- US President Donald Trump has brought two tech titans with him on his state visit.
- $10bn worth of trade deals are expected to be secured this week between the UK and US.
- 3 investment trusts that could be at the forefront of innovation and tech trends.
Kate Marshall, lead investment analyst, Hargreaves Lansdown:
“US President Donald Trump touches down in the UK today bringing with him two tech titans in the form of Nvidia’s Jensen Huang and OpenAI’s Sam Altman. Reports state that near $10 billion worth of trade deals are to be secured this week between the UK and US, centred on tech and innovation.
From the rise of artificial intelligence (AI) and automation to breakthroughs in clean energy and digital infrastructure, the investment landscape and global economy could be reshaped by both huge investments, not only in the UK, as well as these long-term themes.
For investors looking to tap into the potential of tomorrow’s world, identifying the winners early is key. But backing innovative, disruptive companies isn’t always straightforward. That’s where investment trusts can come into their own. Run by experienced managers, some investment trusts offer a way to access next-generation growth themes.
Here we look at three investment trusts that could be at the forefront of some of these trends. Each takes a different approach, but they all invest in innovators and enablers that could shape our future.
3 next generation investment trusts
Polar Capital Technology Trust
The Polar Capital Technology Trust aims to grow investors’ money over time by investing in next generation technology leaders, which the trust’s managers believe have great long-term growth potential. They invest in technology companies around the world.
The managers aim to invest in companies that are financially strong and run by experienced management teams, rather than early-stage or blue-sky companies, though they invest in some small and medium-sized companies too. Each company must have the potential to benefit from a technology trend or growth theme.
All companies are subjected to an ‘AI lens’. The managers believe that AI is the next general-purpose technology, meaning it’ll change the way companies work and everything else will revolve around it. AI is a broad category and includes companies that enable AI technology (such as those making semiconductor chips or providing cloud computing services), AI beneficiaries (mainly technology companies) and AI adopters.
Greencoat UK Wind
The UK aims for a 95% clean electricity grid by 2030, with major expansions in offshore and onshore wind. It has pockets of land that are ideally suited to generating renewable energy, and removing complex planning rules could boost UK renewables and infrastructure. The goal is also to enhance energy security by reducing reliance on volatile fossil fuel markets and creating a more affordable and sustainable energy system for the nation.
Greencoat UK Wind invests solely in operating onshore and offshore UK wind farms that are currently producing income. It aims to pay investors a resilient annual dividend that increases in line with inflation, while preserving the value of an investment. This means the majority of any returns will come in the form of income rather than capital growth. At the time of writing, the trust offers an attractive yield of 9.58%.
Scottish Mortgage Investment Trust
Scottish Mortgage Investment Trust aims for long-term growth by investing in some of the stock market’s most exciting companies. It provides exposure to some of the most disruptive businesses around the world, which means the trust currently invests in areas from AI to space exploration, and healthcare to transportation.
The trust’s managers aim to provide long-term funding and support for the companies and entrepreneurs building the future of our economy. This patient approach is well suited to investing in private companies.
The trust can invest up to 30% of its assets in these unquoted companies (measured at the time of investment). Investors should be aware that investment in unquoted companies is higher risk, and they can be considerably less liquid than those traded on established stock exchanges. A long-term outlook is essential.”
