Why you should stop worrying about the State Pension and consider these two investment trusts instead
The Motley Fool
Published Jan 01, 0001 00:00
Updated Oct 13, 2018 10:46
We all know the State Pension isn’t there to give us a life of luxury. It’s designed to pay the basic minimum income, which is currently £164.35 per week, or £23.47 per day. You need to treat it as a basic platform on which you can build a retirement pot of your own.
Tech tips If you’re looking for some funds to put in that pot, I’ve got a couple of tips for you. They’re quite specialist, but they might fit nicely around a broad-based fund, such as a FTSE All-Share tracker, or maybe one of these two global investment trusts that are absolutely smashing the FTSE 100.
Both are in the technology sector, which has been on a storming run lately although there’s no guarantee that will continue, especially with markets falling around our ears as I write this. My first suggestion, Allianz (DE:ALVG) Technology Trust (LSE: ATT) , is loaded up with those big tech names we know and love, with US giants Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) prominent in its top 10 holdings.
Trumped The £448m fund, which launched in 1995, is 88% invested in North American equities, with only a smattering of European and UK exposure. The US has been on a blistering run, but many fear it could be overvalued, with President Trump and Federal Reserve chairman Jay Powell tussling over the pace of interest rate rises.
Allianz Technology Trust is up a whopping 158% over five years, and investors are taking notice, making it the second most popular investment trust in the UK, after Scottish Mortgage, according to Interactive Investor sales figures. As a result, it’s trading at a 0.7% premium to the value of its underlying assets.
Polar climate My other technology tip, Polar Capital Technology (LSE: PCT), has also enjoyed a rampant few years, rising 155% in that time, but it trades at a 2.3% discount. Again, it’s ridden the US tech stock boom, with a 72% stake in the market there, but wider exposure to Asia and Japan than Allianz.
Its top 10 holdings are also familiar… the fab four I mentioned above, plus Facebook (NASDAQ:FB), Chinese tech monsters Tencent Holdings and Alibaba (NYSE:BABA) Group, Samsung Electronics (KS:005930) and the Taiwan Semiconductor Company.
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This £1.5bn investment trust launched in 1996 is also much in demand right now, the 10th most popular trust in the UK.
Opportunity or threat? Whether to buy technology is a tough call right now. First, you need to see how it would slot alongside your existing holdings. If you already have plentiful exposure to large US tech stocks, you probably don’t want to load up on more right now. Also, there’s the small matter of the market meltdown.
You will either see this as a threat, or an opportunity. Allianz Technology Trust is down 15% in the last week and Polar Capital is down 12%. We like the odd market crash at The Fool because it gives you the chance to load up on top funds like these at a discount. The risk is that the market crash continues, but that’s always the risk at times like these.
John Mackey, CEO of Whole Foods Market (NASDAQ:WFM), an Amazon subsidiary, is a member of The Motley Fool's board of directors. Teresa Kersten is an employee of LinkedIn (NYSE:LNKD) and is a member of The Motley Fool's board of directors. LinkedIn is owned by Microsoft. us better investors.
Written By: The Motley Fool
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