift Hansa’s overall net asset value as well as stock price. What’s more, the broad collection of highly diversified funds under the investment trust’s umbrella could offer protection in a volatile market environment, helping you to improve your long-term returns and achieve your financial goals. 

The trust currently yields 1.78% and the total expense ratio is 0.94% per annum.

But this isn’t the only opportunity that’s caught my attention this week. Here are:

5 Shares for the Future of Energy

Investors who don’t own energy shares need to see this now.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — sees 2 key reasons why energy is set to soar.

While sanctions slam Russian supplies, nations are also racing to achieve net zero emissions, he says. Mark believes 5 companies in particular are poised for spectacular profits.

Open this new report5 Shares for the Future of Energy — and discover:

  • Britain’s Energy Fort Knox, now controlling 30% of UK energy storage
  • How to potentially get paid by the weather
  • Electric Vehicles’ secret backdoor opportunity
  • One dead simple stock for the new nuclear boom

Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!

Grab your FREE Energy recommendation now

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 has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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

Queen Street, one of Cardiff's main shopping streets, busy with Saturday shoppers.
Investing Articles

Here’s why the Next share price is rising again today

The Next share price keeps climbing, but should investors like me consider buying? Roland Head looks at today’s news and…

Read more »

Businessman using pen drawing line for increasing arrow from 2024 to 2025
Investing Articles

Up 850% in 3 years and the Rolls-Royce share price still won’t stop! See what the forecasts say now

Harvey Jones says Rolls-Royce shares continue to defy gravity. Yet this leaves investors facing a tricky decision over whether to…

Read more »

Artillery rocket system aimed to the sky and soldiers at sunset.
Investing Articles

Down 23% but with forecast annual earnings growth of 30%+ and new contracts just signed, should investors consider buying this FTSE 250 defence gem?

This FTSE 250 defence firm just signed two major new contracts, has excellent earnings growth prospects, and looks like a…

Read more »

Businessman with tablet, waiting at the train station platform
Investing Articles

Netflix looks ‘recession-resistant’, but is the growth stock worth considering after a 30% gain in 2025?

Netflix shares have soared in 2025, delivering a gain of around 30%. Is it too late to buy the growth…

Read more »

Middle aged businesswoman using laptop while working from home
Investing Articles

Shell shares go ex-dividend on 15 May. Should investors consider grabbing its 4.5% yield now?

Shell shares have struggled lately but may still appeal to income-focused investors who take a long-term view. There's also a…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

£11,000 invested in Lloyds shares a year ago is now worth…

Lloyds shares have significantly outperformed their FTSE 100 host index over the past year in price and yield gains. But…

Read more »

Array of piggy banks in saturated colours on high colour contrast background
Dividend Shares

A 9.16% yield! Here’s the eye-catching dividend forecast for this hotshot

Jon Smith eyes up a juicy dividend forecast for a renewable energy stock that has a dividend policy aiming to…

Read more »

Rear view image depicting a senior man in his 70s sitting on a bench leading down to the iconic Seven Sisters cliffs on the coastline of East Sussex, UK. The man is wearing casual clothing - blue denim jeans, a red checked shirt, navy blue gilet. The man is having a rest from hiking and his hiking pole is leaning up against the bench.
Investing Articles

Up 30% in 2025, can the Prudential share price keep climbing?

After a few years in the doldrums, Andrew Mackie explains why he believes momentum could push the Prudential share price…

Read more »